Cialis, which started from a small county town in Chongqing, has now become a new car-making force with a high market value after being deeply bound to Huawei, but the story has just begun, and there are still many variables
Text: Deng Yujie
Editor|Wang Jingyi
Who is the largest EV manufacturer in China by market capitalization?
The answer to this question has changed many times, and Cialis (601127. SH) has been hitting the first place lately.
On June 18, Cialis reached the top for the first time, and the market value of the closing day reached 151.507 billion yuan, surpassing Li Auto's 151 billion Hong Kong dollars (about 137.5 billion yuan).
In the following week, Cialis maintained its first position, and the market value gap with the second place continued to widen. However, due to stock price fluctuations, starting from June 25, the market value of Cialis fell slightly, and the stock price closed at 85.71 yuan on the same day, and the name of the first stock in the market value of the new force returned to the ideal.
Whether it is the first or not, it is undeniable that Cialis has entered the first echelon of the market value of new car-making forces.
In 1986, when Zhang Xinghai opened a parts factory in Chongqing, he probably did not expect that 38 years later, it would become a dark horse for China's new car-making forces.
The history of Cialis has been full of twists and turns, from selling motorcycle parts at Phoenix Electric Spring Factory to entering the automotive industry. In 2016, he bet on the new energy track, and met Dongfeng Group and Huawei at the most appropriate time, cooperated with them, and enjoyed the dividends of the era of new energy vehicles.
In 2021, Huawei and Cialis jointly launched the Wenjie AITO, which successively launched three SUV models, the Wenjie M5, M7, and M9, and the early sales had ups and downs, but continued to rise in the past six months, with a record monthly delivery of 32,226 units in May 2024.
Driven by sales, Cialis also turned losses into profits for the first time in the first quarter of 2024, achieving a net profit attributable to the parent company of 220 million yuan, an increase of 845 million yuan over the same period of the previous year, and its market value soared simultaneously.
In addition to asking the world, Cialis also has its own new energy brands, such as Landian and Ruichi. However, more than 90% of the car sales of Cialis are contributed by Wenjie.
The question then arises: If Huawei is left, will Cialis still be the new force with the largest market capitalization?
The market value has soared, relying on sales and Huawei
The market value of Cialis has soared, which is directly due to the increase in sales of Wenjie.
From the fourth quarter of 2023, the sales volume of Wenjie began to increase rapidly. From September 2023 to May 2024, the sales volume of Wenjie rose from 6,708 units to 32,226 units, an increase of 380.4%.
The increase in sales is closely related to the launch of the Wenjie model. From September 2023, the new M7, the new M7 rear-wheel drive intelligent driving version, the new M7 Ultra, the new M5 and the M9 will be launched one after another, and the configuration and intelligent driving capabilities will also be continuously improved. Taking the M9 as an example, it is equipped with Huawei's high-end intelligent driving, Turing chassis, Xuanwu body, CATL 4C Kirin battery, etc.
Especially in May 2024, the sales of the Wenjie series broke a new high, with the sales of the M5, M7, and M9 performing well, with 5,583 units, 10,181 units, and 16,462 units, respectively. In addition to the M9, which will start deliveries in February 2024, the new M5 and new M7 rear-wheel drive versions were released in April and May 2024, respectively.
Due to the fact that Wenjie was originally exhibited through Huawei stores, and Huawei provided the main selling point of Wenjie intelligent driving, most consumers tied Wenjie and Huawei together, but in fact, Wenjie car was launched by Huawei and Celis in cooperation.
From the perspective of division of labor, Sailis is responsible for the entire life cycle of vehicle products, such as R&D, intelligent manufacturing, and delivery services, and Huawei is deeply involved in product definition, vehicle development, and channel sales. Huawei is highly empowered and conducts joint quality control and joint marketing with Celis.
In the product structure of Cialis, the question world accounts for the majority. According to the May 2024 production and sales express report of Sailis, the sales volume of new energy vehicles under Sailis Group Co., Ltd. is 34,130 units, of which 32,202 are Sailis Automobiles (Wenjie), accounting for 94.3%.
In addition to the world, Cialis itself has four brands that really belong to smart electric vehicles, including Landian and Ruichi sold in China, and SERES and DFSK sold abroad, but they have not yet played their own influence.
Taking Blue Electric as an example, in May 2024, the sales volume of the Blue Electric brand will only be 1,705 units, and in the past year, the monthly sales volume of Blue Electric will not exceed 5,500 units.
When the sales volume of Wenjie took off, the market value of Cialis also took advantage of Huawei's "far ahead" east wind to reach the top.
In 2023, the company's operating income will be 35.842 billion yuan, a year-on-year increase of 5.09%, and the net profit attributable to shareholders of listed companies will be -2.450 billion yuan in the same period.
After nearly four years of net profit losses, Cialis ushered in a profit for the first time in the first quarter of 2024, with an operating income of 26.561 billion yuan, a year-on-year increase of 421.76%, and a net profit attributable to the parent company of 220 million yuan, an increase of 845 million yuan over the same period last year.
Cialis revealed to Caijing that the company's gross profit margin of bicycles has also continued to improve in the first quarter, exceeding the ideal 20.6% and reaching 21.5%.
As for the stock price, it has risen from about 9 yuan in October 2020 to 106 yuan in March this year.
It is not the first time to cooperate with giants
It is not the first time to cooperate with the big guy, Cialis used to be well-off in Dongfeng, and now it is the world.
In 1986, Zhang Xinghai established Phoenix Electric Spring Factory in Ba County, Shapingba District, Chongqing, mainly engaged in motorcycles and shock absorbers, with assets of less than 300,000 yuan.
It was in 2003 that the company switched from motorcycles and parts to automobiles. The development and growth of the spring factory was renamed Yu'an Group, just when Dongfeng Group re-selected partners, so the two sides jointly established "Dongfeng Yu'an Vehicle Co., Ltd.", mainly engaged in micro passenger and cargo vehicles, which was a typical case of the integration of central enterprises and private enterprises at that time.
Later, Yu'an Group changed its name to Chongqing Xiaokang, and the joint venture car company became Dongfeng Xiaokang, which mainly produces miniature passenger and cargo vehicles. In 2005, the first Dongfeng Xiaokang was launched, and by 2009, the annual production and sales of Dongfeng Xiaokang had reached 200,000 units, becoming the top three in China's micro-car industry, with a market share of more than 10%.
In 2016, Xiaokang shares successfully landed on the Shanghai Stock Exchange with the stock code 601127. In the same year, Xiaokang began to comprehensively transform into new energy, started its third venture, and chose to stay in the United States to set up a new energy vehicle division in Silicon Valley to do research and development. "Caijing" learned that during the period in the United States, the Cialis team bought the Hummer factory in the United States and dug up a lot of Tesla technicians to jointly develop the core three-electric technology.
However, in addition to relying on Dongfeng to build Dongfeng Xiaokang, Dongfeng scenery and other models are known, Xiaokang shares themselves are still a "small transparent". From 2017 to 2020, the operating income of Xiaokang shares continued to decline, and the net profit also fell rapidly from 1.101 billion yuan to -2.234 billion yuan.
Zhang Xinghai, the founder of Xiaokang Co., Ltd., who was under pressure, was anxious to find a way out of trouble, and Yu Chengdong came.
At this time, Huawei is suffering from chip sanctions from many countries, including the United States, and mobile phone sales are also declining. Car companies are afraid that they will not only lose their dominance, but also be labeled as "selling their souls".
Although Cialis has long been deployed in the field of new energy, it has been unknown, coupled with the continuous decline in the revenue of Xiaokang shares, the net profit from 2017 to 2020 fell rapidly from 1.101 billion yuan to -2.234 billion yuan. Choosing to cooperate with Huawei is to press the acceleration button for its own new energy transformation, and it is also a road that has been traveled and succeeded.
In April 2021, witnessed by the Chongqing Municipal Government, Xiaokang and Huawei signed a cooperation agreement on the new energy vehicle project of Celis.
In 2022, the three new energy vehicles of Wenjie M5, Wenjie M7 and M5 pure electric versions were launched and delivered successively, and this year, the annual sales of AITO Wenjie series exceeded 75,000 units, becoming one of the fastest-growing new energy brands in China.
And that's just the beginning. For the whole year of 2023, the company sold 104,000 units. It was also in this year that Xiaokang changed the listed name "Xiaokang Shares" to "Cialis", the stock code remained unchanged, and the company name was changed to "Cialis Group Co., Ltd." accordingly.
Is it a Huawei foundry?
Since cooperating with Huawei, Cialis has been questioned about becoming Huawei's "foundry". In this regard, Yu Chengdong denied it: "In fact, the two sides are joint research and development. ”
Cialis has also emphasized on many occasions that it is not a foundry, nor does it do a foundry, and every time a car is sold, the income belongs to Cialis, and Huawei extracts the corresponding service fee.
In the past few years of cooperation with Huawei, Cialis has increased its R&D investment, from 1.949 billion yuan to 4.438 billion yuan from 2021 to 2023.
The R&D investment of 4.4 billion yuan is not much compared to other new forces. In 2023, NIO will invest 13.431 billion yuan in R&D, 10.586 billion yuan in Ideal, and 5.277 billion yuan in Xpeng.
What has Cialis developed? The results are mainly reflected in the "one machine and three factories", the only Rubik's Cube platform in the industry that can be compatible with three power forms, and three smart factories that produce three models of Wenjie.
According to the official introduction of Cialis, the Rubik's Cube platform is the only platform in the industry that can be compatible with three power forms, including super-increase, pure electric, and super-hybrid - as a comparison, the existing ideal car LEEA architecture supports super-increase and pure electric, and Geely and Volvo SEA Haohan platform only supports pure electric. In terms of model compatibility, the Mosaic platform supports models from B-class to D-class, covering multiple categories of sedans, SUVs and MPVs.
The three smart factories owned by Sailis are all located in Chongqing, namely the Liangjiang factory for the production of the Wenjie M5, the Fenghuang factory for the production of the M7, and the new Liangjiang factory for the production of the M9. Among them, the super factory has an integrated die-casting technology with a clamping force of 9000T, which can highly integrate parts, reduce welding points, and improve the stiffness, strength and safety of vehicles.
At present, the self-developed technology of Cialis is concentrated in platform and factory production. "Caijing" learned that after the sales of Wenjie reached the top, Cialis also hopes to play its own technology and luxury cards.
While R&D expenses continue to rise, selling expenses are also increasing. From 2021 to 2023, the sales expenses of Cialis have increased rapidly from 1.28 billion yuan to 5.465 billion yuan, and the rate has been as high as 15.25%.
For the relatively high sales rate, Cialis once explained in the financial report, the 2022 interim report: "mainly due to the increase in high-end new energy vehicle publicity expenses, sales service fees, etc.", 2022 annual report: "Through in-depth strategic cooperation with partners, the company has obtained extremely high-quality online and offline channels, publicity and other comprehensive sales resources with the industry-level sales expense rate".
Cialis is trying to ride the wind in this cooperation, and now that the market value and gross profit margin have achieved their goals, the next question is how to maintain it. On the one hand, it is to expand overseas, and on the other hand, it is to build its own brand.
In the 2023 annual report, the explanation of the changes in sales expenses has added an item of "overseas marketing investment". In the investor interactive platform, Cialis said that it has entered many countries around the world in Europe, the Middle East, the Americas, and Africa, and completed the initial layout of overseas markets; The company has exported more than 500,000 vehicles.
In March 2023, Sailis launched a new new energy vehicle brand - Landian, the first model of Landian E5 is equipped with BYD Fodi power system and HUAWEI Hicar 3.0, with a price of 99,800 yuan to 119,800 yuan.
In May 2024, the sales volume of the blue electric brand is only 1,705 units, and in the past year, the monthly sales volume of blue electricity is not more than 5,500 units.
If it leaves Huawei, will Cialis still be the new force with the largest market capitalization?
The outside world is always so suspicious, and Cialis himself must be anxious. But the crux of the matter is that there is no if - Cialis has been deeply bound and integrated with Huawei, and in the visible future, this binding will only continue to deepen.
Therefore, compared with repeated questioning and doubting, doing a good job in the current delivery and doing a good job in every car in the next is the only important thing for Cialis at this stage.