Barron's magazine used a sentence to comment on "Wei Xiaoli's" performance in October: Xiaopeng was "very good", ideal "average", and Weilai was "shocked".
After a 44% surge in October, Tesla (TSLA) opened the door again on the first trading day of November, closing up 8.5% to $1208.59 on Monday (November 1), setting a new milestone.
From the breakout of $1,000 to the $1,200 target given before the bulls stood, Tesla took only a week. CEO Musk's net worth also increased by $24 billion on Monday to $335.1 billion. According to Bloomberg's real-time rich list, as of November 1, Musk's net worth has far exceeded the $193 billion of Bezos, who ranks second on the rich list, and is three times that of Buffett ($104 billion) in tenth place. Of course, this does not include the bounty he received from nearly 3,000 netizens after he posted the Chinese "Seven Steps Poem" on Weibo on November 2.
Buffett's passion for philanthropy is partly part of the reason for the widening wealth gap between him and Musk, who donates a portion of his Berkshire-Hathaway stock to various charities including the Bill and Melinda Gates Foundation each year. Buffett said in June that his donations have totalled $41 billion over the past 16 years.
Last week, the executive director of the United Nations Food Programme named Musk and called on him to donate $6 billion (2% of Musk's net assets) to solve the global famine. Musk then tweeted back: "If the World Food Programme can say exactly how $6 billion will solve the global famine problem, I will immediately sell Tesla stock and donate, but the financial report must be public so that the public can understand exactly how the money is spent." ”
While Tesla is moving higher, Tesla's competitor in China, Nio, has recently released poor delivery data, and China's "new car-making forces" are undergoing a reshuffle.
1, Tesla long and short spread: $1524
One of the reasons for Tesla's big rally on Monday was sustained by the recent upward momentum, which analysts point to as two other reasons.
First, Tesla on Monday announced the launch of a pilot program to allow other electric vehicles to use the company's 10 supercharger stations in the Netherlands. Tesla said that the charging fee for non-Tesla vehicles is higher, but car owners can choose a membership program, and the charging fee will be cheaper after joining the program. The analysis believes that if the pilot project goes well, it may bring new revenue sources to Tesla.
In addition, Tesla has launched a new financial product in China, where consumers can buy a car through a financial leasing model with a minimum zero down payment. The business is expected to increase demand for Tesla vehicles, and it also shows that the company is confident that it can meet the new demand by increasing production.
After recent good news about deliveries, earnings and partnerships with car rental giant Hertz (HTZZ), Tesla bulls believe the stock price will rise further.
Mark Delaney, an analyst at Goldman Sachs, said that in addition to the recent large order from Hertz, he is also optimistic about the strength of Tesla's overall business. Delaney wrote in the research report: "This large order is important for Tesla to help the company maintain strong growth and improve profit margins, in addition, as the number of fleets using Tesla vehicles increases, which will also bring more profits to Tesla's charging business." ”
Wall Street analysts are currently giving a high of $1591 and a low of $67 for the next 12 months, and the bull-bear spread is $1524, also hitting a record high. The median target price is $860, with a average of $810.49. The median price target is down 28.9% from $1209.32 12 months ago.
Image source: CNN Business
As can be seen from the gap between the highest and lowest target prices, Tesla bulls and bears have very different views of the company. Bulls believe that Tesla's disruption to the auto industry is similar to Apple's (AAPL) subversion of flip phones, and Tesla has many other revenue channels. The bears believe that Tesla is a growing car company and should be valued like a car company.
Giving the lowest target price of $67 is long-bearish GLJ Research analyst Gordon Johnson, who, while Tesla has been rising recently, still gives the stock a "sell."
2, Weilai delivery volume plummeted, demand is not a problem
As Tesla hit new heights, NIO, which has long been considered one of Tesla's biggest competitors in China, has recently suffered a Waterloo. Nio's deliveries in October were only 3,667 units, down 27.5% year-on-year and down 65% month-on-month compared to 10,628 units in September.
Barron's believes that if the weak delivery volume of Weilai represents that China's demand for electric vehicles is weakening, then it is not good for Tesla and many other Chinese electric vehicle manufacturers. But demand doesn't seem to be a problem, because both Xiaopeng and Ideal are performing well, and the global shortage of automotive chips doesn't seem to have affected both companies. Nio's performance compared to similar companies is so bad that there seem to be other factors at play.
NIO management blamed weak deliveries on supply chain disruptions caused by upgrading its production lines. Weilai announced that in October, the production line of Jianghuai Weilai Hefei Advanced Manufacturing Base completed a phased transformation, and the Hefei Advanced Manufacturing Base has gradually resumed production since late October. NIO also noted in its press release that the company's new orders hit a record high in October.
Judging from the performance of the capital market, Weilai has fallen by 16.21% this year, far lower than the performance of the S&P 500 index rising by 24.67% in the same period. Xiaopeng and Ideal have also gained 11.77% and 12.17% so far this year. The news of the sharp drop in deliveries seems to have a limited impact on NIO's stock price. On November 1, WEILAI rebounded again after falling 4% before the session, closing with a gain of 3.63%. However, NIO fell 1.76% during the pre-market trading session of U.S. stocks on November 2.
According to data released by the Ministry of Industry and Information Technology on October 20, the production and sales of new energy vehicles in the first three quarters of 2021 were 2.166 million units and 2.157 million units, respectively, an increase of 1.8 times and 1.9 times year-on-year, respectively; among them, the market penetration rate of new energy passenger cars in September was as high as 19.5%.
If demand for electric vehicles is fine, Tesla may not be greatly affected. Among the 15 best-selling new energy vehicles in China in the first three quarters of 2021 released by the China Passenger Car Federation in mid-October, Tesla has two models on the list, one for Ideal and One for Xiaopeng. Weilai, which did not release a new model this year, was not on the list.
3. The great reshuffle of new car-making forces: Nezha suddenly emerged
NIO's performance in China's "new car-making forces" has been disappointing, with its leading position slipping and rivals XPENG and Li (LI) catching up in terms of deliveries. In October, Xiaopeng delivered 10,138 units, an increase of 233% year-on-year, and Ideal delivered 7,649 Ideal ONE, an increase of 107.2% year-on-year. Xiaopeng has delivered more than 10,000 vehicles for the second consecutive month, and the delivery volume in October is slightly lower than the record of 10,412 vehicles set in September. The ideal October delivery volume is between Xiaopeng and NIO, up from 7,094 deliveries in September.
Barron's magazine used a sentence to comment on "Wei Xiaoli's" performance in October: Xiaopeng was "very good", ideal "average", and Weilai was "shocked". In the past three months, NIO has delivered about 20,200 vehicles, down from the nearly 28,000 delivered by Xiaopeng and the ideal delivery of about 24,200 vehicles.
Not only Xiaopeng, ideals, investors who are accustomed to using "Wei Xiaoli" to represent the new forces of car manufacturing may be aware that Weilai's October delivery volume also lags behind the new energy car-making unicorn Nezha Automobile and Weima Automobile.
Official data shows that Nezha Automobile delivered a total of 8,107 vehicles in October, an increase of 294% year-on-year. Among them, the delivery volume of Nezha U Pro exceeded 5,000 vehicles. This year, Nezha car deliveries continued to climb, breaking records for 9 consecutive months, with 49,534 deliveries from January to October 2021, an increase of 398% year-on-year, and the cumulative delivery volume of Nezha cars reached 75,837.
On October 27, Nezha Automobile just announced the completion of the D1 round of financing of 4 billion yuan, led by 360 Group to invest 2 billion yuan. Some analysts believe that with the help of 360 Group, coupled with strategic cooperation with Internet companies such as Huawei, Horizon, and SenseTime, Nezha may make up for its shortcomings in the Internet.
In September, Nezha squeezed out the ideal, ranking in the top three after Weilai and Xiaopeng in the delivery of new car-making forces, while the top three in the August list were ideal, Xiaopeng and Nezha. In the context of the good delivery volume in October, the cooperation chip with Horizon, and the steady and steady "100,000-level" cost-effective model, Nezha may completely rewrite the ranking of new forces in China's car manufacturing.
Wen | contributors to the Chinese edition of Barron's Magazine, Guo Liqun and Liang Mu
Edit | Kang Juan
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