Teslas market value gods new forces of Chinas car making have also been fired to heaven, and the test has just begun

 Teslas market value gods new forces of Chinas car making have also been fired to heaven, and the test has just begun

My first venture was Youshi company in August 2004; my second venture was Xiaopeng automobile in August 2014. In 2020, he Xiaopeng, chairman and CEO of Xiaopeng automobile, ushered in the third lucky month. On August 27, Xiaopeng automobile was officially listed on the New York Stock Exchange with xpev as the security code.

This is the third new auto manufacturing force to go to the US IPO. Before that, NiO and Li successively landed on the NYSE and NASDAQ.

Photo source: provided by the enterprise

On the day before Xiaopeng auto landed on NYSE, the new forces of Chinas car making began to soar in the United States. The U.S. stock market closed on August 26 (local time). Less than a month after its listing, the stock price of ideal automobile rose 28.25% to 23.38 US dollars per share, with a market value of 19.7 billion US dollars. Both the stock price and the market value reached the highest since its listing. Weilai shares rose 14.57% to $20.44 per share, with the market value of the company reaching $24.21 billion, a new record. In the first trading day, Xiaopeng automobile closed at $21.22 per share, 41.47% higher than the issue price, and its market value was close to $15 billion.

All kinds of signs show that the recognition degree of the new domestic automobile manufacturing forces is increasing in the US capital market.

The U.S. capital markets favor for new domestic car makers is largely due to Teslas outstanding performance. Lu Yuan, an auto industry analyst, told the daily economic news that Teslas performance and share price have risen against the trend since this year. The continuous promotion of domestic production makes Tesla embark on the fast track of development, and at the same time, it also boosts the strong performance of the new energy vehicle plate in the US stock market.

As of September 1, the market value of Tesla was $442.7 billion. The soaring share price of Tesla has also boosted the enthusiasm of the U.S. stock market for the new force of domestic car making.

Teslas market value has repeatedly reached new highs, which has also ignited the A-share related industrial chain. At the opening of the trading on August 27, A-share new energy vehicles and Tesla concept stocks raised the trading limit. More than 20 stocks, including Yunyi electric (300304, SZ), Shuanglin (300100, SZ), Pengling (300375, SZ), Huguang (605333, SH), Shuguang (600303, SH), etc., rose or rose by more than 10%. In addition, the semi annual reports of 51 Tesla concept listed companies revealed that 22 companies achieved positive growth in net profit.

Photo source: screenshot of Yunyi electric stock price

At present, the domestic new energy vehicle market is still driven by policies. Even Tesla has been able to build factories in China with the dividends provided by relevant policies, so as to achieve sales and revenue growth. Zhang Xin, chief auto analyst of Guotai Junan, believes that the successful listing of new automobile making forces such as Weilai, Xiaopeng and ideal automobile in the US stock market does not represent its future success. Its follow-up development has to be tested by many complex factors. How long the capital markets pursuit attitude can last is still unknown.

From breaking to soaring

The situation of the new forces of car making in the US stock market has also experienced a roller coaster change.

In September 2018, Weilai automobile went to the US stock market. At that time, the U.S. capital market was not friendly to the new forces of car making, and even Teslas share price was in a low state, and its market value had shrunk by 10 billion US dollars compared with before. Hankon Samuelson, CEO and President of Volvo car group, said bluntly that the listing conditions at that time were not the best for investors. Therefore, Volvo finally chose to postpone the IPO.

On the first day of listing, Weilai Autos stock price was broken, falling to $5.6. Analysts at that time believed that Weilai auto stock was not a safe investment, and gave a target stock price of $4.2.

For a long time since then, the attitude of the U.S. capital market to the new forces of car making did not change much. Weilai automobile not only triggered the circuit breaker mechanism because of the rapid decline of its stock price, but even fell to the red line of delisting. Under such circumstances, Li Bin, the founder, chairman and CEO of Weilai automobile, has made the worst plan for the internal executives: if you want to change your boss, you should sell cars and cars, and if you should do service, you should do good service.

He Xiaopeng, who is also the leader of the new automobile manufacturing force, has similar feelings to Li Bin about the rapid transformation of capital sentiment: three months ago, the intelligent automobile industry was very, very difficult. It was not until the second quarter of this year that the capital market changed its attitude towards the new forces of car making.

In the opening trading stage, the stock prices of ideal automobile and Xiaopeng automobile both rose sharply after the opening. Among them, the stock price of ideal automobile once rose by more than 50% on the first day of trading, and its market value reached 14.8 billion US dollars, surpassing that of Weilai automobile on that day; the opening price of Xiaopeng automobile reached 23.1 US dollars, which was more than 55% higher than the issuance price, and the highest intraday increase was even more than 60%. By the end of the day, the market value of Xiaopeng automobile reached 14.96 billion US dollars.

Photo source: Sina Weibo

With the stock price soaring, the new force of car making has attracted more and more individual investors. According to CNBC, more than half of the users of Robinhood, an online securities trading platform, have opened investment accounts, and these investors are generally under the age of 31. In addition, domestic stock trading platform also ushered in unprecedented scale of individual investors.

Now the owners of Weilai, ideality and Xiaopeng automobile have changed their daily chat content from talking about products to talking about stock prices. A car company executives sigh. A Weilai car owner further revealed, before, some Weilai owners asked how to open an account to buy Weilai shares in the group, and then there was a special group of Weilai car owners. They were discussing US stocks every day. There are also some people who first hold the stock of Weilai automobile, and then buy the products of Weilai automobile

Teslas halo effect

It is generally believed in the industry that Teslas halo effect plays an important role in the continuous pursuit of Weilai automobile, ideal automobile and Xiaopeng automobile in the capital market.

When it went public in June 2010, Teslas offering price was only $17. In 10 years, Teslas share price has inflated 130 times.

Data show that Teslas share price has risen by about 415% this year, more than 530% from the March low of $350.51 and 1150% from the low of $176.99 in June last year. At present, the market value of Tesla has surpassed Johnson & Johnson and Wal Mart, the worlds largest retailer, and has become the tenth highest listed company in the United States.

Photo source: by reporter Liu Ling

From the industry point of view, any new category or new species must have a leader. Whether or not this leader is present will determine whether the new category can succeed In an interview with daily economic news, chief data officer of Weima automobile, Mei Songlin, believed that Tesla is the leader and innovator of new forces in car making. The new auto makers are benefiting from Teslas success and are working with Tesla to make the market base bigger.

Both China and the United States have a need to attract global capital. Driven by Tesla, the new auto makers are generally recognized by the U.S. capital market. At this time, listing can give new auto makers a higher valuation. Cui Dongshu, Secretary General of the passenger car market information association, said.

According to industry analysis, another important factor for Chinas new car making force to win the favor of US stock investors is delivery volume. Although the epidemic led to a decline of nearly a third of the domestic new energy vehicle sales in the first half of the year, the sales of the new forces of the head car manufacturing industry are rapidly picking up.

According to the data, from January to July this year, the cumulative sales volume of Weilai automobile, Xiaopeng automobile and ideal automobile were 17700, 8009 and 12200 respectively. Among them, the sales volume of Weilai automobile increased 111.3% year on year in July, the total insurance volume of Xiaopeng automobile increased by 130% month on month in July, and the sales volume of ideal automobile in July increased by 33% month on month.

In the field of new energy vehicles, the layout of international brands is relatively lagging behind, forming a huge blue ocean characteristic of Chinas automobile market. From the aspect of supporting products, such as electric vehicles, electric vehicles, etc., they have relatively long development time. At the same time, compared with the conservative patent technology of hybrid electric vehicle, some electric vehicle technology patents are relatively open, and there are more opportunities for the coordinated development of independent brand electric vehicles. Therefore, the new force of car making has a good internal and external technology and resource base to develop high-end electric vehicles. Cui Dongshu said.

Share prices of new energy industry chain are generally benefited

In fact, the automobile industry chain is extremely complex, which affects the whole body. At the same time, the prices of upstream and downstream industrial chain enterprises also showed high enthusiasm.

With the further acceleration of Teslas localization, more and more upstream and downstream enterprises participate in the process, continuously forming new scale, reducing costs, boosting the rise of domestic new energy vehicle manufacturing technology level and the landing of automatic driving technology. It is based on this prediction that a wave of listed companies related to Tesla concept, such as Ningde times (300750, SZ), Yunyi electric, Shuanglin, Pengling, Huguang, Shuguang, etc., have attracted much attention from capital.

Photo source: Guoxin Securities

The positive development of Tesla is not only good for parts suppliers, but also good for the long-term development of all electric vehicle enterprises. In the short term, Teslas domestic production and price reduction have intensified the market competition, and some weak enterprises may be eliminated. But in the long run, domestic Tesla will improve the domestic electric vehicle industry chain, and all participants will benefit from it. Xie Tian, managing director and global partner of Boston Consulting, told reporters.

Just like apple mobile phone localization, it established and improved the domestic smartphone industry chain, which led to the rise of domestic mobile phone manufacturers such as oppo and vivo. In Xie Tians view, the acceleration of Teslas localization process will benefit more domestic upstream and downstream parts suppliers.

(Teslas domestic process is accelerated) it will have a good driving effect on the suppliers of electric drive, electronic control, automatic driving related parts enterprises and other types of suppliers, and will play a good role in promoting the entire intelligent automobile industry chain. Xie Tian believes that although Teslas core technologies such as chips, software, algorithms and other products still rely on imports, the cameras, sensors, controllers and other parts used by Tesla have the opportunity to be domestically produced.

Prepared by Li Shuo

Tesla concept itself is a main circuit of relevant plates, and the track opportunity can be comparable to the previous 5g, semiconductor, etc. with the advent of the second half of the automobile peak season, the overall Tesla concept stock market will continue to perform better. Deng Xue, deputy director of Tianfeng Securities Research Institute and chief analyst of automobile industry, said.

Capital success u2260 car building success

It is worth noting that although the stock price of the new force of car making continues to strengthen recently, the outside world has not stopped questioning it. On the one hand, it is doubtful that the new force in the capital market will not be hot for a long time. On the other hand, it is questioned that a new bubble may be behind its soaring share price. In response, Cao Guangping, an independent researcher of new energy vehicle, said: judging from the sales level, there is a certain bubble in the valuation of these new listed companies.

Li Bin is obviously aware of this problem. The market value and brand influence of new forces may be comparable with traditional enterprises, which means that everyone has a good vision for the future. However, from the perspective of market share, new force car manufacturing enterprises still have a long way to go. Even though Tesla has surpassed Toyota in market value, its sales volume is only 4% of that of Toyota. Li Bin said.

Li Bin, founder, chairman and CEO of Weilai automobile

Photo source: provided by the enterprise

In fact, there has been a lot of controversy about Tesla. After the delivery of electric car models in 2012, Tesla was on the verge of bankruptcy for a time. In addition to the negative factors such as the resignation of senior executives, production capacity crisis and profit decline, Tesla was almost bought by Google and apple.

In the life and death line hovering Tesla, began to be looked down by bears, and sold its shares. It was not until the end of 2018 that Tesla gradually walked out of the capacity hell to achieve sustainable profits and had the capital to live. However, its share price has only been on the fast track of rising since 2019.

The successful listing of ideal automobile, a new force of car making, relies more on the recovery of the current capital market, and it is still uncertain how it will develop thereafter. Zhang Xin said.

Some analysts believe that the new force of car making needs to be calm after listing. The success of the capital market does not mean its ultimate success. At present, the bubble in the valuation of the new force of the new car needs sufficient technology to support it, and more importantly than the soaring share price, the current capital boom has brought food and grass and ammunition to the new force of car manufacturing in a timely manner.

It is understood that ideal automobile, after IPO, has advanced the original L4 level automatic driving research and development plan in 2021 to this year; Weilai automobile also announced on August 27 that it plans to issue 75 million additional American Depository shares (ads), and the amount raised will be mainly used for the research and development of automatic driving technology and new products and technologies; Xiaopeng automobile said that it expected to issue earnings from the stock issue 50% is used in the research and development of electric vehicles and intelligent vehicles.

Photo source: Photo Gallery

Soochow securities analyzed in the research report that, from the perspective of Teslas development path, if the new forces want to survive, they need to achieve annual sales of 30000-40000 vehicles; if they want to make profits, they need to sell 70000-100000 vehicles annually; if they want to realize cash flow self-sufficiency, they need to sell 50000-200000 vehicles annually. Compared with Tesla, at present, the new domestic automobile manufacturing forces are in the stage from 2014 to 2015 of Tesla, and it is urgent to improve the sales volume.

Different from focusing on technology R & D and product sales, Simon Weber, portfolio manager of Hartford Schroeder International Equity Fund, believes that the development of new forces in car making should pay more attention to the growth trajectory of enterprises, and the current growth trajectory can support the soaring valuation of these enterprises.

While the epidemic has temporarily weakened demand, programs to boost economic recovery have increased subsidies for the manufacture and purchase of future electric vehicles. In the next five to eight years, the share of electric vehicles in global car sales will soar from 3% to more than 30%. Companies that can protect their intellectual property will grow significantly as a result. Simon Webber said.

Reporters note: let the bullet fly for a while

Let the bullets fly for a while. As a bulk product, automobiles ultimately depend on product strength. If the sales volume can maintain the continuous growth, the capital market will continue to be optimistic. If its a bubble, it will burst sooner or later. For the new force of car making in the U.S. stock market soared, some people in the industry said so.

Although the current U.S. stock investors have shown a preference for the new forces of car manufacturing enterprises, the capital market, while believing in good stories and bright prospects, also needs solid performance figures to support.

According to the Q2 financial report in 2020, Tesla, the leader, achieved revenue of US $6.04 billion and net profit of US $104 million for the fourth consecutive quarter. However, it is worth noting that Teslas P / E ratio has reached 1120 times. However, the R & D, profitability and positive cash flow ability of Weilai, ideality and Xiaopeng, which are still running on the road of turning losses, have great uncertainty.

Although in the eyes of some investors, companies like Tesla should be seen as technology stocks, not electric vehicle manufacturers and car companies. But it is indisputable that Tesla, already two Toyota market capitalization, sold less than 3.5% of Toyota last year, and this years sales are expected to be only about 500000. But this is already the astronomical number in the new forces of car building. In July this year, Tesla delivered 11000 vehicles in the Chinese market, while Weilai, idealized, Xiaopeng, Weima and other vehicles were still at the level of 2000-3000 vehicles in the same period. Compared with Tesla, there is still a big gap in the delivery volume and scale of new domestic car manufacturing forces.

In addition, for the new force of car making, IPO is not once and for all. While getting a lot of exposure and financing, some of its own problems will also be exposed in the capital market. In the face of Tesla with a market value of more than $400 billion, as well as traditional automobile giants such as Toyota, Volkswagen and Daimler, which are eager to try in the field of electrification and intelligence, there are still many tough battles for the new forces of car making.

Perhaps just how Xiaopeng said in the IPO of Xiaopeng automobile: listing is just a milestone of the enterprise, but as a representative of smart car, Xiaopeng automobile has just begun.

Source: Qiao JunJing, editor in charge of daily economic news_ NBJ11279