With the advent of the "New Five Generals" era, does Weilai Automobile, which intends to go to the newly listed market, have a "future"?

Wen | Ning Cheng lacked

Source| Bowang Finance

Recently, Weilai Automobile announced on its official website that it intends to be listed on the Singapore Stock Exchange for the second time.

NIO announced that the listing will adopt the method of introducing the listing, with a par value of US$0.00025 per share, and the company's American depositary shares will continue to be mainly listed and traded on the New York Stock Exchange, and the company's Class A shares listed on the New York Stock Exchange can be fully converted with its American depositary shares listed on the New York Stock Exchange.

After completing the listing on the SGX, NIO will become the first smart electric vehicle company listed in the United States, Hong Kong and Singapore, but the capital market will not buy it.

As of the close of U.S. stocks on May 6, NIO's stock price was reported at $14.920, down 2.99% from the previous session, with a total market value of $24.923 billion. Compared with the peak of $55 billion in May 2021, its US stock market value has been "cut". Hong Kong stocks did not reflect ideally, and on the 6th, Hong Kong stocks closed, and Weilai's stock price fell by more than 11%.

As one of the top three enterprises in the new domestic car-making forces, what problems exist in Weilai that make the capital market "cold" to it, and what positive impact can it bring to Weilai when going to the new listing?

01

What is NIO's intention to target a Listing in Singapore?

Once upon a time, riding on the east wind of new energy vehicles, Weilai had a smooth ride in the capital market.

On September 12, 2018, NIO was listed on the NASDAQ, becoming the second pure electric vehicle company to be listed in the United States after Tesla; on March 10, 2022, NIO completed its listing on the Hong Kong Stock Exchange through an introduction and officially began listing.

Introduction to listing is a way for issued securities to apply for listing, unlike IPO listing, enterprises do not need to issue new shares or sell shares held by existing shareholders at the time of listing, and do not involve financing. In the early years, enterprises such as C&D Property and Haier Zhijia also adopted the method of introducing listings to land on Hong Kong stocks.

In the same way of introducing the listing, Weilai has set its sights on the SGX. Why does NIO want to list in three places? I think the reasons for this are quite complicated.

The first is Singapore's excellent position in the international financial community. Singapore is one of the world's most important international financial centres, and according to data released by the Global Financial Centres Index (GFCI) in The September 30, 2021, New York topped the GFCI index, London ranked second, and Hong Kong and Singapore ranked third and fourth.

Secondly, it is the defeat of WEILAI in the US capital market. As mentioned above, Niolai's U.S. stock market value continues to decline, and it has now been "cut off", and just on May 4, the US Securities and Exchange Commission (SEC) put 88 Chinese stocks on the "pre-delisting list", including NIO Automobile.

In this scenario, NIO's simultaneous listing in the United States, Hong Kong and Singapore can not only broaden the financing platform, establish deeper contacts with Asian investors, and build brand equity, but more importantly, it can share the risk and mitigate the investment risks caused by geopolitics.

And overseas listing is also supported by policies. On March 16 this year, the Financial Stability and Development Committee of the State Council held a special meeting and proposed that the Chinese government continue to support various enterprises to list overseas. In addition to WEILAI Automobile's visit to the Singapore Stock Exchange, Guoxuan Hi-Tech, a new energy vehicle related company, also announced on May 5 that it will be listed on the Swiss Exchange.

02

Sales continue to fall behind, and Weilai's high-end strategy has encountered bottlenecks

Regarding the second listing on the SGX, WEI has publicly stated that the listing in Hong Kong through the introduction method is not to raise funds, the main purpose is to provide alternative trading locations for corporate investors, mitigate geopolitical risks, and expand the investor base while not diluting the interests of existing shareholders.

The words are relaxed, but this can not hide the decline of Weilai in the high-end market of new energy vehicles. Since the beginning of this year, the sales volume of Weilai Automobile has continued to fall behind.

In March, Xiaopeng Automobile ranked first with 15,414 deliveries, followed by Nezha with 12,026 vehicles, ideal 11,034 vehicles and zero-run 10,059 vehicles, and Weilai ranked at the bottom of the "Top Five" with a delivery volume of 9,985 vehicles and ranked seventh in the industry.

Since April, NIO's performance has still been unsatisfactory. The latest delivery data released by NIO Automobile shows that NIO sold 5,074 vehicles in April, down 28.6% year-on-year and 49.2% month-on-month.

In contrast, Xiaopeng Automobile's sales in April were 9,002 units, an increase of 74.9% year-on-year, down 41.6% month-on-month; ideal car sales in April were 4167 units, an increase of 24.8% year-on-year, down 62.2% month-on-month; that is to say, Weilai, which had been leading in sales, had fallen to the altar, and "Wei Xiaoli" was afraid to become "Xiao Weili".

In addition, the new energy "second echelon" Nezha Automobile and Zero-run Car also completed overtaking: in April, Nezha ranked third with 8813 deliveries, an increase of 120% year-on-year, down 26.7% month-on-month; the cumulative sales of zero-running cars in April was 9087 units, which won the sales championship of the new car-making car companies.

In the first half of 2021, Weilai still sat at the top of the list, once winning the first place in the sales list of new forces for 21 consecutive months, but now, Weilai's sales have become the norm.

The author believes that the main reason for the decline in sales of Weilai Automobile is the decline in the attractiveness of its old products, and the new products have just started and have not yet become a climate, and the whole is in a state of green and yellow.

There are three well-known models in Weilai, namely ES8, ES6, ec6, but these three old models have not been upgraded for many years, and the average starting price is 368,000 yuan, which is at the top of the new car-making forces. In contrast, the average starting price of Xiaopeng P7, P5 and G3i is 195,600 yuan; the unified starting price of the ideal ONE is 349,800 yuan, and the competitiveness of Weilai Automobile is not strong.

Moreover, some of Weilai's models have also been impacted by Xiaopeng and ideal new products. For example, Xiaopeng released a large five-seat SUV product in November last year, with a target price of 300,000-400,000 yuan, benchmarking weilai ES6; the ideal new full-size SUV ideal L9 set the pre-price at 450,000-500,000 yuan, trying to compete with the WEILAI ES8 for the market.

In terms of new vehicles, NIO plans to launch three new models, ET7, ES7 and ET5 to the market in 2022. Deliveries of ET7 have now begun at the end of March.

According to public data, the april delivery of the new car NIO ET7 is only 695 units, the performance ability is not very prominent, and it will take time to test whether the arrival of the follow-up new products can get NIO out of the dilemma of declining sales.

It is worth mentioning that WEILAI's investment in research and development in recent years is very conservative. According to the financial report data, from 2019 to 2021, NIO's annual revenue was 7.825 billion yuan, 16.260 billion yuan and 36.1 billion yuan, respectively, with a three-year compound growth rate of 68.66%; in the same period, NIO's R&D expenditure was 4.429 billion yuan, 2.488 billion yuan and 4.592 billion yuan, accounting for 49.08%, 17.03% and 15.66% of revenue, respectively, and the ratio of R&D revenue has been declining.

New energy competition is gradually fierce, but Weilai's R & D revenue ratio has been declining, it is no wonder that the capital market has little confidence in it, in the future, without the hard power of science and technology, Weilai will only become more and more difficult to walk on the high-end road.

03

Continuous losses, WEIlai is difficult to have a future

The so-called blessings are incomparable, and the misfortunes are not alone. In addition to the decline in sales, WEILAI's ability to control the supply chain has also been criticized by the market.

As early as March, Weilai Automobile was delayed in the delivery of some models due to the suspension of production by a number of supply chain partners; on April 9, Weilai announced the suspension of production of the whole vehicle, and the official release of Weilai Automobile said: Because of the impact of the epidemic, Weilai's supply chain partners in Jilin, Shanghai, Jiangsu and other places have stopped production, and the current parts inventory has been exhausted and has to stop production.

It can be seen that WEILAI's control over the supply chain is lacking, and in the severe environment of the core shortage crisis and repeated global epidemics, the subsequent output and sales of WEILAI Automobile cannot be guaranteed.

In addition, the real pressure on Weilai lies in the soaring cost of the new energy vehicle industry chain. Since the beginning of this year, due to the soaring price of raw materials, the new energy vehicle industry chain has ushered in a sharp price increase. Tesla, Ideal, Xiaopeng, WM, Zero Run, Wuling Hongguang MINI EV have risen in price, ranging from 2,000 yuan to 30,000 yuan.

Weilai also joined the queue of price increases. On April 10, NIO announced that the starting price of ES8, ES6 and EC6 models will be raised by 10,000 yuan, the starting price of NIO ET7 and ET5 will not change, and the rental service fee of Bass long-lasting battery will be raised from 1480 yuan / month to 1680 yuan / month.

In the high-end market of new energy, Weilai's competitiveness has not been strong, so in the case of the general rise of various brands, Li Bin has sworn not to rise, but in the end, he cannot resist the double attack of the epidemic and the rise of raw materials. Li Bin helplessly said: "Raw materials, especially battery raw materials, have risen too much this year, and I can't see a downward trend in the near future, I originally wanted to carry it, the epidemic situation is even more unbearable, the price increase is also forced, please understand." ”

However, what is more embarrassing than the "speed of light punching the face" is that Weilai's position in the high-end market of new energy is precarious. At present, SAIC Motor has launched the "Feifan" car, positioned as a high-end brand and will operate independently; in addition, BYD, Avita, Great Wall Salon, and other car companies have also begun to lay out the high-end market, and the competition in the new energy high-end market is becoming more and more fierce.

To this end, NIO has set its sights on a more environmentally conscious Europe. According to NIO's planning, in 2022, NIO will build a sales network and service system in Germany, the Netherlands, Sweden, Denmark and other four European countries, and open the delivery of the first model in Norway in September this year - the new ES8 of the smart electric flagship SUV.

With increasingly fierce domestic competition, going to sea may help WEILAI fight for a larger market. However, it should be noted that as a brand new brand, WEILAI needs to invest heavily in brand building, channel development, localization adjustment and other aspects in the early stage. In the short term, it is difficult for overseas business to bring satisfactory benefits to NIO.

In addition, Weilai has not achieved real profits so far, and continuous losses have become a "headache" for capital. According to the prospectus, from 2018 to 2020, the corresponding net losses of NIO were 9.639 billion yuan, 11.2957 billion yuan and 5.3041 billion yuan, respectively; in the first nine months of 2021, NIO's net loss was 1.8735 billion yuan.

The high-end route has encountered bottlenecks, overseas business is still starting, NIO's cost expenditure may continue to grow, and the cash flow in its hands continues to be under pressure. For Weilai, which lacks the ability to "make blood", even if it is listed in three places, it is difficult for Weilai to have a future.