IPO of United Automobile, is Nezha Automobile, which has not yet been prepared by the "Hot Wheel", worth looking forward to?

Wen | Ning Cheng lacked

Source| Bowang Finance

In 2022, the new energy vehicle track continues to be hot, and Nezha Automobile's parent company, United New Energy Vehicles, which is in the "second echelon", has also spread IPO news.

Recently, United New Energy Automobile Co., Ltd. completed a new round of financing of more than 2 billion yuan, with a post-investment valuation of more than 25 billion yuan. Major investment institutions include CRRC Fund, a subsidiary of CRRC Group, and Shenzhen Venture Capital, a state-owned subsidiary of Shenzhen Municipality.

Subsequently, some media sources said that United Automobile has officially launched the Hong Kong stock listing plan, planning to raise 1 billion US dollars, and the sponsors are CITIC, CICC and Morgan Stanley. As of now, United Auto has not responded to the IPO rumors, but as early as July 23, 2020, United Auto officially said that it plans to IPO on the Science and Technology Innovation Board in 2021.

Since 2018, the "first echelon" of Weilai Automobile, Xiaopeng Automobile, and Ideal Automobile have successively landed on the US stock market, and the market value has exceeded 10 billion US dollars. As of press time, WEILAI has a market value of 33.291 billion US dollars, Xiaopeng Automobile has a market value of 29.992 billion US dollars, and Ideal Automobile has 28.806 billion US dollars; waist car companies WM Motors and Zero Run Automobile have previously reported the news of planned IPOs.

So, can United Automobile, which has been picked up by the sinking market, really counterattack? How far can it go in the capital markets?

01 Nezha "Up"

According to public information, Hezhong New Energy Automobile Co., Ltd. was established in 2014, obtained the production qualification of new pure electric vehicles in April 2017, and released its automobile brand Nezha Automobile in 2018.

Subsequently, Nezha Automobile launched Nezha N01, Nezha V and other models, with the slogan of "building cars for the people". Among them, Nezha V is the "star model" of Nezha Automobile. Priced at about 60,000-80,000 yuan, it is a small entry-level pure electric SUV, and sales have been in the lead. According to the data of the Association, the sales volume of Nezha V in 2021 was 49,646 vehicles, more than 70% of the overall sales.

And Nezha Car is even more in the posture of "dark horse" to make "Wei Xiaoli" feel in crisis. In 2021, Nezha Automobile delivered a total of 69,174 vehicles throughout the year, an increase of 361.7% year-on-year, and repeatedly broke into the top three single-month sales of new car-making forces. In January this year, Nezha automobile delivery volume was 11,009 units, an increase of 402% year-on-year, once again entering the top three new car sales.

The eye-catching performance has also won the favor of capital. According to public information, since its inception, Nezha Automobile has completed 9 rounds of financing before and after, with a total financing of more than 15 billion yuan, and the investors include well-known investment institutions such as CATL, 360, BAIC Production and Investment, and Huading Capital.

Among them, the blessing of the Ningde era and 360 has also given the outside world higher expectations for Nezha Automobile.

As a leading enterprise of china's power battery, CATL has also increased investment in the upstream and downstream of the new energy automobile industry chain in the past two years, and Nezha Automobile is the first time that Ningde Era has publicly participated in the financing of new car-making forces, which is enough to see the importance of Nezha Automobile in the Ningde Era.

At present, in addition to "escorting" Nezha Automobile in the field of supply chain guarantee, CATL will also jointly develop innovative and integrated technologies for new energy vehicles with Nezha Automobile.

The 360 provides all-round empowerment for Nezha Automobile, to a certain extent, it strengthens the shortcomings of the lack of "Internet genes" of Nezha Automobile, and integrates and reorganizes with the car DNA in terms of intelligent interconnection.

In addition to the 360 and Cataline Era, Nezha Automobile has cooperated with Huawei, SenseTime, Horizon and other companies to complete the endorsement of core technologies such as intelligent driving computing platform, lidar technology and automatic driving chip.

Nezha's car is speeding forward.

02 The B side of the Nezha car

But what everyone expected was that Nezha Automobile did not have the "Internet aura" like "Wei Xiaoli", and the chairman of Nezha Automobile, Fang Yunzhou, and the president Daniel Zhang were from traditional car companies, and the company's main team was mainly from traditional automobile companies.

The reason why it can "rise" in a short period of time is inseparable from its "sinking strategy".

On the new energy vehicle track, the new force of head car manufacturing,"Wei Xiaoli", has long gained a foothold in the high-end market. "Wei Xiaoli" is positioned as an intelligent electric vehicle, emphasizing the sense of science and technology and experience, and the price of the main products is more than 200,000 yuan.

In order to avoid its sharp edge, Nezha Automobile "surrounds the city from the countryside" and focuses on the low-end market below 100,000 yuan. The three models currently on sale of Nezha Automobile: Nezha V, Nezha U and Nezha N01, the guided price range after subsidies is 62,900-120,800 yuan, 104,800-17.98 million yuan and 66,800-13.98 million yuan, respectively.

It just so happens that as the consumption level tends to be younger, most of the young consumers pour into this track, the 100,000-yuan model segment is booming, and Nezha Automobile has also killed a blood road from a red sea in the new energy market.

Daniel Zhang, ceo of Nezha Automobile, also has a clear understanding of this, he once mentioned: "There is no point in briefly surpassing, Nezha's user group is more popular, according to this logic, only 3 times the ideal can be said to be stronger than him." ”

Moreover, there are many sequelae of "low-cost running volume", and the gross profit margin of Nezha Automobile has always been at a low level in the industry.

Insiders revealed that Nezha's gross profit margin is about 5%. The gross profit margin of the head camp's "Wei Xiaoli" in the three quarterly reports reached 20.3%, 11.6%, and 18.2%, respectively, and BYD 12.9%.

At the same time, Nezha Automobile has also fallen into the quagmire of high losses. According to the performance of Nezha Automobile revealed in the financial report of 360 Group, a shareholder of United Automobile, Nezha Automobile achieved revenue of 1.297 billion yuan and a net loss of 1.321 billion yuan in 2020, and achieved revenue of 1.632 billion yuan and a net loss of 693 million yuan in the first half of 2021.

In addition, the market of Nezha Automobile is mainly on the B-end rather than the C-end, and public data shows that from 2018 to 2019, Nezha Automobile signed 22,800 vehicle orders for corporate customers and individual customers, respectively, and 31,380 units.

This is inseparable from the personal experience of Nezha CEO Daniel Zhang, Daniel Zhang was responsible for channels, marketing and sales in BEIQI Foton, Chery, BAIC BJEV and other businesses, and BAIC's B-end play gave Daniel Zhang great inspiration.

Therefore, from the beginning, Nezha Automobile has followed the B-end play method that BAIC BJEV is best at, mainly for the public market, and most of its products are sold to large customers such as shared travel, online car-hailing, enterprises and institutions.

And this style of play did work in a short period of time. In 2020, Nezha Automobile reached cooperation with online ride-hailing platforms such as Xiaolinggou Travel, Chengdu Dige Travel, and 365 Ride-hailing, and appeared in more than ten provinces such as Shanghai, Zhejiang, Guangxi, Jiangxi, Jiangsu, Hubei, Shanxi and 22 government procurement lists such as the national tax system.

However, the real problem is that the total amount of the B-end travel market has become saturated, and with the rise of the C-end private consumption market, it is imperative for Nezha Automobile to expand from the B-end to the C-end.

But this transformation is not so easy, long-term occupation of the B-end sinking market Nezha car has always been known for "cost performance", but C-end users are more inclined to intelligence, personalization, in the major social networking sites, Nezha car is often complained by consumers "the appearance is similar to the fuel car", "lack of sense of technology", "no brand story", in the C-end consumer market lack of distinct IP characteristics.

Nowadays, loss and transformation have become the two major difficulties in the development of Nezha Automobile, and if you want to jump out of these two strange circles, Nezha Automobile needs more funds to continue to invest to create more high-end intelligent cars, and listing has become an inevitable choice for Nezha Automobile.

03 Where is Nezha's Hot Wheel?

In fact, in the new energy track, the position of Nezha Automobile is slightly awkward.

Although the sales volume rank has entered the top three, compared with the "Wei Xiaoli" of the first echelon, Nezha Automobile is not as good as the head enterprise in terms of brand volume, profitability and market recognition.

In the camp of new energy vehicle companies in the waist of "waiting to be fed", Nezha Automobile has not received enough financial support. For example, the total financing amount of Nezha Automobile is about 15 billion yuan, while the D round of financing of WM Automobile in 2020 alone will reach 10 billion yuan.

Moreover, the "sinking road" of Nezha car is no longer easy to walk.

On the one hand, with the decline of subsidies, from 2022, some of the models currently on sale of Nezha Automobile will adjust their prices, rising by about 2,000-5,000 yuan.

Among them, Nezha V standard endurance version upgrade, standard endurance entertainment version upgrade type and witch version are all raised by 2,000 yuan, and the adjusted price is 62,900 yuan, 65,900 yuan, 72,900 yuan and 74,900 yuan, respectively, in view of the fact that consumers are more sensitive to price at this stage, the sales forecast of Nezha Automobile will be damaged.

On the other hand, the number of players entering the sinking market is also increasing. The four giants such as Great Wall, Chang'an, Geely and BYD are also trying to "share a piece of the pie" in the low-line market, and the future market competition will undoubtedly become more intense.

In addition, the quality problem of the car is also a sharp sword hanging over the head of Nezha Car. On the major complaint websites, Nezha car is mostly complained by car owners, mainly there are false mileage standards, brake noise, brake failure, rear wheel positioning fracture, car left and right swaying and other issues, not to mention, the supply chain crisis in the environment, the haze of chip shortage will continue.

In this case, the author believes that Nezha car has three paths to go. The first is to improve the intelligent content to the high-end market; the second is to mention the layout of the card slot in overseas markets; the third is to improve the quality of the car and build a brand culture.

At present, Nezha Automobile plans to launch three models by 2025, and overseas exports are also within its plan, aiming to reach a scale of 100,000-200,000 units in 2025, while the sales target in China will exceed 500,000 units.

Nezha Automobile also plans to officially launch Nezha S this year and enter the 200,000 yuan level market, which is also the first time that Nezha Automobile has competed head-on with the main head car-making forces.

Car manufacturing is a heavy asset industry, large capital investment, long return cycle, Nezha Automobile IPO is to increase the chips to survive, but the lack of intelligence, low quality, brand positioning is difficult to break through, still plague Nezha Automobile.