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Tesla has surpassed the traditional car giants and firmly sits on the top of the global market value of car companies. Its "demonstration effect" has driven new Chinese car manufacturers to be active in the capital market. And Evergrande, which has always been active in making cars, is even more enthusiastic.
First, six Hengchi new energy vehicles were launched in one breath in early August, and then Hengda Health was renamed Hengda Auto. The market responded enthusiastically. After the name change, the market value of Evergrande Auto exceeded 200 billion Hong Kong dollars in one fell swoop. Two. Recently, famous private equity funds such as Yunfeng, Sequoia, Tencent, Didi and Internet giants have invested in shares of Evergrande Motors, which has once again attracted the attention of the outside world. The latest news on September 18 said that Evergrande Motors intends to be listed on the Science and Technology Innovation Board, once again opening the way for money.
Behind the series of "dazzling" operations of Evergrande Motors, the anxiety of Evergrande's car manufacturing has appeared. For example, just before Didi and other giants took shares, Evergrande had just completed the equity transfer of another marginal asset of Evergrande Auto, and its goal was to raise funds for its new energy vehicles. However, after obtaining financing, whether Evergrande can break out of the new energy vehicle market in the second half is still full of unknowns.
Evergrande’s car building anxiety
On August 3, Hengda Automobile, which had been silent for a long time, released six models in one go, named Hengchi 1-6, which basically covered a full range of subdivision models such as cars, SUVs, MPVs, and crossovers. Judging from the huge model lineup released by Evergrande, the position of Evergrande Motors directly crushes the new forces that release one or two cars a year. It seems that Evergrande has completed all the preparatory work for car building in two years. However, from the perspective of mass production time, Evergrande Motor finished the first step of the Long March after releasing the concept car.
According to Liu Yongzhuo, President of Evergrande Automobile, the Evergrande Automobile Plant will have the conditions for trial production in September this year. Trial production will start in the first half of 2021, and mass production will begin in the second half of the year. According to this timetable, Evergrande will take half a year from the formal mass production.
The new domestic automakers, whether it is Weilai, Xiaopeng, or the "rising stars" in the new energy automotive circle such as Ideal and Weimar, have completed mass production and delivery, and their products have been verified by the market. For Hengchi, which has not yet entered the stage of mass production, mass production and delivery are obviously a barrier that is difficult to bypass. With the listing of Xiaopeng and Ideal, this barrier is further raised. To deal with this challenge, Hengchi Big cars obviously need to run faster.
But in fact, Evergrande has already encountered bottlenecks at this stage. In the past two years, Evergrande has been accelerating in car building. It mainly relied on Evergrande's "money capability". This is also the secret of Evergrande's car-making process. But after the promulgation of the new regulations on "deleveraging" of real estate, Evergrande's "money capability" is failing.
According to public data, Evergrande Motor had soared its debt ratio to 66% as early as October last year because of its car manufacturing. However, after the introduction of new real estate regulations this year, it will face greater "deleveraging" pressure. It is reported that in accordance with the requirements of this year's new real estate regulations, a real estate company in Evergrande has stepped on three red lines, and its debt ratio (up to 183%) ranks first among the top ten domestic real estate companies. The debt pressure can be imagined.
In order to ease the debt pressure, Evergrande’s houses have been sold at discounts many times this year, but these can only relieve Evergrande’s own troubles, and have little effect on Evergrande Motors. Therefore, in order to help Evergrande Auto achieve mass production, Evergrande has accelerated its asset sales to "recover blood" on the basis of accelerating the sale of real estate.
Speed up financing
On September 11, Evergrande Automobile announced that Guangzhou Hengze and Jialishe Travel and Jinbi Property entered into the Hengda Hengkang Share Transfer Agreement and the Jialishe Share Transfer Agreement respectively. It is reported that Jinbi Property will acquire all the equity of Evergrande Hengkang and Jialishe Property Management at a total consideration of RMB 46.85 million and RMB 680,000 respectively. After the completion of the transaction, the total consideration obtained by Evergrande Auto was 47.54 million yuan.
After the completion of the disposal, Evergrande Automobile will no longer hold any equity interests in Evergrande Hengkang and Jialishe Property Management, and its performance will no longer be reflected in the company's performance. Through this equity sale, Evergrande has completed the divestiture of edge businesses, and Evergrande can also temporarily exchange some money.
It is understood that the proceeds from the equity transfer will promote Evergrande’s commitment to develop its vehicle manufacturing business, fully promote the research and development of Hengchi products, further improve its product structure, and promote the mass production of its new energy vehicles. However, this amount of less than 50 million yuan is a drop in the bucket for Evergrande Motor.
As a result, after the sale of the equity, Evergrande contributed to the 4 billion Hong Kong dollar investment of Yunfeng Fund, Sequoia Capital, Didi and Tencent on September 15. It is worth noting that before this round of financing, Yunfeng Fund and Tencent have just participated in the financing activities of Evergrande Property of up to 10 billion yuan, while for institutional investors who are not easy to make a move, this 4 billion yuan financing is It can be seen as a kind of recognition and support from other organizations for the strength of Evergrande in car manufacturing.
After all, from the perspective of the external environment, Evergrande has a more sufficient capital advantage in car-making, which is what other new car-making forces lack, and this 4 billion Hong Kong dollar financing has little effect on Evergrande’s controlling rights. Large (Hengda’s equity fell by 1.49% after the investment). Compared with the tens of billions of dollars spent on manufacturing cars, this 4 billion is more like an expression of support; for the giants, Evergrande Motors has been in the market after two years of layout. It's just a favor by the way.
Another plan behind financing
For Evergrande, fundraising is just a means. It is the goal to promote the intelligentization of Evergrande Auto and the Internet of Vehicles by pulling giants into shares. And this 4 billion real gold and silver fundraising has created a rare strategic synergy opportunity for all parties.
For example, Alibaba and Tencent have been deeply involved in the field of Internet of Vehicles for a long time. Their intervention will help Evergrande to stand out in the big wave of digital and intelligent upgrades; and Didi, as the world's leading shared travel giant, is in There is a large amount of technology accumulation in the field of intelligent driving, and its leading position in the field of travel can also provide blessing to Evergrande.
Specifically, Alibaba’s Zebra Network has developed the AIiOS car networking operating system, which integrates the core capabilities of Ali’s products such as AutoNavi Maps, Alibaba Cloud, Youku, Xiami, and Alipay. It can be used by Evergrande Motors users. Provide various system services.
Tencent also has unique advantages in the ecological layout of the Internet of Vehicles. Relying on its advantages in social entertainment, Tencent has comprehensively deployed in-vehicle entertainment systems, and launched in-vehicle automatic diagnosis (full detection of vehicle faults) detection equipment, etc., which will be able to provide users of Evergrande with a full range of in-vehicle entertainment applications.
And Didi has in-depth research in the field of artificial intelligence autonomous driving, and it will help Evergrande's intelligentization. In addition, as of the end of 2019, the number of registered pure electric vehicles reached 969,000, which accounted for more than 30% of the total number of pure electric vehicles in the country. This strategic investment in Evergrande will bring Hengchi to quickly seize the market after mass production. More imagination.
For Evergrande, it is of course beneficial to accelerating the future development of Evergrande Auto by absorbing all the advantages of each company. Nevertheless, Evergrande Auto is still not optimistic about the next competitive situation.
Evergrande Motor's second half battle
Judging from the series of large-scale purchases of Evergrande Motors, Evergrande Motors is indeed as Xu Jiayin said, Evergrande’s car building is a big blueprint; from the perspective of the overall pattern of the domestic new energy automobile market, Evergrande’s entry into the game is indeed true. It is the biggest variable in the entire domestic new energy vehicle market, but what will happen after Evergrande enters the market is open to question. At least from the current point of view, there are still many specific challenges facing Evergrande to build cars.
First of all, Evergrande Motors has to face the challenge of mass production climbing. From the current point of view, Evergrande has just completed the design of the concept car. According to its official mass production plan, there is still almost half a year away. As the subsidy policy for domestic new energy vehicles approaching, the pressure on mass production in the later stage will increase. With the new car manufacturers generally accelerating the speed of mass production, this challenge is obviously more severe, and it faces Obviously, it is not only the new forces that build cars.
Secondly, there will also be the risk of expanding losses. At present, Evergrande Automobile is entering a stage of deep investment. Mass production, factory production, automobile sales and other links require huge investment, and the financial pressure will naturally not be small. The automobile is a large-scale business. Only when mass production and sales reach a large scale (at least 50,000 to 100,000 vehicles) at the same time, can it have a chance to make a profit. In the long ramp-up and sales phase of mass production, it will still face huge amounts. Threat of loss.
For Evergrande, which has just started mass production, this is naturally impossible to achieve in the short term, and the expansion of losses is almost inevitable.
Finally, there is the issue of product sales. With the decline in domestic auto market sales, the new energy vehicle market has also been affected. Auto sales are weak, and new energy vehicle sales have naturally evolved into stock competition. Under such conditions, those new car-making forces that create brands are obviously More dominant. With the acceleration of Tesla's localization, the pressure on domestic new energy car companies will further increase.
Therefore, in the long run, even with the blessing of many giants, Evergrande will still face a protracted war in the second half of the journey. As for how long the war will last, it is not yet known, but its intensity is predictable.
Text/Liu Kuang public number, ID: liukuang110