[Text/Caiquan Society & Dao Ge said car Ma Jianyu] Daniel Zhang, CEO of Nezha Automobile, once said that there are tens of billions of funds lying on the account, and there is no hurry to go public. But on the road to IPO, Nezha Automobile has actually tried, and now there is a clear "hope".
On June 26, Nezha Automobile's parent company, Hezhong New Energy Automobile Co., Ltd., submitted a listing application to the Hong Kong Stock Exchange, and if the IPO is successful, Nezha Automobile will become the fifth new power car company listed in Hong Kong after Weilai, Xiaopeng, Li and Leap.
Interestingly, this is also the same as the top five domestic car-making forces in terms of sales for a certain period of time. It is worth noting that, judging from the relevant financial data of Nezha Automobile disclosed in the prospectus, Nezha Automobile is still losing money and its losses have been expanding in the past three years. However, from the changes in revenue and gross profit margin, we can still see the progress of Nezha Automobile.
Nowadays, it is a serious period of involution in the automotive industry, and at the same time, the opportunity to go overseas is also in front of us, for Nezha Automobile, it may also need to open new financing channels, maintain not falling behind in the knockout round, and seize the opportunity in front of the opportunity.
There have been attempts, can Nezha succeed this time?
As we all know, one of the key links in the development of new car-making forces in the early stage is "IPO", which not only opens up financing channels, but also significantly improves brand awareness and credibility.
However, compared with "Wei Xiaoli" and other new car-making forces that have already successfully landed, the process of Nezha Automobile's IPO is much slower, of course, this does not mean that Nezha Automobile is really "not in a hurry to go public".
As early as July 2020, Nezha Automobile announced the launch of the listing application work on the Science and Technology Innovation Board, and planned to complete the listing in 2021, but in the end, Nezha Automobile did not achieve its wish. Subsequently, in 2022 and 2023, news of Nezha Automobile's IPO was reported continuously, but the rumors were finally refuted by Nezha Automobile.
It is worth noting that since the beginning of this year, Zhou Hongyi, an investor of Nezha Automobile and founder of 360 Group, has frequently interacted with Daniel Zhang, which has significantly enhanced the popularity of Nezha Automobile, which is also considered to be building momentum for Nezha Automobile's IPO. Now, Nezha Automobile has finally submitted its application to the Hong Kong Stock Exchange, one step closer to a successful IPO. So will Nezha Auto succeed this time?
There is progress, but there may be a real shortage of money
With the disclosure of this prospectus, some of Nezha Automobile's financial data have finally been made public. Like other new car-making forces, Nezha Automobile is still in a loss-making state, and the loss continues to expand, but the performance of revenue and gross profit margin is improving.
According to the prospectus, Nezha Automobile's revenue in 2021, 2022, and 2023 will be 5.087 billion yuan, 13.05 billion yuan, and 13.55 billion yuan respectively; gross losses were 1.748 billion yuan, 2.939 billion yuan and 2.014 billion yuan respectively; The gross loss ratios were 34.4%, 22.5% and 14.9% respectively.
It is worth mentioning that as of December 31, 2023, the cash and cash equivalents held by the parent company of Nezha Automobile are 2.837 billion yuan, which may be a little short of money compared with several new car-making forces with cash reserves of tens of billions at every turn.
In the first five months of this year, Nezha's sales fell to 43,600 units, with an average monthly sales volume of less than 10,000 units, only 14.5% of the annual sales target of 300,000 units.
In the context of fierce competition in the market, Nezha Automobile obviously needs the support of funds, and to break the situation, this IPO may be an opportunity.
Aiming at overseas markets, what is the main purpose of fundraising?
In the use of funds in Nezha Automobile's IPO application, it is first mentioned that it will be used for overseas market expansion. Nezha Automobile mentioned in its prospectus that it will further invest in the Southeast Asian market and rapidly expand potential markets such as Latin America, the Middle East and Africa.
At the same time, Nezha Automobile plans to enhance its global operation capabilities, including setting up more subsidiaries or branches in key overseas markets and recruiting more international professionals. In addition, Nezha Automobile will continue to cooperate with overseas dealers to set up more overseas stores, expand its sales and service network, and develop its overseas sales and service team.
It is understood that since 2022, Nezha Automobile has started overseas expansion with Thailand as its first destination. As of December 31, 2023, Nezha Auto has cooperated with about 80 overseas dealers in 23 countries and regions. At present, Hezhong New Energy's factories in Thailand and Indonesia have been put into operation, and a factory in Malaysia is also being planned.
According to the data, in 2023, Nezha Automobile will export more than 17,000 units, accounting for 13.7% of the total sales volume and contributing 12% of the sales revenue. Daniel Zhang also mentioned in January this year that after two years of development, the overseas market has the foundation to accelerate in 2024. In the first five months of this year, Nezha Automobile exported 16,458 new energy vehicles, ranking first in the export volume of new power car companies and fifth in the export volume of new energy vehicles of car companies.
It can be seen that going to sea has become a strategy for Nezha Automobile to break through, and it has been effective. If the IPO is successful, it will also give Nezha Automobile a boost.