Author: Zhang Xu
In a row of losses, cash and other doubts, Wei Lai car was successfully listed in the United States. At 10:30 a.m. on September 12, NYSE: NIO was officially listed on the NYSE. The opening price of $6 was 4.15% lower than the issue price of $6.26. After opening, the market went down "cliff style" and plunged into direct diving, which once dropped over 14% to $5.35. Eventually, it rose by 5.43% to $6.60, and its market value was $6 billion 770 million. This time, Wei issued 160 million shares and raised 1 billion US dollars. According to this estimate, the valuation is about $6 billion 400 million. It was about $5.4 billion before investment, and the last round of private equity before listing was in November 2017, with a financing valuation of $5 billion.
Although the ultimate amount of financing shrank from the $1.8 billion in the initial prospectus, the Ultimate Listing is still the third largest Chinese company to go to the U.S. so far this year to raise capital, second only to Achievement and Pingduo. In addition, Ula has become the second U.S. electric vehicle manufacturer to launch an IPO after Tesla, thus becoming the first Chinese new energy automobile company to list in the U.S.
However, if the daily average "burn money" 12 million yuan to calculate the rhythm, this listing can only help to "extend life" for 18 months. If you add a lot of money needed for self built factories, the money will not last long.
In an interview with reporters on September 12, Li Bin, founder of Weilai Automobile, answered why Weilai Automobile was listed for financing and what kind of money the financing would be used. "Now we're going to have higher standards for ourselves, higher requirements and responsibilities for listing, and R&D and customer service are still our main investment directions," he said. As for valuation and future earnings, Li Bin said, "Valuation is determined by the market, but profitability takes some time."
In the industry's view, it's tough for an auto company that delivers just over 1300 vehicles to support a valuation of $6.4 billion. Ulaev's prospectus shows a net loss of 502.6 million yuan (3.33 billion yuan) in the first half of 2008, plus a total loss of 7.59 billion yuan in 2016 and 2017, and the cumulative loss of Ulaev has reached 10.92 billion yuan. Revenue in the first half of this year is still less than $7 million.
Second, overseas stock markets are very rational and focus on performance data. An investment industry insider told the Economic Observer that there are fewer retail investors in the U.S. stock market. They are all trading stocks by institutions, and the short-selling mechanism is relatively perfect. As long as the price is too high, someone will be short. "Once there is a short lead, those short selling organizations will do things. This is why Tesla CEO Elon Musk has chosen to withdraw from the market. One person close to the company said, "The financial data we've got nowadays can't support the current valuation at all. Someone should be short."
A less bright future
The future of Wei is not bright. First of all, Ten years later, Tesla, as the object of much imitation, is still being questioned in the US capital market, constantly trapped in the quagmire of being "short". Secondly, the recent successive domestic electric vehicle spontaneous combustion accidents, but also make the industry on the safety of new car manufacturers have doubts. Plus this year's continued decline in China's auto consumption market, as well as changes in trade between the United States and China, the prevailing market environment is not optimistic.
"After the end of the subsidies, the government may encourage the development of a variety of new energy vehicles, which is almost a lethal blow to Ulara and other new car manufacturers, and its electric vehicles are still sold only on a small scale in restricted cities and other areas, as multinational auto groups continue to sell high-end electric vehicles. Entering China, the more mature technology and quality will bring pressure to Wei. One industry insider said so.
Ultimately the car itself has not been able to handle the performance, just to attract investors with the pattern and prospects. Before this, the industry generally believed that this time came to the US IPO, is its "finding money" hematopoietic helpless. Judging from the performance disclosed in its prospectus, it is also at a loss. Plus its "burn money" model, at least in the short term, there is no expected profit model and path. "Ulai's valuation is too high, there is no money in the private equity market, and its losses are very serious, investors basically give up with Ulai." An investor explained why he was eager to go public.
The launch of Ulaeva's listing plan before it has sold a car has also attracted the industry's doubts. Li Bin, founder of Ulaeva Automobile, as a "capital player," has invested in numerous cases in the past few years. Last year, he unrolled the Mobai bicycle, a commercial company packaged as "China's Four New Inventions," which has now become a black hole in the losses of the American Contingent, and investors have successfully cashed out. This has prompted Chinese auto makers to worry about the entry of such capital players. "The ecology of the entire industry has been destroyed, and there has been no mindset to seriously make products." A car company executive pointed out. After the establishment of Weilai Automobile, Li Bin adopted a high salary (more than 50% of the industry) to dig corners, in addition, Weilai as soon as possible to launch new products, greatly shortened the development and testing time of automotive products. This has become the potential danger of Wei Lai automobile, and it also needs to be very vigilant for its users. "But it did bring some new ideas and new models." The above car executives said.
Ulara's services are now housekeeping, and according to one user, there are even teams of up to a dozen people specializing in them, and Ulara will arrange for luxury brands to replace them if vehicles are repaired. "It's a huge expense that can be achieved with a small number of customers, but if you have too many customers, you can't afford it." In addition, after the listing, Li Bin has said that he will own about a third of the stock as a user fund, this part of the proceeds by the user to determine the direction of use. "There are, of course, some legal procedures to complete, and 6-7 months to go." Li Bin said in September 12th.
The listing comes just 30 days after it first filed an IPO (initial public offering) with the Securities and Exchange Commission (SEC) on August 14.
Multiple delays in delivery
Cao He, president of All-in-Train Investment Management (Beijing) Co., Ltd, told the Economic Observer that Ulaev is based on China's domestic market after all, and its sales prospects are not optimistic. On the one hand, the domestic electric vehicle market has limited capacity and fierce competition. On the other hand, even its benchmarking Tesla did not perform well in the US car market. In addition, the positioning of high-end Ulara Vehicles, after delivering products to its "loyal fans," whether the follow-up can continue to attract ordinary consumers, is also a very challenging proposition.
More importantly, the price and the mileage of the product are the "bruising" of the current products. Nevertheless, no matter how ups and downs the stock market may be in the future, in the view of the industry, automobiles have at least gained room for capital-level operation through listing. "On the one hand, we can cash in cash, and on the other hand, we have reached a bet with investors on the time to market." An industry insider close to Wei Lai automobile said so.
Cao also admitted that although the scale of financing is smaller than planned, but "anxious" to want only as soon as possible listing, so that the previous capital can profit withdrawal. At least on this level, Wei Lai came to realize his immediate desire. "This kind of capital game is" walking wire rope ", after the routine is IPO, quit as soon as possible. Cao crane said so. Optimists, however, believe that the listing is coming or going to come alive, both at the capital level and in the automotive sector.
But for Wei Lai motors, delivery is still a difficult problem. In an interview with the media on September 12, Li Bin said that by August 31, Weilai had produced 2,399 units and delivered 1,602 units. "Delivery is accelerating." However, it is understood that the underestimation of the difficulty of car-making and the excessive pursuit of the progress of car-making, so that Uygur is undergoing a huge test in the car-making, the reason for its traffic difficulties is that it is unable to solve some technical problems related to matching.
At the beginning of the automobile industry, we negotiated and cooperated with famous automobile suppliers all over the world to launch new automobiles by forming parts. For example, when Ulai ES8 was launched, Ulai did sell components from major well-known suppliers, which ensured the performance of its small-scale products. But then, Ulai suddenly pulled out, replaced suppliers with a group of small enterprises, Ulai to get the parts customized by these enterprises, but found that the lack of help from large parts enterprises, they simply can not complete the matching work. Especially in the control unit and sensor of the driver assistance system, the expected function can not be realized. "Part of the replacement is for cost reasons, the other part is Li Bin want to own the voice, jump out of the clamp of large parts suppliers. Because these enterprises grasp the real core technology, in addition, the supplier's process is relatively slow, making it impossible to speed up. One industry insider said so.
The person pointed out that if Ultimate sincere car, should establish their own manufacturing system as soon as possible, stable production. However, Li Bin said that the future will still adopt the OEM model, but will also set up its own factory in Shanghai. In addition, the Economic Observer reporter checked the list of investment institutions found that the Japanese Softbank is not in this list. In April this year, the media reported that Softbank was considering buying $200 million in stock at IPO. On the eve of its listing in September, Softbank did not buy its shares because it was not optimistic about the development of Wei. "Li Bin has told a good story, but how does it continue? There are more and more loopholes in the whole process. The industry insiders said so.
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