Li Bin received 15 billion yuan, and 100 billion NIO continued his life
Reporter丨Yang Song, Yan Ziwei Editor丨Yan Ziwei
Li Bin got new financing.
On December 18, NIO announced that CYVN Holdings, an Abu Dhabi investment institution, will invest about 2.2 billion US dollars, equivalent to RMB, in cash to the company, more than 15 billion.
The transaction is expected to close this month, when NIO's largest shareholder will become CYVN Holdings, which holds 20% of the shares, and the actual controller will still be Chairman and CEO Li Bin.
The car company's net loss in the first three quarters was 15.3 billion yuan, and after the new investment was recorded, it was just wiped out.
"With new financing at the end of the year and a significant increase in cash flow, the quality of NIO's statements will look better. Cui Dongshu, secretary general of the passenger association, told the "21CBR" reporter.
60 billion in cash
This is the second time Li Bin has received investment in the Middle East.
Abu Dhabi is the capital of the United Arab Emirates, and CYVN Holdings is controlled by the local government and has strong financial strength.
In July, NIO issued new shares at a price of US$8.72 per share, earning US$740 million in CYVN. The other party also spent $360 million to acquire some old shares from Tencent.
Five months later, Li Bin asked him to give generously again.
This time, NIO plans to issue 294 million new Class A common shares at a price of $7.5 per share. Compared to last time, the price has been discounted by 85%.
Since August, NIO's U.S. stocks have fallen by 45%, and there is also the possibility of "replenishment" at the price of Middle Eastern tyrants.
With two sales and a massive $3.3 billion investment, CYVN became the largest shareholder of the electric car company.
It is worth noting that NIO is a company with weighted voting rights.
As of the end of last year, Li Bin owned 150 million Class C shares and 30 million Class A shares through three companies, two wholly-owned Originalwish and mobike and one controlled by NIO User Trust, with a total voting power of 44%.
After the deal is completed, he still owns about 39% of the voting rights and controls NIO.
"Because of the super voting rights, I still have the most voting rights, and there is very little change at the shareholder voting level. Lee explained.
He has the title of "little expert in finding money". In September and October this year, NIO also issued convertible senior bonds, totaling US$1.15 billion.
After the new financing is recorded, NIO said that its cash reserves will increase significantly and are expected to reach 60 billion yuan.
As of the end of September, its trade payments and notes payable amounted to about 28.1 billion yuan, and a total of 10 billion yuan needed to be repaid within one year. The former is mainly owed to suppliers.
NIO is still unprofitable, with a net loss of 4.56 billion yuan in the third quarter. At this rate of loss, it will not take long for the funds on the account to be spent, and with the new financing, its liquidity pressure has been greatly eased.
"For NIO, this investment is a relief in disguise, with increased cash flow and a longer period of operation. Zhang Xiang, a researcher at the Automotive Industry Innovation Research Center of North China University of Technology, said.
Prudent
At the business level, he made drastic reforms. The principle is that items that do not improve their financial performance within three years and do not contribute to the increase in gross profit should be adjusted.
"For example, the battery business is divided into R&D and manufacturing, the latter has a long investment period, and we don't have so many resources to do this to ramp up production capacity and improve yield. He gave an example.
After weighing it repeatedly, Li Bin gave up building his own battery factory and chose the OEM method instead.
As a result, in November, the company laid off 10% of its jobs. Based on the total number of 26,000 people last year, nearly 3,000 NIO employees were affected.
"(Layoffs) have an impact on the battery manufacturing sector, but have no impact on the intelligent driving and intelligent departments. Continuously optimizing organizational efficiency is something every company should do. Li Bin came forward to explain.
The senior management also stood up and said that NIO did not squander investors' money and was not an inefficient company.
Last week, Qin Lihong, the president of NIO, said that he and Li Bin have been sharing a 12-square-meter office, and that the reimbursement standard for their business trips is the same as that of employees, which is 400 yuan per day.
"The money that should be spent is resolutely spent, and the money that should not be spent is resolutely saved. Li Bin admitted frankly that it is indeed difficult to do this.
Buying a factory is the "money that should be spent" in its eyes.
In early December, NIO acquired the production equipment and assets of two JAC manufacturing bases, with a total price (excluding tax) of about 3.16 billion yuan.
The company may obtain the qualification to manufacture cars independently. Li Bin calculated that if the car was made entirely by NIO itself, the associated costs would be reduced by 10%.
In addition to taking multiple measures to reduce expenditure, NIO urgently needs to self-hematopoiesis, sell more cars, dilute costs, and exchange more gross profits.
In the first 11 months, the company delivered a total of 142,000 vehicles, a year-on-year increase of 33.1%. Compared with the target of 245,000 units set at the beginning of the year, the completion rate is only 40%.
"NIO's rapid sales growth, high costs and low gross profit per vehicle are important factors restricting its profitability, and its sales pressure is relatively high. Wang Ke, a senior analyst at Analysys, told reporters.
Valuing gross margins
Compared with sales, Li Bin now pays more attention to "gross profit".
"Last year, we lost 10 billion yuan in gross profit, and assuming the cost remains the same, it will be thanks to 10 billion. He said that if the gross profit margin is low, it will be troublesome.
Since its inception, NIO's best year was 2021, with a gross profit margin of more than 20%. The gross profit margin of the whole vehicle in the third quarter of this year was only 11%.
Li Bin's countermeasure is to divide up his forces to increase the share of the NIO brand in the high-end market and increase the gross profit, and the second brand is used to serve more users. Each brand shares technology and intelligence, battery, motor team.
"I'm not going to recruit as many intelligent people as NIO for the second brand. He said.
On the 23rd of this month, NIO will release the ET9, an executive flagship sedan, which is expected to boost gross profit. The price of the new car may reach the million-yuan level, and competing products include the Maybach S-Class, BMW 7 Series, Porsche Paramela, etc.
Li Bin said that this market has a high gross profit margin, mainly business needs, taking into account family and personalization, and is confident to occupy a place.
The first model of NIO's second brand is also about to debut, and its VB (Verification Build, prototype) has rolled off the production line. It focuses on the household market, and has the opportunity to produce models with monthly sales of 5-60,000 units in the price range of 200,000 yuan.
The two new cars have not yet been launched, and NIO has long begun to reserve sales strength.
Currently, it has 5,700 sales consultants, of which more than 3,000 have recently joined the company.
Li Bin said that by the second quarter of next year, the vast majority of these 3,000 people will become mature and can convert sales (sales ability) into sales.
He predicts that 2024 and 2025 will be the two years of the outbreak of the high-end pure electric market, and he expects to sell 20,000 units per month next year.
With $2.2 billion in credit, he will be able to mobilize more resources and impact higher sales.
"Trading money for time, but it doesn't solve the core problem. Former employees of NIO told the "21CBR" reporter that the company's main business is unstable, the front line is too long, and the waste of resources is serious.
He believes that Li Bin is too idealistic and mild-mannered, and needs to be ruthless in scraping his bones to heal the poison.
Image source: NIO