Jianghuai Automobile sells 4.5 billion factories, NIO will be the biggest winner?

Although NIO has not yet been able to get out of the loss, it has now gained a firm foothold in the luxury electric market with good products and services. But compared with new forces with production qualifications such as Ideal and Xiaopeng, NIO still lives under the fence. NIO has been manufactured by JAC and the cooperation between the two parties has been maintained since 2016. In fact, Jianghuai and NIO were not optimistic about the outside world at the beginning of the cooperation intention, but NIO founder Li Bin was very firm about this decision, and said in response to doubts that "Porsche's factory is not as good as Jianghuai's factory", but now Jianghuai Automobile is going to sell this factory.

A few days ago, Jianghuai Automobile issued an announcement that the company intends to transfer some assets through public listing, involving the inventory, fixed assets, construction in progress, housing and buildings, land use rights of the passenger car company's three factories, and the structure and equipment assets of the passenger car company's Xinqiao plant. The proposed listing price is 4.498 billion yuan, and the value-added amount is 286 million yuan.

The two factories involved in the transfer of JAC Automobile assets are actually the two factories cooperated between JAC and NIO, the JAC NIO Advanced Manufacturing Base and the NIO Second Advanced Manufacturing Base, namely the NIO F1 Plant and the NIO F2 Plant. NIO responded that the company has learned about the partners and confirmed that the action will not affect the company's future production and operation activities. The Company will communicate on the matter in due course and will not comment on this matter until then.

It stands to reason that Jianghuai Automobile has sold the factory, and NIO, as a partner party, can still reply so calmly, which also confirms who will be the buyer of Jianghuai Automobile Factory in the future, which is also likely to be the result of the joint decision of both parties. It is worth mentioning that as of the close of trading on October 19, the stock price of Jianghuai Automobile was reported at 14.3 yuan / share, and the latest market value was 31.2 billion yuan. Since the end of September, its share price has risen by more than 10%.

Jianghuai Automobile pushes the boat along the water

According to the automobile sales performance disclosed by Jianghuai Automobile recently, the company sold a total of 441,200 vehicles in the first three quarters of this year, an increase of 18.7% year-on-year. In the passenger car business segment, SUV sales in the first three quarters were 142,100 units, down 10.81% year-on-year; MPV sales reached 14,800 units, up 7.08% y/y. Sedan sales were 111,700 units, a year-on-year increase of 161.08%.

However, according to the performance report disclosed by Jianghuai Automobile, the capacity utilization rate of the company's passenger car plant in 2022 will only be 83.85%, and 60,000 of the 370,000 units with cumulative design capacity have not been applied. According to the official website of Jianghuai Automobile, the third plant of Jianghuai Passenger Vehicle was completed in early 2013, with a total investment of 2.18 billion yuan, an annual production capacity of 240,000 units in double shifts, and the first model to roll off the production line is the Jianghuai Ruifeng S5.

Therefore, Jianghuai Automobile said for the listed transfer of assets that the asset transfer can further optimize the asset structure, will not affect the company's normal production and operation, does not involve personnel arrangements, if the transaction is successfully implemented, it will have a positive impact on the company's financial status and business performance, subject to the final transfer price and annual audit results.

And according to the announcement of Jianghuai Automobile, from January to August 2023, the company achieved a total operating income of about 30.2 billion yuan, a year-on-year increase of 24.26%; The net profit attributable to the owners of the parent company was approximately 170 million yuan, compared to a net loss of 936 million yuan in the same period last year. The net book value of the transferred assets is about 4.212 billion yuan, the assessed value of the assets to be transferred is about 4.498 billion yuan (the evaluation reference date is April 30, 2023), the value-added is about 286 million yuan, and the appreciation rate is 6.79%, Jianghuai Automobile can also make a small profit and alleviate the pressure of losses.

The relevant person in charge of Jianghuai Automobile said that if the transaction is successfully implemented, it will have a positive impact on the company's financial position and operating performance.

NIO's production qualification is coming?

Earlier this year, Li Auto acquired the Shunyi plant of Beijing Hyundai and eventually obtained the production qualification for new energy passenger vehicles, including extended-range models. After the rise of the wave of "Internet car manufacturing", the foundry model that can circumvent qualification restrictions has been widely used, including Xpeng, Zerorun and other new forces have chosen the foundry model in the early days, but now many new forces have abandoned the foundry model.

The new forces have all chosen to abandon foundry, mainly because the foundry model has drawbacks such as high costs, and foundry is also subject to the production and quality control capabilities of traditional automobile companies. For manufacturers, taking the initiative of the whole process of car manufacturing into their own hands will not only facilitate the rapid iteration of models, but also improve efficiency if major and in-depth reforms are carried out in the future.

Although Li Bin said before that "Porsche's factory is not as good as Jianghuai's factory", but time has changed, most of the new forces now have their own production qualifications and factories, and have their own say in price and quality control, and delivery, especially in the current fierce price war, NIO also wants Jianghuai OEM will also affect NIO's profit performance after that.

Industry insiders said that the three plants and Xinqiao plants involved in the transfer of Jianghuai Automobile's assets are the F1 and F2 plants manufactured by NIO. Both plants are built by NIO, but the production qualification is affiliated with Jianghuai Automobile. The transfer of the plant by Jianghuai Automobile is essentially a transfer of production qualifications.

At the same time, the factory sold by Jianghuai was originally tailor-made by NIO, and it also spent a lot of money on factory renovation and upgrading. In addition to NIO, other brands may not take over, so to a large extent, this is a big gift from Jianghuai to NIO.

At present, all 8 models of NIO's second-generation technology platform have been launched, and NIO has also become the world's first smart electric vehicle brand to complete the vertical switch of technology platform. Sales data shows that in September 2023, NIO delivered a total of 15,641 units, a year-on-year increase of 43.8%. As of the third quarter of September 2023, NIO's total deliveries were 55,432 units, a year-on-year increase of 75.4%, and quarterly deliveries reached a record high. From January to September 2023, NIO delivered a total of 109993 new vehicles.

Previously, NIO made Jianghuai OEM need to pay OEM fees, which also reduced NIO's profit performance to a certain extent, and NIO will have more say in the supply chain, delivery, quality control, pricing and other aspects after having production qualifications in the future, I believe that the independent production of NIO will also accelerate to get rid of the shadow of losses.