On July 24, Nenglian Zhidian released its results for the second quarter and first half of 2024, handing over a brilliant performance answer sheet to the market.
In Q2 this year, Nenglian Zhidian's revenue reached 91.7 million yuan (RMB, the same below), a year-on-year increase of 89%. At the same time, the profitability of Nenglian Zhidian has also been verified, and its net loss and net loss ratio have been significantly reduced, reaching the lowest level in history. The gross profit of the company reached 30.5 million yuan in the current period, a year-on-year increase of 59%.
In this regard, the capital market has given positive feedback. On July 24, in the case of the sluggish U.S. stock market, Nenglian Zhidian rose by more than 26% on the same day, and the volume and price rose all day, and finally closed up 6.14% against the market.
Next, we may wish to further explore its fundamentals and future prospects through the development context of Nenglian Zhidian and the valuable clues released in the financial report.
01
Dismantle a few key information points in the earnings report
The first thing that attracted the author's attention was that in June this year, Nenglian Zhidian achieved a profit on the operating side for the first time in a single month. This is another important milestone for the company after the order side turned positive for the first time in January this year.
The reason why profitability can continue to improve is that there is a trend of shifting the strategic focus of Nenglian Zhidian, that is, from "expanding scale" to "emphasizing profitability". During the reporting period, Nenglian's intelligent electric charging service business achieved a positive network effect, and the proportion of orders with positive NTR reached 70%, once again refreshing the history.
Why is this shift happening?
From the perspective of the industry, in the current market environment, high-quality development is the consensus of the industry and the capital market. At present, the entire industry has crossed the stage of extensive development, and it is more necessary to rely on refined operations to improve quality, so as to expand new development space.
After years of development, the current charging pile operation industry has entered the second half, and the industry has gradually changed from quantity to quality, assets to operation. After the early market cultivation, the user's mind can be formed, and there is no need to seize the user's mind through large-scale marketing and subsidies compared to before. In Q2 this year, the company's marketing expenses were 51.86 million yuan, a year-on-year decrease of 40%.
In addition to making precise strategic changes in line with the development trend of the industry, the adjustment of Nenglian Zhidian at the tactical level is equally important, that is, more attention is paid to internal benefits, and through the construction of operation and management capabilities, Nenglian Zhidian continuously optimizes internal operation processes, improves daily business operation efficiency, and significantly reduces operating costs. According to the financial report, the company's total operating expenses in the second quarter were 124 million yuan, a sharp decrease of 65% year-on-year.
From a long-term perspective, the penetration rate of new energy vehicles continues to increase. According to the forecast of the China Association of Automobile Manufacturers, China's total automobile sales are expected to exceed 31 million units in 2024, an increase of more than 3%; In 2024, the sales volume of new energy vehicles will be 11.5 million units, an increase of about 21% year-on-year. In addition, according to data from the Ministry of Public Security, as of the first half of 2024, the number of new energy vehicles in the country will reach 24.72 million, accounting for only 7.18% of the total number of vehicles.
If deduced according to the rapid growth trend of new energy vehicle sales, the proportion of new energy vehicles in the country will exceed 15% in 2025, and the long-term growth space of the charging service business will also be improved. By occupying the minds of users in advance, coupled with refined operation management and diversified service capabilities, the scale effect continues to be released, and its profitability should be raised to a higher level.
In addition, this financial report also revealed a key message.
In the second quarter of 2024, the company's charging service revenue was 44.77 million yuan, accounting for 48.8%; the revenue of energy solutions was 43.98 million yuan, accounting for 48.0% of the total revenue; The revenue of innovative business was about 2.95 million yuan.
Since the third quarter of last year, Nenglian Zhidian's business classification has changed from the original online, offline and innovative business to three categories: charging services, energy solutions and new business revenue. This also means that the business structure of Nenglian Zhidian has switched from online aggregation business revenue when it was first listed to the two-wheel drive of charging services and solutions. Judging from this quarter's financial report, the proportion of the company's various businesses is more balanced and stable.
If 2023 is a watershed in value upgrading, Nenglian Zhidian is no longer a pure charging service provider, but gradually growing into the role of an energy asset operator. So today's Nenglian Zhidian has become a mature energy asset operator. At present, the two main businesses of Nenglian Zhidian are gradually on the right track, supporting the company's growth, the business structure is also becoming healthy, and the ability to resist risks has been further improved. From this point of view, Nenglian Zhidian is steadily moving towards breakeven according to its own strategic goals, and then making a full profit.
In the current market environment, achieving profitability and maintaining good cash flow are essential to the survival and growth of a business, ensuring that it can remain competitive and sustainable in a highly competitive market. During the reporting period, Nenglian Zhidian's operating cash flow also turned positive for the first time in history, reaching 13.1 million yuan, compared with -56.2 million yuan in the same period last year. Judging from this report card, Nenglian Zhidian has done it, and it has done a good job.
02
The blueprint of the ecosystem is gradually unfolding
In the second half of the year, it is expected to continue to be profitable
The financial report also revealed a blockbuster information: the company has reached an important turning point in high-quality development, and the goal is to continue to make profits in the second half of the year.
The core logic of sustainable profitability not only includes the strategic adjustment mentioned above, but also the deeper reason is that Nenglian Zhidian continues to expand the ecosystem, improve service quality, and build a long-term moat. On further analysis, we need to focus on two key points.
First, focus on energy supply for autonomous driving.
This is a new business area that Nenglian Zhidian has rapidly landed based on technical reserves, which reflects its deep cultivation of charging scenarios and is also an important growth point in the future.
A landmark event is that in July this year, Nenglian Zhidian cooperated with Baidu's high-end intelligent car robot brand Jiyue, and is committed to providing car owners with a "charging everywhere" experience. This means that Nenglian Zhidian will achieve advanced development in terms of convenience and intelligence. According to the concept, you can enjoy the service of "one-click pile finding, one-click charging, and one-click payment" by simply scanning the code, which can greatly improve the efficiency of pile finding; The cooperation itself also reveals the landing ability of Nenglian Zhidian in automatic energy replenishment.
In addition to the brands such as "Wei Xiaoli", Jihu and VOYAH, as well as Internet and Internet of Vehicles platforms such as Tencent Smart Travel and Green Wisdom, Nenglian Zhidian has basically achieved the coverage of domestic mainstream new energy OEMs, and built a huge and complete service ecosystem to provide a strong impetus for future autonomous driving and smart charging.
On the other hand, autonomous driving came earlier and faster than expected.
Since the beginning of this year, unmanned taxis such as Radish Express have accelerated their trial operation, and continued to expand the service coverage area and user scale. As far as Radish Express is concerned, in July, the number of unmanned orders for Radish Express in Wuhan exceeded 20 orders per day, which is comparable to the order volume of traditional taxis.
Also in July, 20 cities including Beijing, Shanghai, and Shenzhen launched pilot applications of intelligent networked vehicles, helping to accelerate intelligent driving from small-scale testing and verification to large-scale implementation.
This shows that the convenience and intelligence of charging services are imperative, and there is an urgent need to achieve transformation.
Second, explore the empowerment of AI technology in the industry.
As mentioned above, there is no doubt about the huge market potential of domestic public charging piles, but problems such as low efficiency of supply and demand matching and insufficient high-quality supply still plague the development of the industry. The existence of these problems not only affects the user's charging experience, but also restricts the further expansion of the market. In particular, with the continuous increase in the penetration rate of new energy vehicles, it is about to reach a critical tipping point, the market demand for charging facilities will further increase, and higher requirements are put forward for the construction and optimization of charging infrastructure.
In this context, AI technology, with its powerful data processing and analysis capabilities, can solve this pain point and "escort" the long-term development of the industry.
It is based on this understanding that Nenglian Zhidian launched the NEF (NAAS Energy Fintech) system last year, which realizes the comprehensive intelligence of charging station site selection, revenue evaluation, operation scheduling and operation and maintenance through artificial intelligence algorithms, and greatly improves operational efficiency.
To put it simply, the application of the NEF system can help charging station operators optimize resource allocation, improve service quality, and enhance user loyalty. This will not only help enhance the value of the company's open platform, but also contribute to the construction of an intelligent, efficient and sustainable energy ecosystem in the context of the integration and interaction of new energy vehicles and power grids. This in-depth service capability not only fills the key gaps in the charging industry chain, but also brings more cooperation opportunities and market expansion potential to the company.
Of course, the advancement of any theory needs to be verified by practical application.
In March this year, Nenglian Zhidian reached a cooperation with Jiurun New Energy, a leading charging operator in central China, to carry out intelligent site selection, hardware supply, construction and operation of charging stations through the NEF system, which can predict the charging power, intelligently match supply and demand, and ensure the return on investment.
This is the first large-scale application of AI models in actual business, and Nenglian Zhidian expects that the project will be completed and delivered in the third quarter of this year, which may bring a new demonstration effect to the industry, and the new energy asset service market will also usher in growth dividends.
In addition, in July this year, the "Zhejiang Province Charging Infrastructure Governance and Supervision Service Platform" participated in the construction of Nenglian Zhidian was officially launched. Relying on real-time model guidance, the platform makes the layout of charging facilities more scientific and reasonable, and the operation efficiency is higher, which is an important upgrade of the existing charging infrastructure and an active exploration of the future development of the industry.
03
epilogue
In June, the profit of the operating side in a single month, the continuous improvement of gross profit margin, and the revenue of charging services were higher than the average growth rate of the industry, which are the concrete embodiment of the gradual verification of the business model and strategic layout of Nenglian Zhidian.
As the famous economist Joseph · Schumpeter pointed out: "Economic development does not depend on the accumulation of resources, but on the accumulation of innovation." "Through continuous innovation and optimization, Nenglian Zhidian cooperates with major brands to continuously expand customer coverage, improve the convenience of charging services, and rely on the empowerment of AI technology to solve the pain points of the industry, taking into account the dual improvement of profitability and business quality.
Therefore, we have reason to believe that Nenglian Zhidian may continue to cash in the new trend, and with the increase in the number and penetration rate of new energy vehicles, the market's awareness of the entire charging service industry will gradually deepen, and the understanding of the investment value of Nenglian Zhidian will be more profound.