Nezha Automobile, a company that once shined in the new energy vehicle market, is now rushing to apply for listing on the Hong Kong Stock Exchange. Why is this company raising money urgently, and what is the story behind it? Since its establishment in 2014, Nezha Automobile has accumulated a huge loss of 18.4 billion, with only 2.8 billion yuan of cash left on its books, facing the risk of breaking the capital chain.
【History】
The story of Nezha Automobile began in 2014, when Nezha Automobile, a sub-brand of Hezhong New Energy Automobile Co., Ltd., entered the fast-growing new energy vehicle market with great ambitions. At first, Nezha Automobile quickly stood out in the market and became a new star in the industry with its unique design and technological innovation.
However, the good times did not last long, and the road to Nezha Automobile's operation was not smooth sailing. Although in 2022, Nezha Automobile will become the new force sales champion with sales of 150,000 units, but behind this brilliance lies huge economic pressure. The sale of each car seems to be laying a hidden danger for the company's finances, because according to the company's disclosed data, Nezha Auto actually lost as much as 55,000 yuan per car sold.
Heading into 2023, the situation in the market is starting to change. Nezha Automobile's sales fell by 18% year-on-year, selling only 124,000 units, which is a unique negative growth record among new car manufacturers. In contrast, the sales growth rate of its rivals Ideal, NIO and Xpeng reached 183%, 31% and 17% year-on-year respectively, while Leapmotor surpassed Nezha Automobile with 144,000 sales.
At the same time, Nezha Automobile's financial situation is becoming more and more severe. From 2021 to 2023, Nezha Automobile's losses will be 4.8 billion yuan, 6.7 billion yuan and 6.9 billion yuan respectively, with a cumulative total loss of 18.4 billion yuan. This continuous financial loss has greatly reduced Nezha Auto's image in the capital market, and also made the company urgently need to find new sources of capital to maintain operations.
Faced with such a dilemma, Nezha Automobile chose the road to the public market. On June 26, 2024, Nezha Automobile officially submitted its listing application to the Hong Kong Stock Exchange. The company hopes to raise funds through the listing to alleviate the existing financial pressure and inject new impetus into future development.
However, even if it goes public, it is not a one-time solution. Nezha Automobile mentioned in the prospectus that the company is optimistic about China's new energy vehicle market, and expects new car sales to reach 22.8 million units by 2028. In order to achieve this goal, Nezha Automobile not only has to solve the current financial problems, but also needs to find its own positioning in the fierce market competition.
In addition, Nezha Automobile is also trying to seek new growth points by exploring overseas markets. In particular, the company mentioned that it has become one of the top three brands of new energy passenger vehicles in Southeast Asia in 2023. The success of this strategy will directly affect Nezha Automobile's future market performance and brand image.
In the domestic market, Nezha Automobile's performance is still full of challenges. In May 2023, Nezha Automobile's sales volume was 10,113 units, down 22% year-on-year, and it was the only one among all major new power brands to see a year-on-year decline in sales. This data not only shows the decrease in the market demand of Nezha Automobile, but also reflects the company's product competitiveness, market strategy and brand image need to be further strengthened.
With the arrival of 2024, the challenges faced by Nezha Automobile are becoming more and more severe. Combined sales from January to May were only 44,000 units, which was only 14.5% compared to the company's sales target of 300,000 units. Such a performance makes people full of questions about the future of Nezha Automobile. Whether the company will be able to successfully transform through listing, or continue to struggle with financial difficulties, has become the focus of attention of the market and investors.
With the announcement of Nezha Automobile's submission of the listing application, discussions on the Internet are also in full swing. Netizens from all walks of life expressed their opinions one after another, putting forward different views and heated discussions on the future direction of Nezha Automobile. Below, let's take a look at these hot reviews and feel what everyone really thinks:
The old driver looked at the car market: "Seeing the loss data of Nezha Automobile in recent years, I really sigh that the market is ruthless!" With a loss of 55,000 yuan for every car sold, is this model really sustainable? I hope that the listing can bring a turnaround to Nezha, after all, the brand still has a certain market. ”
Cai Xiaoming: "Nezha's situation is really complicated. Although going public can solve the urgent need, in the long run, it depends on how they optimize costs and improve market competitiveness. At the moment, the challenge is very large. ”
Electric Bang user: "I drove Nezha's car before, and the experience was not bad. But this sales and loss figures are really worrying. What they need to do is not only financing, but more importantly, return to the product itself and improve the quality and cost performance. ”
New Energy Observer: "Nezha's listing is the key point for them to survive or destroy." Cash flow is tight to such an extent that it may be difficult to sustain it if it does not improve quickly through listing. ”
Investing in small retail investors: "After reading Nezha's prospectus, I feel that they are quite confident in the future. Hopefully, their overseas expansion and new products will make a difference. There is no such thing as a permanent winter in the stock market, but not every winter can be survived. ”
Environmental protection expert: "Support new energy, support Nezha!" Although they are in a difficult situation now, as long as they go in the right direction and insist on innovation, there will always be a breakthrough one day. I hope Nezha can prove himself with his strength. ”
Pessimistic Lao Zhang: "This data looks really distressing, Nezha's future will be open." If the IPO is not successful, or if the funds are not used wisely, it may really face bigger problems. ”
Auto market analyst: "Nezha's listing this time can be said to be on the verge of life and death. The competition in the new energy vehicle market is fierce, and every brand is fighting for innovation, technology and service. How Nezha's road will go is really unknown. ”
Xiao Li, an ordinary consumer: "In fact, as consumers, we are more concerned about the performance and after-sales of the car. If Nezha can work harder in these aspects, it may be able to win the market faster. ”
Senior investor Lao Qian: "From an investment point of view, Nezha Automobile is now a high-risk and high-return target. If the management can effectively use funds and optimize operations after listing, there is still potential for development in the long run. ”
These comments reflect the public's concern and expectations for the listing and future development of Nezha Automobile from different perspectives. Although there are different opinions, everyone generally hopes that Nezha Automobile can tide over the difficulties and usher in new vitality. As the listing process progresses, we will continue to pay attention to every movement of Nezha Automobile.