Shulou(Shulou.com)11/24 Report--

"at present, there are a large number of new and" old forces "in the domestic market. With the increasing marketization of new energy vehicles, some enterprises are bound to fall down in the future.

Edit: Poetry |

One of the earliest new car-building forces in China, Weima Motor, which was jointly called the "four Little Dragons of the New Power" with Wei Xiaoli (Weilai, Xiaopeng, ideal), has reached the edge of the cliff.

Weima voluntarily terminated its RTO process with Apollo on the Hong Kong Stock Exchange after careful consideration, Weimar said in a post on its official Weibo account on Sept. 10. At present, Weimar is still an important shareholder of Apollo, and will continue to support the development of Apollo in the future.

Earlier, Apollo Travel (00860.HK) announced on the Hong Kong Stock Exchange on September 8 that the parties concerned had agreed to terminate the Weimar agreement, so the acquisition and placement would not take place. The reasons for the termination of the acquisition mentioned in the announcement include volatile global market conditions, continued uncertainty in financial markets and short-term economic recovery.

Photo Source: Apollo Travel announcement according to Red Star News, on January 12, 2023, Weima announced its arrival on the Hong Kong Stock Exchange through reverse takeover (RTO). Shen Hui, founder and chairman of Weima Automobile, said on his personal Weibo that Weima Motor was expected to complete its backdoor listing after the completion of this major acquisition.

The announcement of Apollo trip means that Weimar, which was in deep trouble, has lost the opportunity to list its shares in Hong Kong.

01, listing twists and turns since its inception, Weima Motor can be described as "like a fish in water" in terms of financing, only the public amount of financing, has received more than 35 billion yuan. Among the investors, there are many well-known PE / VC institutions such as Sequoia Capital China and Tencent Investment.

Data show that Weimar received a huge financing of 10 billion yuan from D-round in early September 2020, creating the largest single financing in the history of Chinese automobiles.

But the money needed to build the car itself is huge. According to the prospectus, Weima Motor has always been in a state of loss from 2019 to 2021, with a cumulative loss of 17.4 billion yuan in three years, and the loss has increased year by year. From 2019 to 2021, the total income was 1.762 billion yuan, 2.672 billion yuan and 4.7425 billion yuan respectively; the losses were as high as 4.145 billion yuan, 5.084 billion yuan and 8.266 billion yuan respectively; and the gross profit margin was-58.3%,-43.5% and-41.1% respectively.

To this end, Weimar is also looking for access to the capital market. In 2021, Weimar made a sprint to create a board, but to no avail. In June 2022, Weimar submitted its IPO application to the HKEx instead.

On January 11, 2023, Apollo, with a market capitalization of only HK $2.3 billion, announced that it would buy Weima Motor's subsidiary from Weimar for US $2.02 billion (14.8 billion yuan) and settle the matter by allocating 28.8 billion shares at HK $0.55 per share. After the acquisition, Weimar will hold 31.1 billion shares of Apollo, accounting for 68.26% of the shares. In this regard, the reverse takeover is also seen as Weimar clear its "backdoor" listing financing path.

At the same time as the acquisition of the additional shares, Apollo also disclosed that it would place 7.123 billion shares at a price of no less than HK $0.55 each to no less than six independent distributors, resulting in a total proceeds of about HK $3.918 billion and an estimated net fundraising of about HK $3.526 billion.

Apollo Travel is Apollo Wisdom Travel Group Co., Ltd., formerly known as Power Century Co., Ltd., founded in 2002, the global headquarters is located in Hong Kong, China, as a listed company, August 26, 2022, the company's Chinese name changed to Apollo Wisdom Travel Group Co., Ltd., from September 29, the listed company changed to Apollo Travel for short, currently mainly engaged in travel business, vehicle platform authorization and engineering service outsourcing.

According to Apollo's 2021 annual report, Weimar became the largest shareholder of Apollo in the fourth quarter of 2021 by controlling a 28.51% stake in Apollo through stock swaps and other operations. Shen Hui serves as co-chairman of the board of directors and non-executive director of Apollo Travel.

According to the 21st Century Business Herald, there are early signs of Weimar's reverse backdoor failure. Cao he, president of Quanlian Automobile Merchants Investment Management (Beijing) Co., Ltd., believes that Weima is unlikely to land on Hong Kong stocks through backdoor listing. "backdoor listing or listing through acquisition is also a special purpose acquisition company (SPAC) listing, which is more common in the US stock market. In order to attract listed companies, HKEx began to learn from NASDAQ in the second half of last year to provide listing channels for companies in need of financing. However, at present, the HKEx acquires too few companies for special purposes, and the listing mechanism is not too sound. "

02. Why did you fall behind? It is worth noting that now, Wei Xiaoli has completed its dual listing, and the "new contestant" zero-running car, which launched the listing at the same time, has also successfully landed on the Hong Kong Stock Exchange.

Looking at the list of new power sales, Weimar has disappeared from the top 10 list. In addition, Apollo mentioned in its announcement of its proposed acquisition of Weimar that Weima sold only 16500 electric vehicles in the first half of 2022.

The funding problem of Weima Motor also began to ferment in October 2022, and an internal letter released by Shen Hui circulated in the industry showed that Weima Motor was not only affected by the epidemic in many places in 2022, but also faced with great challenges in the supply chain. the sharp rise in raw material costs and untimely supply have seriously affected the production and operation of Weima Motor.

Weimar car office is no longer open, office rubbish everywhere, the financial crisis has also led to two pay cuts and suspension of the company. In addition, Weimar's financial crisis also triggered suppliers to collect debts. According to public information, Shanghai Xingjia Advertising Design Co., Ltd., Kunshan Jianbang Automobile sales and Service Co., Ltd., Anji Zhihang Logistics Co., Ltd., Chongqing Changan Minsheng Logistics Co., Ltd., Ningbo Nayuan Technology Co., Ltd., and other companies, requested the court to seize and freeze Weima's total property worth about 130 million yuan. Sichuan Weima New Energy Automobile sales Co., Ltd. has frozen its equity of more than 22.86 million yuan.

On November 24, 2022, Shen Hui responded positively for the first time to Weimar's "founder's annual salary of 1.2 billion," sales "lagging behind", losses and layoffs, and restored the status quo of Weima's operation, according to 21 Financial report. " The ranking of sales is the ranking of losses, thanks to much lower sales, lower share prices and lower valuations. There must be problems with the new car-building force's model of using losses to charge sales, including Weimar. I think there are problems in the whole industry. The way we compete is to continue to 'burn money', and there is a problem with our ability to continue to operate. "

Shi Jianhua, deputy secretary general of the China Association of Automobile Manufacturers, told the Daily Economic News: "at present, there are a large number of new and 'old forces' in the domestic market. With the increasing degree of marketization (new energy vehicles), some enterprises are bound to fall down in the future. The market has the law of 'survival of the fittest'. However, I believe that those enterprises that keep their concentration on the development of new energy vehicles will certainly persist until the end and achieve long-term development. "

"after years of development, new energy vehicles have entered a market-oriented development stage. if a product is not fully accepted by the market, it is difficult for long-term sustainable development."

03. Weima saved itself. Despite this, Weimar has not given up. After the storm of collective pay cuts, Weimar worked hard to return to work and production.

In April 2023, Weimar reported that it had ushered in new developments at the sea level, winning orders for ten thousand cars.

"everything is for the better!" Shen Hui said on his personal Weibo on May 4, 2023.

On August 22, 2023, according to a report in Hunan Daily, Weima Automobile and Jizhaojia Wisdom heavy Industry Group have reached a deep strategic cooperation at the capital level, and the two sides will reorganize Weima New Energy Commercial vehicle Group (Weima Commercial vehicle), a foreign company of Weima Automobile, as the new energy commercial vehicle new business section of Weima Automobile, to bid against the Cybertruck of Rivian and Tesla of the United States.

At present, the restructured Weima New Energy Commercial vehicle Group has received orders for 200000 logistics vehicles and trucks from Jizhaojia Wisdom heavy Industry Group.

According to the Daily Business News, there is a view that if the plan can be successfully implemented, Weima Motor may usher in a turning point in development, achieve its own hematopoietic capacity, and even reverse the development of passenger car business. But so far, Weimar has no public plans for the development and production of new energy commercial vehicles, nor has it demonstrated the complete vehicle products of new energy commercial vehicles, and there is a question mark over its follow-up development.

Weimar, which has just "broken up" with Apollo, once again launched self-rescue.

On the evening of September 11, US-listed company Happy Motor (Nasdaq: KXIN) announced that it had signed a non-binding letter of intent with WM Motor Holdings Limited ("Weimar Motor") and planned to issue a certain number of new shares to acquire the 100% stake held by its shareholders.

Happy Automobile, formerly known as Renren Automobile, is a high-end used car dealer group under Renren.

According to public data, Happy Auto entered the used car industry in 2015 with auto finance business, and officially entered used car retail in 2017, focusing on used car trading services, becoming one of the major dealer networks in China's used car market.

With the acquisition of Weimar, Happy Automobile is interested in its car-building ability.

In the announcement, Kaixin Automobile stressed that Weima currently has two industrial 4.0 standard intelligent manufacturing bases: Wenzhou production base and Huanggang production base. Weima Automobile is the first and rare representative enterprise with both intelligent manufacturing base and two new energy vehicle production qualifications for a long time, and it is the first car company to realize the digitalization of the whole industry chain among the new forces.

In addition, Kaixin Automobile also mentioned that Weima Automobile is a fully capable new energy intelligent vehicle enterprise in design, research and development (hardware and software), supply chain management, vehicle and battery pack manufacturing, online digital marketing, offline sales and service, auto finance and so on. It has its own core technology in the fields of vehicle integration, three-electricity system, intelligent cockpit, self-driving and so on.

Happy Motor had revenue of $82.84 million and a net loss of $84.706 million (620 million yuan) in 2022, according to the results.

This article comes from the official account of Wechat: new Research (ID:chuxinyanjiu), author: Poetry

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