Have you ever seen someone who looks like he's dying and then suddenly starts to look rosy-cheeked? Nezha Auto is such a "person". Due to its small scale and long-term losses, there has been a saying in the industry that "Nezha will be the next new force to go bankrupt." But when Nezha Auto announced at the end of June that it had submitted a prospectus to the Hong Kong Stock Exchange and was once again making an attempt at an IPO (initial public offering), it seemed that Nezha really had supernatural powers. In the past two years, we have rarely heard news about new energy vehicle manufacturers going public in large numbers. In early May this year, Geely's Zeekr Auto was listed on the New York Stock Exchange, which was the biggest event of China's new car-making forces in the capital market in the past two years. The current capital market seems to have little interest in new energy vehicles. Therefore, Nezha Auto's IPO attempt is, to some extent, going against the wind. What will be the result? Let’s first look at the fundamentals of Nezha Auto. In 2023, Nezha Auto had a total of 5 new energy vehicle models on sale, with cumulative sales of 127,000 units, a net loss of 6.87 billion yuan, and a loss of 15,800 yuan per vehicle, which literally means "loss on every vehicle sold." From January to May 2024, Nezha Auto delivered a total of 43,564 vehicles, only completing 14.5% of the annual sales target of 300,000, which can be said to be far below expectations. In the past three years, Nezha Auto's net losses reached 4.84 billion yuan, 6.67 billion yuan, and 6.87 billion yuan, respectively, totaling 18.4 billion yuan. There is no sign of reducing losses since 2024. At the same time, Nezha Auto currently has only 2.84 billion yuan in cash on its books. In comparison, Ideal Auto's cash reserves exceed 100 billion yuan, Xpeng has reached 45.7 billion yuan, and NIO, which has suffered huge losses, has a cash reserve of 57.3 billion yuan. Even Leapmotor, which seems to be relatively weak, has 19.4 billion yuan. Losing money and being in debt are not a big deal. Among the current new car-making forces, no one dares to say that they are sitting on the Diaoyutai State, but as long as the financial data is healthy and the prospects are good, the losses are controllable. Nezha Auto is different. It struggled from 2021 to 2023, and its gross profit margin finally increased from negative 34.4% to negative 14.9%. You must know that Tesla's investors panicked when its gross profit margin was just below 20%. In comparison, Nezha Auto has a more calm and composed foundation. Does Nezha Auto’s confidence come from a certain popular car model? The answer is, not yet. Nezha Auto has a total of 5 models on sale. In May, only the newly launched Nezha L sold more than 3,000 units per month, while the rest sold less than 1,000 units. It should be noted that Nezha Auto has always been hovering in the low-end market, with the average price of a single car being only around 100,000 yuan. So, does Nezha Auto have any core technologies? Yes, it launched the Haozhi brand in May, which includes a complete set of core technologies related to new energy. This set of technology is enough to make joint venture manufacturers salivate, but who among the mainstream domestic new energy manufacturers nowadays does not have such a set of things? It is a passing line, nothing more. Going public requires telling a story. Judging from Nezha Auto’s performance, it may not be easy for it to tell a conventional story, and even if it does, investors may find it hard to believe it. If there is anything that is slightly attractive, it is Nezha Auto's overseas business. Data shows that from January to May, Nezha Auto exported 16,458 new energy vehicles, becoming the export champion of new energy vehicle companies. In addition, Nezha Auto has established three overseas factories in Indonesia, Malaysia and Thailand. This may be one of the few highlights in Nezha Auto's prospectus, but the scale is not large, and there is no evidence to prove that Nezha Auto's exports will experience explosive growth in the future. From an objective point of view, given Nezha Auto's current state and considering the current market environment, it is actually not suitable for a rush for an IPO. It should settle down for a while, at least until the financial data looks better. But Nezha Auto seems unable to wait any longer, and investors represented by Zhou Hongyi also seem to have lost their patience. Zhou Hongyi's 360 company invested 2.9 billion yuan in real money in 2021 to lead the D1 round of financing for Nezha Auto. After several rounds of cashing out, it currently holds 9.12% of Nezha Auto's shares. Nezha Auto's equity structure is relatively dispersed, and no investor holds more than 20% of the shares, which shows that Zhou Hongyi has a significant voice in Nezha Auto. It is no wonder that Nezha Auto's founder Zhang Yong often uses the lively connotation mode on Weibo. But this investment brought huge losses to 360. This year, Zhou Hongyi has been working hard to tie himself to Nezha Auto at any occasion where he can show his face, using his own fame to attract traffic to Nezha Auto, probably to increase the popularity of Nezha Auto and help it achieve an IPO. If Nezha Auto successfully completes its IPO, it will be able to obtain a considerable amount of funds. It is worth mentioning that Nezha Auto announced on April 15 that it had received 5 billion yuan in investment and clearly stated that the investor will coordinate relevant resources to support the company to achieve an IPO as soon as possible. Judging from this figure, the funds raised by Nezha Auto's IPO are at least in the tens of billions. This may help Nezha Auto solve its urgent problems. Public information shows that the investors in Nezha Auto this time are Tongxiang State-owned Capital, Yichun Jinhe and Nanning Minsheng. These are all investors in the development process of Nezha Auto and belong to the "Local Government Industrial Development Fund." Zhou Hongyi, the current main investor of Nezha Auto, wants to quickly push Nezha Auto to go public, so that he can gradually get out of the predicament. As the "God of War" on the Internet more than ten years ago, Zhou Hongyi has rarely spoken out in recent years due to the sluggish performance of 360 Group in recent years. If it weren't for Nezha, he would have gradually entered retirement like other Internet tycoons of the same generation. But in the past few months, Zhou Hongyi has become a traffic star in the automotive circle. This may prove from the side that Nezha Auto’s problems are more serious than the outside world imagines, and it has reached the point where only listing can solve the problem. That’s why Zhou Hongyi is working so hard. In the past few months, the attention paid to Nezha Auto has indeed increased significantly, which is basically related to Zhou Hongyi. He even named the Nezha L model the Red Edition. Judging from the experience of Xiaomi Auto, letting a boss or investor come out to create traffic can indeed have a certain effect. But it should be noted that Zhou Hongyi's influence today is not as great as Lei Jun's. Lei Jun has always been on the front line, while the younger generation of consumers may no longer know Zhou Hongyi. The effects of their sales cannot be compared. More importantly, no matter how strong the traffic is, it can only play a supporting role. As an automobile brand, Nezha’s primary task is to come up with a hit model as soon as possible and use product strength to break the situation. Only in this way can it be the safest. In fact, although the heads of car companies can certainly attract a lot of attention when they promote their products, it is still a question of how much of it can be converted into actual sales. From the current situation, the crazy appearances of Wei Jianjun of Great Wall, Yin Tongyue of Chery, and Zhu Huarong of Changan have not brought about a significant increase in sales after becoming Internet celebrities. As for Xiaomi Auto, it has been promoting wildly for more than a month and has achieved monthly sales of over 10,000 units, but this was only the level of the mainstream new car-making forces two years ago. How it will perform in the future remains to be seen. If Zhou Hongyi standing on the roof of a car in red can save a car brand, then China's new energy market is in great danger; however, from the current perspective, consumers are very rational and the industry is developing more and more steadily. People like to watch fun, but when buying a car, they are unlikely to spend money just because of the CEO of the car company himself. It is still difficult to say whether Nezha Auto can successfully achieve IPO this time. But judging from various conditions, even if it is successfully listed, the prospects of Nezha Auto are not optimistic. In any case, it is still okay to give it a try. Since IPO is the last chance, why not give it a try, just in case it succeeds? I’m afraid it will fail again this time. Even if Nezha has three heads and six arms, he will be in great danger. As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity. |
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