NIO received $2.2 billion in investment, and Li Bin's "future" has more chips

At the critical juncture when domestic new energy enters the critical period, an investment of 2.2 billion yuan has undoubtedly become a "stone from other mountains" to break the conventional pattern.

On December 18, NIO signed a new round of share subscription agreement with Abu Dhabi investment institution CYVN Holodings (hereinafter referred to as CYVN). Under the agreement, CYVN Holodings, through its subsidiary CYVN Investments, will make a strategic investment in NIO in cash form totaling approximately US$2.2 billion. After the completion of this investment, NIO and CYVN will continue to carry out strategic and technical cooperation in the international market.

The investment of the Middle East "local tyrants" also conveyed several messages: first, the Middle East capital is optimistic about domestic new energy vehicles, and second, Weilai has become a "hot player" in the investment community this year, and Weilai, which is at the center of public opinion, is also carrying out its own development "innovation".

Li Bin: He is still the actual controller

The most interesting aspect of this transaction is the fact that the Middle Eastern investor has become the first shareholder after entering the market.

After the completion of this investment, together with the previous equity investment of 1.1 billion, CYVN will hold a total of approximately 419 million shares, which will beneficially hold approximately 20.1% of the total issued and outstanding shares of NIO. It has become the largest shareholder of NIO.

In the face of speculation in the market due to the proportion of equity, Li Bin also responded: he has long been not the largest shareholder in the economic sense. Secondly, because of the super voting power, the voting power of oneself still remains the most. This means that Li Bin, the founder, chairman and CEO of NIO, is still the actual controller of the company.

Li Bin's super voting power has actually been exemplified in many large technology companies. This means that the founders and management control the company's operations through weighted voting rights. Zuckerberg, for example, of FaceBook, owns less than 20 percent of Facebook, but he has a whopping 60 percent of the voting rights.

The existence of super voting rights represents the importance of the start-up team to the company's operation, and although CYVN has become the first shareholder, it has not sought super voting rights, which is a recognition and affirmation of NIO's business direction.

It is worth noting that this investment is a new round of CYVN's investment in NIO after half a year, with a total investment of 3.3 billion US dollars before and after, equivalent to nearly 23.5 billion yuan, giving NIO more say.

As of September 30, NIO had cash reserves (including cash and cash equivalents, restricted cash, short-term investments and long-term time deposits) of RMB45.2 billion, a significant increase of RMB13.7 billion from the previous quarter. After this transaction, NIO's cash reserves will be further increased.

Since the third quarter, NIO's operating conditions have also improved in an all-round way. According to NIO's Q3 financial report, NIO's revenue and delivery volume in the third quarter reached a record high, and a number of core indicators reflecting the company's operating conditions, including gross profit margin, have been comprehensively improved. Among them, the revenue in the third quarter was 19.07 billion yuan, an increase of 117.4% quarter-on-quarter and 46.6% year-on-year, and the delivery volume was 55,432 units, an increase of 135.7% quarter-on-quarter and 75.4% year-on-year, with revenue and delivery volume reaching a record high; NIO's gross vehicle gross profit margin in the third quarter returned to double digits to 11.0%, maintaining a leading position in the pure electric field; the loss narrowed significantly, with a net loss down 24.8% quarter-on-quarter; and cash reserves rose to 45.2 billion yuan, an increase of 13.7 billion yuan from the previous quarter.

The favor of the "local tyrants" in the Middle East has injected a "booster" into today's NIO.

Why are Middle Eastern capitals optimistic about NIO? Li Bin and his "long-termism" insistence

Recently, the accelerated entry of Middle Eastern capital into China has become one of the hot spots in the investment community. The protagonist of this event, CYVN, is a subsidiary of CYVN Holodings LLC, an investment arm of the Abu Dhabi government, which was established in 2022 with the goal of investing in global industry leaders in the field.

CYVN's strategic focus is on the smart mobility industry, focusing on strategic investments and deployments in the field of advanced, intelligent and sustainable mobility, and is committed to partnering with industry leaders in this field around the world.

It is not difficult to see from CYVN's past investments that they are more inclined to invest in leading companies in the development of the industry, and they choose NIO, which is also "carefully selected".

Starting from the second half of 2022, international large capital has successively reduced the shares of some new energy vehicle companies, coupled with the serious "involution" within the industry, more and more weak companies have been eliminated, which has intensified the "big waves and sands" within the industry.

Among the new energy forces, NIO has undoubtedly stood firm in the top position through its own excellent strength.

From the perspective of sales data, from January to November 2023, NIO delivered a total of 142,026 new vehicles, a year-on-year increase of 33.1%. NIO has delivered a total of 431,582 new vehicles, and in the third quarter, NIO ranked first in China's pure electric vehicle market with an average transaction price of more than 300,000 yuan, with a market share of more than 45%. From July to November 2023, in the Shanghai market with an average transaction price of more than 300,000 yuan, NIO's sales surpassed BMW, Mercedes-Benz, and Audi for five consecutive months, regardless of energy form.

From the perspective of future development, NIO, which adheres to the "long-termism", has also come up with a clear plan for the next step.

The first is to continuously enhance its own product strength. Specifically, NIO's dual top-flow models new ES6 and ET5T were launched and delivered in May and June this year, and these two promising models will begin to contribute to full sales in the second half of the year, and by the middle of this year, NIO will have 8 second-generation technology platform models on sale, forming the strongest product lineup in the field of high-end intelligent electric vehicles and entering a strong product cycle.

At NIO Day 2023 in the near future, NIO's executive flagship sedan ET9 will be officially unveiled, and as a million-level flagship model, the ET9 is directly benchmarked against the Maybach S-Class, BMW 7 Series, Porsche Paramela, etc.

In terms of brand and product layout, NIO will also develop a second brand, from the perspective of positioning, NIO's second brand will be based on the family market, the brand's full life cycle is expected to have only 3 models, will be released in May and June next year. At present, the first model of the second brand has recently completed the trial production of the VB (development and verification prototype).

The second is to accurately grasp the trend of the industry, lay out the battery swap business in advance, reduce costs and increase efficiency. NIO's "battery swap circle of friends" is getting bigger and bigger.

With the strong support of Middle Eastern capital, NIO will undoubtedly grasp more initiative in the new round of new energy vehicles.

(Editor in charge: Han Yijia)

Source: Hexun Stock Han Yijia