Tiger Securities: can Weilai Q2 give the answer against the sky? Sales may not be the key

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 Tiger Securities: can Weilai Q2 give the answer against the sky? Sales may not be the key


Weilai delivered 3838 vehicles in the first quarter, including 3643 ES6 and 195 es8. Revenue was 1.37 billion yuan, down 51.8% month on month and 15.9% year on year, exceeding analysts expectation of 1.287 billion yuan.

Weilais net loss in the first quarter was 1.691 billion yuan, a year-on-year decrease. Analysts expected a loss of 2.024 billion yuan, better than analysts expectations. The companys cash equivalent, restricted cash and short-term investment is RMB 2397.4 million.

In addition, Weilai also significantly raised the vehicle delivery volume and revenue forecast in the second quarter. Weilai predicted that the vehicle delivery volume in the second quarter would reach 9500 and 10000 vehicles, and the total revenue was expected to be between 3.368 billion yuan and 3.534 billion yuan, which was significantly higher than analysts expectations.

On the Q2 financial report in 2020, there are several highlights

Q2 delivery exceeded expectations, how about Q3?

According to known market data, Weilai delivered 10331 vehicles in the three months up to June 2020, exceeding the previous vehicle delivery guidelines (9500 and 10000 vehicles) for the second quarter.

Although the number is good, it is also expected. After all, since March this year, in order to promote the development of the new energy vehicle industry, the state has promulgated a number of policies, such as extending the policy of new energy vehicle purchase subsidy and exemption from vehicle purchase tax due at the end of the year for two years. These policies are conducive to promoting the sales of new energy vehicles. In fact, not only Weilai, but also the whole sales volume of new energy vehicles rebounded significantly in March. The recovery of sales volume of Weilai from April to June was basically expected.

However, after the release of the June delivery report, Weilais stock has risen sharply and the market has already been priced. Therefore, one of the focuses of this quarters financial report is Weilais guidance on Q3 delivery volume. From the current situation, the favorable policy side is sustainable. In addition, ec6 has been officially scheduled on July 24. It can be predicted that the quantity of Weilai Dading should not be bad, which restricts Weilai at present The main problem is capacity.

At present, the factory cooperated by Weilai was set up according to the single shift of 50000 yuan and the double shift of 100000 yuan. Now, Weilai has a single class, with an annual output of 50000 yuan, which means that it has reached the peak of 4000 per month. After the launch of ec6, Weilais new car will definitely experience a ramp up in production capacity, that is to say, if the production is not expanded, the delivery in the third quarter is likely to be very poor.

According to 5000 vehicles a month, the delivery of Weilai can reach 12000-15000, but I dont know when the capacity of Weilai Q3 will be increased. One of the focuses of this quarters financial report is Weilais guidance on Q3 delivery.

After knowing the car delivery data in the second quarter, the revenue data can be roughly estimated. If the average selling price is calculated at 320000, the automobile sales revenue of Weilai will be about 3.3 billion, and if it is calculated according to 390000, the automobile sales revenue of Weilai will be about 4 billion. The possibility of exceeding expectations is quite high.

In addition to expectations, another major concern about the financial report of Weilai is the performance of gross profit rate. As people familiar with Weilai automobile know, the speed of burning money of Weilai can be regarded as excellent. In recent years, Weilai has gone further and further on the road of loss. Li Bin once made a bold speech in the 2019q4 teleconference

The gross profit rate became positive in the second quarter and reached double digits at the end of the year

Seeing that the second quarter financial report is coming, can Li Bin fulfill his promise? I think that the probability of turning the gross profit rate to positive can be realized. The revenue and cost of main business are the main factors affecting the gross profit margin. In order to achieve the conversion of gross profit, it is necessary to increase the sales volume or reduce the operating cost. After the sales volume comes up, there will be more cars to share the cost. In addition, Weilai has more voice and bargaining power with its supply chain partners, so as to reduce costs,

How about ec6?

According to the Convention, every quarter we have to talk about whether Weilai has enough money to spend. However, as Weilai and Hefei Construction Investment Holding (Group) Co., Ltd. have signed the final agreement on investment in Weilai China, the problem of funds is not too much to worry about this quarter at least. Since 2020, Weilai has accumulated more than 10 billion yuan in financing, and obtained 10.4 billion credit from six major banks in early July. Combined with the recent strong trend of its stock price, we can see that Weilai not only solved the potential cash flow problem, but also regained the market confidence.

After solving the financing problem, Weilais main focus is not only on delivery and gross profit rate, but also on the scheduled quantity of new ec6. On July 24, at the 23rd Chengdu auto show, Weilais smart electric car racing suvec6 was officially launched. The price of the new car before subsidy was 368000-526000 yuan. The first batch of vehicles will be delivered in late September.

More than once, Li Bin mentioned in public that ec6s opponent was Teslas model y. Tesla has slashed the price of model y in the United States. According to the official website of the United States, the current price of the long-term version of the model y has been lowered to $49990 (RMB 349800). However, the domestic official website, the price of modely has not changed for the time being. The price of the long-term version of modely is 488000 yuan. If we look at the price alone, the price of Weilai ec6 before subsidy of 368000-526000 has a certain advantage over the price range of 488000-535000 of Tesla Model y, but we dont know what the scheduled quantity is?

How is baas going?

At the end of 2019, Li Bin proposed the concept of baas (battery as a service). That is to say, taking advantage of the features of Weilai model and the power stations all over the country to connect all the electric parts of the vehicle into a battery pool, which can quickly change the power, and flexibly upgrade the battery packs with different capacities according to their own needs. At the same time, you can only buy the frame when you buy the car, and then you can rent the battery to buy the service later. In short, it is the separation of vehicle and electricity, and the battery can be charged, replaced and upgraded.

One of the reasons why baas is proposed is that it can solve the problem of electric vehicle endurance and battery consumption. Second, it can reduce the price of Weilai vehicle and make it more competitive in the market. In addition, baas can undertake more electric vehicle exchange services in the future, contributing revenue to Weilai.

In Li Bins words, battery asset management is the biggest business. Even if a user spends 10000 yuan a year to rent batteries, assuming that more than 200 million cars in China are electric vehicles, the business of renting photovoltaic cells is 2 trillion yuan. Only this business is really big business.

However, in the past one or two years, due to policy and other reasons, after Weilai adopted the battery leasing scheme, it has been carrying its own capital. For better development of baas (better development, at the end of July, Weilai announced the establishment of a battery asset management company. It is said that Ningde era, one of the domestic batteries, also intends to participate in it. Li Bin did not give a detailed explanation, only said that we are a listed company, subject to the announcement.. There is no doubt that baas is definitely one of the highlights of Weilais financial report.

Analysts expect the following

The analysts predict that the revenue in the second quarter of 2020 will be 3.493 billion yuan, and the adjusted EPS will be -1.697 billion yuan. In the third quarter of 20, the revenue will be 3.88 billion yuan.

Tiger securities investment research team believes that Q2 will be more likely to exceed expectations after exceeding the expected delivery. The focus of this financial report is the expectation of Q3, the predetermined quantity of ec6, the production capacity of Weilai and the progress of baas. Do you like the financial report of Weilai? This article does not constitute and should not be regarded as any agreement, offer, offer invitation, opinion or suggestion for purchasing securities or other financial products. Nothing in this article constitutes an investment, legal, accounting or tax opinion of tiger securities, a statement of whether an investment or strategy is appropriate for your personal situation, or any other recommendation for you. Source: editor in charge of mass news: Chen Tiqiang_ NB6485

Tiger securities investment research team believes that after the delivery beyond expectations, Q2 is likely to exceed expectations. The focus of this financial report is on Q3, ec6, Weilais capacity and baas progress. Are you optimistic about Weilais financial report?

This document does not constitute and shall not be deemed to constitute any agreement, offer, invitation to offer, opinion or proposal to purchase securities or other financial products. Nothing in this article constitutes an investment, legal, accounting or tax opinion of tiger securities, a statement of whether an investment or strategy is appropriate for your personal situation, or any other recommendation for you.