"Today, Leap celebrates its 8th birthday, and it is really not easy for us to get to where we are today. On December 24, Zhu Jiangming, founder, chairman and CEO of Leapmotor, expressed deep emotion about the 8-year development process of Leapmotor in a letter on the 8th anniversary of Leapmotor.
After a two-year sweet period, the new car-making forces will finally feel the unprecedented pressure to survive in 2023. WM Motor, the former new power sales champion, was bleak out, and the once outstanding representative of "Wei Xiaoli" had to put down their dignity, rectify internally, reduce costs and lay off employees in the "falling and falling" stock price.
It can be said that in the competitive Chinese auto market in 2023, the new automakers must not only achieve steady sales growth and continue to maintain the high cost performance of their products, but also need to show sufficient long-term competitiveness in the capital market.
This is particularly prominent for Leapmotor, which has only been on the market for one year and has been low-key and does not like publicity.
"Every year at this time, I revisit the path we've traveled with trepidation. Zhu Jiangming said so and did so.
Looking back - in a letter on the 7th anniversary, did Zhu Jiangming's "words" come true?
"After the IPO, Leaprun entered the darkest moment for a long time. Recently, Zhu Jiangming, founder, chairman and CEO of Leapmotor, said in an interview with the media.
As Zhu Jiangming said, the stock price fell and sales declined, which once pulled Leapmotor into a predicament. On the day of the 7th anniversary of Leapmotor last year, Zhu Jiangming sent a letter to everyone. The letter mentioned: "Leap decided to open a new chapter and become a user's foundry on the basis of global self-development. Every penny is spent on the blade, every innovation falls on the product, providing more pragmatic leapfrog products, knocking out the inflated brand premium, achieving luxury equality with a high price-to-price ratio, and meeting the needs of users. “
Since then, Leaprun has officially entered the stage of continuous acceleration and efficiency improvement.
In terms of sales volume, since May this year, the monthly sales volume of Leap has continued to exceed 10,000, continuously refreshing new highs in delivery volume and maintaining a steady growth trend. From January to November, Leapmotor sold a total of 125537 vehicles, ranking behind Ideal and Weilai, ranking among the top three new forces, ahead of Xiaopeng, Deep Blue, Zeekrypton and other brands.
What's more worth mentioning is that for several months and weeks, Leap's sales were second only to Ideal and ranked second. In terms of monthly sales data, Leap surpassed NIO from April to June and September to November this year, and surpassed Xpeng from April to September, and Leap is expected to reach a new high in December, breaking through the 20,000 mark, and its annual sales are expected to rank among the top three new forces.
The steady increase in sales volume, coupled with the increase in average selling price brought about by the improvement of the sales model structure, as well as the continuous cost reduction and efficiency improvement, the performance of Leapmotor continued to improve, and finally achieved an early positive gross profit margin.
According to Leapmotor's financial report for the third quarter of 2023, the single-quarter sales revenue reached 5.656 billion yuan, an increase of 31.9% year-on-year and 29.4% quarter-on-quarter. The company's gross profit margin turned positive for the first time at 1.2%, and the gross profit margin was reached 100 days ahead of schedule (the original target was reached at the end of this year), and the net cash generated by operating activities continued to flow in.
All this is thanks to the steady growth of Leapmotor sales, which makes the scale effect appear and the cost advantage becomes more and more prominent.
In the first financial report after the listing of Hong Kong stocks in Q3 in 2022, the gross profit margin of Leap is -8.9%, the gross profit margin in Q4 of 2022 is -6.9%, the gross profit margin of Q1 in 2023 is -7.8%, and the gross profit margin of Q2 in 2023 is -5.2%, and the gross profit margin of Q3 Hong Kong stocks in 2023 will turn positive for the first time on the first anniversary of its listing to between 10%.
For Leaprun, the positive gross profit margin is a very critical node, and it also releases a positive signal to the outside world, that is, Leaprun ushers in the dawn. In this regard, the relevant securities institutions believe that "with the growth of zero-run delivery, the scale effect needs to be continued to be released, and the company's gross profit margin can be further optimized." ”
The good sales and performance mark that the "efficiency improvement and restart" proposed in a letter on the 7th anniversary of Leaprun have achieved practical results, and Zhu Jiangming's "words" have been realized.
Now: 8th Anniversary of Magnificent Transformation The capital market has shown strong resilience
"In 2023, our product structure has been optimized, and the "dual power" layout of pure electric + extended range has been launched, and our sales volume has grown steadily, and the delivery volume has continued to hit a record high. In the case of very competitive product pricing, we achieved the goal of turning gross profit into positive in the third quarter ahead of schedule, and had the ability of self-hematopoiesis. Thanks to the competitiveness of technology and products, we have ushered in the investment and cooperation of Stellantis Group, a heavyweight global strategic partner, which has opened a precedent for reverse joint ventures in China, and created a unique new model of global development of asset-light going overseas. The market value of Leap once hit a new high, and investors' confidence doubled. In a letter on the 8th anniversary, Zhu Jiangming summarized a series of achievements made by Leaprun in 2023.
Perhaps, experiencing the darkest moment is to complete the gorgeous transformation. Since the beginning of this year, the new energy vehicle capital market is going through a cold winter period, and in this context, the survival situation of many new forces, including Xiaopeng and Weilai, is difficult.
In the third quarter, Xpeng Motors' net loss was still as high as 3.89 billion yuan, and the gross profit margin was only -2.7%. In terms of profit performance, it lags behind the latecomer Leapmotor. It will still take time for Xpeng Motors to reduce costs and increase efficiency and turn losses into profits.
NIO's operating loss in the third quarter was about 4.844 billion yuan, a year-on-year increase of 25.2%, and its net loss was about 4.556 billion yuan, a year-on-year increase of 10.8%, and in the first three quarters of this year, NIO accumulated a net loss of 15.313 billion yuan. However, with the growth of scale, NIO's gross profit margin has gradually come out of the trough.
In terms of stock prices, Xpeng and NIO are also "falling endlessly".
XPeng's share price peaked at HK$199.5 during the year and fell to HK$24.75 on 31 October. After NIO hit a year-to-date high of 123.8 yuan on July 31 this year, it began to continue to decline, and as of December 21, the stock price has been halved from the highest point of the year, and the market value of the two has shrunk seriously.
On the other hand, Leapmotor, entering 2023, the stock price began to rebound strongly, and the market value once hit a new high.
From February to March this year, Leap's share price was still hovering around HK$25 per share, but as the delivery volume continued to pick up, the stock price continued to rise. After April, Leap's share price basically remained at a high level of more than HK$37.
On November 20, Leapmotor announced that it had completed the closing of its stake in Stellantis. The two parties have reached a global strategic partnership, which is the first case of laying out the global market in a joint venture model, and it is also the first cooperation project between a new force and a multinational giant.
Benefiting from the favorable stimulus of Stellantis Group's shareholding, the capital market is optimistic about the performance outlook and future development prospects of Leapmotor, which makes Leapmotor's share price continue to strengthen, and its market value once hit a new high of 54 billion Hong Kong dollars. This has greatly boosted investor confidence and paved the way for the development of bullish zero in 2024.
In 2023, Leapmotor will achieve a two-line catch-up in the sales market and capital market, indicating that everything is growing on the positive side of Leapmotor. Aside from the bizarre capital environment, Leapmotor's strong resilience in the capital market is mainly due to the company's stable fundamentals.
The route of global self-development + vertical integration is the core competitiveness of Leapmotor, and from the perspective of this year's market results, the effect of Leapmotor's accumulation has been revealed. At the same time, through its global self-research capabilities, Leapmotor ensures the pace of vehicle propulsion, vertically integrates and empowers supply, and ensures the delivery efficiency of Leapmotor, which has always been able to maintain a high acceleration in the current context.
This is also where Leapmotor can show its resilience in the capital market, and the global self-development + vertical integration model has also brought many positive benefits to Leapmotor on the consumer side.
The company plans to launch a variety of new models by the end of 25 years at the rate of one to three models per year in the future, covering sedans, SUVs and MPVs of various sizes, to help Leapmotor cover a wider range of customer groups, further improve the company's product sales structure, and the sales scale will increase on a large scale.
Therefore, it is not difficult to see that Leaprun Future contains a huge potential market value space.
Future: Two routes at the same time bring multiple growth curves are expected to help the financial data perform well.
Today's new energy vehicle enterprise battlefield not only tests resources and speed, but also tests the thinking of car companies on technology and industrial development. In the continuous great changes in the auto market, the basic logic of "product is king, technology is king" has not changed.
Different from many new car-making brands, Leapmotor adopts a strategy of "global self-development" in terms of strategy and play. Leapmotor has repeatedly stated publicly that global self-research is the key to building the underlying core competitiveness of the enterprise. Not only independent research and development of core technologies such as three-electric technology, intelligent network technology, and intelligent driving technology, but even the hardware is built from the bottom and produced by itself.
In the past, long-term global self-development has helped Leapmotor achieve rapid "acceleration" in technology, but Leapmotor is still increasing its research and development. In the third quarter of this year, Leaprun's R&D expenditure increased by 17.3% year-on-year and 15.4% quarter-on-quarter to RMB474 million.
While the investment has increased, Leapmotor has always maintained the industry's leading cost efficiency. "In terms of R&D investment and output, Leapmotor has the highest efficiency compared with traditional car companies and new forces. Zhu Jiangming once said.
The continuous growth of R&D investment has brought differentiated advantages and first-mover advantages to Leaprun in several core technologies.
In terms of powertrain technology, Leapmotor is currently the only one among the four listed new power car companies that adopts the dual power form of "pure electric and hybrid".
As the basic disk of Leapmotor's technology, in terms of pure electric vehicles, Leapmotor has successively launched technologies such as eight-in-one electric drive and the first mass production of CTC battery chassis integration, gradually achieving industry leadership. With the slowdown in the growth of pure electric vehicle sales, Leapmotor responded quickly and began to make efforts to maintain a high growth rate in the hybrid market. Based on the actual needs of users, Leaprun reduces users' range anxiety in the form of range extension while maintaining the OTA frequency and user UI interface experience.
Intelligence has always been regarded by the industry as the most important core competitiveness of automotive products in the next few years. In this field, Leapmotor has released the LEAP3.0 architecture, which realizes a new intelligent car experience with high computing power, fast communication, and low latency.
Huaxi Securities Research Report believes that intelligent ability is the core factor of the next stage of vehicle competition, and electronic and electrical architecture is the foundation of intelligence. Tesla and new forces have led the gradual implementation of the centralized architecture, intelligently reshaping the vehicle competition pattern and rebuilding the valuation system.
The technical advantages brought by the global self-research have not only helped Leapmotor achieve rapid sales growth in the domestic market and obtain good financial data, but also opened the door for Leapmotor to go overseas.
This year's Leapmotor C10 exhibited in Munich has been widely praised by local audiences in Europe, and Zhu Jiangming said that at the auto show, many local dealers have expressed interest in Leapmotor products. In the next two years, Leapmotor plans to release five new models to the global market and sell them in Europe, Asia Pacific, the Middle East and the Americas.
At present, Leapmotor has the technology to meet the strict requirements of developed countries such as Europe and the United States. With its differentiated advantages such as leading three-electric technology and intelligent level, Leapmotor is expected to show its strength in the automobile market in Europe, Southeast Asia, etc., which has not yet entered the era of full competition, thereby bringing better financial returns, and overseas markets may become one of the important help for Leapmotor to achieve profitability.
In addition to the sales of automobiles, the technology output represented by the strong alliance with Stellantis Group is also becoming a new growth curve for Leapmotor.
Large-scale products bring price and technology competitiveness, while technology output can improve revenue capacity and bring diversified profit mix models. Leapmotor has taken off both product and technology routes, and under multiple growth curves, it will surely achieve better financial performance.
"Eight years ago, Leapmotor resolutely stepped into the field of smart electric vehicles, and we firmly chose a global self-development path that cannot be easily replicated by others. If we say what we have done right in the past 8 years, first of all, we have adhered to the technical route of global self-development. It is also through the moat formed in terms of intelligent electric technology that Leapmotor can be invincible in the fierce market competition. In 2023, the rapid development of China's new energy vehicles has become the focus of global attention, followed by more fierce market competition and a more 'volume' industry ecology, and we will face more challenges in the future. ”
Zhu Jiangming highly affirmed the persistence and efforts of Leaprun on the road of self-development in the whole field, and in the face of future challenges, he said: "Only by maintaining a keen market insight ability, in-depth understanding of user needs, and constantly optimizing products and services can we win the trust of more users; ”
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