600 billion! Three generations of grandchildren have spent time surviving a super IPO

The largest luxury car IPO in history is coming, with a valuation of 600 billion.

Source | Investor (ID:touzijias)

Author | Liu Ran

After Ferrari, Aston Martin and Volvo, Porsche is also about to IPO.

Investors.

At a recent mass group media briefing, Arno Antlitz, chief financial officer of Chase Group, revealed that according to the overall plan, Porsche's listing is expected to be completed in the fourth quarter of this year.

According to people familiar with the matter, Porsche's IPO valuation is expected to reach 90 billion euros (equivalent to more than 600 billion yuan), with a market value close to BYD, and is expected to become the largest IPO in Europe this year.

01

As one of the world's leading veteran car companies, the German Volkswagen Group owns a number of car brands, such as Porsche, Lamborghini, Audi, Bugatti, Bentley, Skoda, SEAT and so on.

In this large list of shining lights, Porsche is undoubtedly the most dazzling one. Founded in 1931, Porsche is a world-renowned luxury car brand with a number of models such as the 911, Panamera, Cayenne (Cayenne), Macan and so on.

Among traditional car manufacturers, Porsche is almost the only brand that can keep its profit margin above 15%. It is a rare "high-quality asset" among many subsidiaries of the Volkswagen Group and has always been regarded as the "treasure" of the Volkswagen Group.

It has been reported that the Volkswagen Group sells about 9 million cars a year, with Porsche delivering about 1/30 (about 300,000 units) and profits accounting for 1/4 of the group as a whole. The significance of Porsche to the Volkswagen Group is self-evident.

On March 18 this year, at the 2022 annual press conference, Porsche announced its 2021 performance, exceeding expectations.

According to the data, Porsche's operating income in the 2021 fiscal year was 33.1 billion euros, an increase of 15% over the 2020 fiscal year, and the sales profit increased by 1.1 billion euros from the previous fiscal year to 5.3 billion euros, an increase of 27%.

The net cash flow of Porsche's automotive segment in 2021 increased by 67% year-on-year to EUR 3.7 billion, while the net liquidity of the automotive business grew to EUR 5 billion, an increase of EUR 2 billion over the previous fiscal year.

In terms of deliveries, porsche delivered 301915 new cars to customers worldwide in 2021, and the number of new car deliveries exceeded the mark of 300,000 units for the first time, setting a record high.

Among them, the Chinese market is occupying an increasingly important position, with sales reaching 95,671 vehicles, an increase of 8% year-on-year, and is the single market with the highest sales volume.

Porsche also performed well in other major markets around the world: 84,657 units in the Americas, 131098 units in Asia Pacific, Africa and the Middle East, 86,160 units in Europe and 28,565 units in Germany.

According to public information, from 2019 to 2021, Porsche's operating income was 26.1 billion euros, 28.7 billion euros and 33.1 billion euros, and sales profits were 3.7 billion euros, 4.2 billion euros and 5.3 billion euros, showing a stable growth trend.

In terms of the most profitable return on sales, Porsche's return on sales in 2021 reached 16.0%, surpassing the 15.4% and 14.6% in 2019 and 2020.

Overall, in 2021, Porsche has created record highs in operating income and sales profit. The return on sales was essentially unchanged from the all-time high of 16.6% in 2018.

Right now, Porsche is ambitious about the electrification transition. Some insiders said that in order to achieve digitalization and electrification transformation, Volkswagen Group raised funds through porsche listing to provide financial guarantee for electrification development.

According to public information, the Volkswagen Group plans to invest 35 billion euros in electrification and 27 billion euros in digitalization by 2025. In the face of high investment costs, listing financing may be a good option.

02

Behind the Porsche sprint IPO is the result of the painstaking efforts of three generations of grandchildren.

Porsche founder Ferdinand Porsche is recognized as a genius in the global automotive market, but Ferdinand did not have a high starting point in life, he was born in Austria in 1875 into a blacksmith family.

As a descendant of the blacksmith family, Ferdinand should have learned the blacksmith craft in preparation for inheriting the family business in the future. However, Ferdinand developed a keen interest in mechanics and was passionate about emerging electricity, preferring to experiment with hands-on.

In order to further enrich his knowledge, Ferdinand went to his father's shop during the day to help and learn crafts, and at night to the local technical school to learn knowledge.

In 1893, at the age of 18, Ferdinand came to Vienna alone to work for The Bela Egger, where he maintained his habit of teaching himself while doing odd jobs.

Here, Ferdinand successfully developed a wheel hub motor to drive the car, the principle is to install the motor in the car wheels to directly drive the car forward.

It is worth mentioning that this is the world's first hybrid + four-wheel drive system car. The technology was patented in 1896, when Ferdinand was only 21 years old.

In 1900, Ferdinand's first electric car "Lohner-Porsche" was officially unveiled at the Paris Exposition, and set an Austrian automobile speed record with a speed of 35 miles per hour (56 kilometers), which instantly attracted the attention of the world.

In those days, the best way to test the performance of a car was to compete. "Lohner-Porsche" became famous in world war I, and Ferdinand became the "father of electric vehicles".

The famous Ferdinand took over the olive branch thrown by Mercedes-Benz and became one of the most important employees of Mercedes-Benz, serving in many important positions such as technical guidance and board members.

In Mercedes-Benz, Ferdinand, who has several positions, began to show his skills, and successively developed a series of explosive racing cars such as Mercedes-Benz S, SS and SSK, which swept the global car industry and won countless championships, becoming a milestone event in the history of Mercedes-Benz development.

Later, due to the disagreement with the business philosophy of Mercedes-Benz, Ferdinand turned and left. In 1931, Ferdinand and his son Ferry Porsche co-founded their own design studio, the predecessor of the Porsche car.

As the saying goes, "Fight the tiger brothers, fight the father and son soldiers". As soon as the studio was founded, it received an order from Volkswagen, and the father and son worked together to develop the classic model "Beetle" in the history of Volkswagen's development.

In 1948, the 356 model designed by Ferry was born and officially named after Porsche. In 1950, the Porsche 356 went into mass production, thus establishing itself as the "king of sports cars" in the global automotive market.

In 1951, Ferdinand died of a stroke at the age of 77, and the first generation of masters in automobile history came to an end. His son, Ferry, succeeded him and was responsible for the design and management of Porsche. Porsche later launched the 911 convertible, which became one of the global supercar benchmarks.

In the nearly 100 years since its establishment, Porsche has experienced countless baptisms of wind and rain, and even infighting over family power. Today, everything has calmed down, and Porsche has entered the hands of the third generation of the family and has always occupied an important place in the global luxury car market.

03

After the launch of classic models such as the 911, Panamera, Cayenne and Macan, Porsche has turned around and refocused on electric vehicles.

In 2015, Porsche announced that it would spend 1 billion euros to develop a pure electric sports car, intending to challenge Tesla's supremacy in the electric sports car market and hope to get a piece of the electric sports car market.

In 2019, Porsche presented the world debut of its first all-electric sports car, the new Taycan, with a conference spanning three continents, marking Porsche's entry into the era of electrification.

At present, Porsche is accelerating the transformation of electrification. The data shows that about one in every four new cars delivered by Porsche worldwide in 2021 will be pure electric or hybrid models.

Porsche also announced a new goal for electrification by 2030: by 2025, the 718 series is scheduled to be fully electrified, and half of the new cars delivered worldwide are expected to be electrified, including pure electric and hybrid models; by 2030, the company plans to account for 80% of electric vehicle sales.

However, Lutz Meshke, vice chairman of Porsche's global executive board, pointed out that due to the cost of high-performance batteries, the profit margin of pure electric models and internal combustion engine models is not so high, so pure electric models are calculated at a lower margin than that of internal combustion engine models.

The profit margins of its pure electric sports car, the Taycan, would theoretically be significantly lower than that of its fuel 911 series. In 2021, Taycan sales reached 41,296 units, doubling from 2020. Although this can be seen as a certain degree of success in Porsche's electrification transformation, it has not gained the company's profit margin.

The good news is that compared with luxury car brands with expensive labor and expensive materials, Porsche's assembly line production has a lower cost; compared with ordinary luxury brands, Porsche's premium part has a steady stream of high-net-worth people willing to pay.

Oliver Blume, chairman of Porsche's global executive board, said at the press conference that despite the rise in raw material prices, "every model Porsche sells must be profitable", and its pure electric sports car, the Taycan, is also profitable.

In fact, electrification has become a new trend in the current global automotive market, and Chinese car companies are also actively accumulating strength. In the field of traditional fuel vehicles, China is catching up, while in the field of electric vehicles, China is looking for opportunities to overtake in curves.

At present, many car companies in China are developing electric vehicles, in addition to geely, BYD and other traditional car companies, there are a large number of new car-making forces represented by "Wei Xiaoli" are accumulating.

When "Wei Xiaoli" has successfully landed on the capital market, other new car-making forces are also eager to try, and scramble to put it into practice, as if setting off a round of electric vehicle companies listing tide.

Recently, ZeroCar officially submitted an IPO application to the Hong Kong Stock Exchange, with CICC, Citibank, JPMorgan Chase and CCB International as co-sponsors. If the zero-run car is successfully listed, it will become the fourth new car-making force in China to go public in Hong Kong.

Nezha Automobile also reported an IPO. According to the latest news, Nezha Automobile has now started a Pre-IPO round with a target valuation of about 45 billion yuan, or US$7 billion, and plans to launch an IPO in Hong Kong within this year.

Similar to zero-run cars and Nezha motors, WM Motors and Gaohe Automobile, members of the new car-making forces with sales in the second echelon, have also been announced to be listed in Hong Kong, China.

China's new car-making forces have poured into the capital market, which is a feast for the global auto market. It also shows from the side that Chinese car companies that are lagging behind in the field of traditional fuel vehicles have finally stood at the forefront in the era of electrification.

If we say that in the era of traditional fuel vehicles, china's failure to give birth to luxury car brands such as Porsche is a regret created by the times. Then, among the new forces of Chinese car-making, whether China's "Porsche" can be born is still unknown.