Financial report full perspective | Weilai is still boiling

Weilai's Q1 financial report is the last submission for new cars.It confirms the pessimistic trend of the auto industry in the past six months.

The Q1 results were released, Weilai US stocks fell 7.65% after the market, and Hong Kong stocks fell 6.7%.

Costs soared, and Weilai’s gross profit fell by more than 4%.Sales have stalled, and it has not exceeded 10,000 for 5 consecutive months, and revenue has hardly increased.Among them, part of it is the common dilemma of new cars, but it also has its own problems.

At the latest performance meeting, Li Bin repeated many times, "uncertainty".Among the many variables of batteries, chips and supply chains, no one can accuratelypredictthe future.

But Weilai still has confidence, and Li Bin also gave a lot of "promises".

"June deliveries will hit a new high."

"There will definitely be a rebound in the third quarter."

"Wei Lai is definitely going to the United States."

"ET5 orders are really high."

Since the decline is inevitable, what is the problem in the second quarter?How did Weilai "boil" to break the game?

Goodbye, high growth period

The first quarter financial report shows that Weilai’s revenue was 9.91 billion yuan, a year-on-year increase of 24.2%, but there was almost no increase from the previous quarter.

The net loss was 1.78 billion yuan.Within expectations, and narrowed year-on-year.It shows that Weilai's cost control ability has been improved to a certain extent.

Affected by costs and sales, Weilai's gross profit also fell.The company's gross profit margin in 22Q1 was 14.6%, compared with 19.5% and 17.2% year-on-year and quarter-on-quarter, respectively.

The gross profit margin of vehicle sales was 18.1%. Although it remained at a certain level, it was down from 21.2% year-on-year and 20.9% month-on-month.

At the same time, Weilai's gross profit decline exceeded the industry average.Under the same general environment, the ideal gross profit of the whole vehicle can rise to 22.4% against the trend, while Xiaopeng only drops by 0.5%.

In addition, the gross profit of the whole vehicle was 18.1%, which was higher than the company's overall gross profit, which was due to NIO's excessive investment in the non-vehicle business.Due to the initial stage, NIO used services to break through the sales difficulties, resulting in the need to continue to invest heavily in systems such as battery swap stations and NIO centers.

At the same time, it can also be seen from the average delivery volume of a single store that the store efficiency of NIO is the lowest among the new forces, which is maintained at less than 30 units per store, and there is no significant improvement trend at present.

In the past, the ranking of new domestic forces has always been "Wei Xiaoli", but by 2022, Weilai will be "left behind" by Ideal and Xiaopeng.

Bai Yiyang, manager of the research department of CMB International, said that from the perspective of NIO's overall performance, the new car ET7 did not perform well, and NIO still bet on ET5 and NT2.0 ES7.

For the whole year, the performance highlights will not be seen until 4Q.At the same time, Weilai also communicated plans for brands, batteries, and platforms in 2024, thinking for a long time, and lacking awareness of short-term competition.

But compared with itself, Weilai has also made progress.NIO's net loss was 1.78 billion yuan.Within expectations, and narrowed year-on-year.This indicator shows that Weilai's cost control ability has improved to a certain extent.

From the perspective of overall performance, the challenges that Weilai is currently facing outweigh the opportunities.

From the perspective of growth indicators, the growth rate of NIO's total assets has slowed down, which means that the company is gradually saying goodbye to the period of rapid growth and entering a stage of stable development.Improvements, new investments in research and development, factory building, and car manufacturing have also increased Weilai's debt ratio, which has exceeded asset growth.

Although the overall growth rate of NIO remains within the standards of emerging industries, this is undoubtedly a signal thatnew energyvehicles are bid farewell to the golden age.

Gross profit under pressure, uncertainty

At the performance meeting, Li Bin also emphasized that in the second quarter, due to the impact of the epidemic and the increase in battery prices, the gross profit margin is expected to be less than ideal.The pressure is expected to be even greater than that in the first quarter.

At the same time, the orders currently delivered by Weilai are all before the price increase.This also means that low-price delivery and second-quarter production will further erode NIO's gross profit.Li Bin revealed that orders with increased prices will be delivered in the third quarter of 2022.

Uncertainty also manifests here.Li Bin said that although Weilai increased its price in the third quarter, its gross profit and other income were still affected by the price of raw materials.At the same time, the second-generation platform car can increase the gross profit, and it will definitely rebound in the third quarter, but the level of recovery cannot be determined.

Li Bin revealed that due to the linkage price agreement signed with the battery supplier, the price is highly related to the material cost.But at present, the price of battery raw materials is going down from a high point, and the price of lithium, which is the most relevant, is also showing a downward trend. Many lithium mines are also accelerating their mining, and their output is increasing.

Li Bin believes that the overall material cost of batteries will go down, but the magnitude of the decline is uncertain.He pointed out that the general opinion of the industry is that lithium carbonate may reach 300,000/ton in Q4 in 2022, a decrease of 20%-30%.Nickel prices have also seen a decline in forecasts.Although the overall magnitude is uncertain, battery prices are showing a downward trend.

Regarding the battery, you have to listen to what the Ningde era has to say.

According to "Ning Wang", in the first quarter of 2022, the battery price adjustment has not been completed, and the gross profit of the Ningde era is 10%.In the second quarter, the cost was officially transmitted to the downstream, and the gross profit is expected to rise to 15%.

The extra 5% needs to be borne by the OEM.

According to estimates by Soochow Securities, the average price of power battery products will rise by 20%-30%.Among them, the cost of Ningde era ternary 523Pack is 0.89 yuan/wh, an increase of 0.12 yuan/wh from the previous month.The cost of lithium iron phosphate Pack is 0.7 yuan/wh, an increase of 0.1 yuan/wh from the previous month.

Although lithium mines are declining, pressure in the second quarter is inevitable.

In addition, the strict test of the chip is still going on.Li Bin said frankly that the uncertainty on the supply chain side lies in the fact that "chip supply, the price increase that occurs every period of time is different. At present, it is the basic chip supplied by companies such as TI, NSP and Infineon."

He pointed out that because there are many types of chips required for new energy vehicles, there are many uncertainties.10-20 chips are in short supply in rotation.Although Weilai has also found "various" solutions, it is impossible to predict which one will be out of stock in the future.

But Li Bin also showed some confidence. He said: "In the future, the supply will be locked from the end of 2021, and the overall impact will be small."

At the same time, Li Bin emphasized that with the launch of new models, the high-margin portfolio will gradually increase.In the second quarter, the production capacityof Weilai ET7will start to climb, and the production of this model can basically be guaranteed in the third quarter.

At present, the production capacity of NIO's new products still needs to climb.But whether it is from the perspective of vehicle production or from the perspective of demand, "it is not a problem."

In fact, the main problem NIO faces is still on the supply chain side.The expansion work has been basically completed before, and the new factory will start contributing production capacity in June.Li Bin himself also said that he is very confident in the significant growth in deliveries in the third quarter.

The production shutdown caused by the recent epidemic is not a small loss to Weilai. According to Li Bin’s previous introduction at the performance meeting, JAC Weilai’s production line is being upgraded to a production capacity of 60JPH, which is expected to be completed in June.This means that for every day of production downtime, there will be 6-700 lost capacity.

However, since June, the supply chain and vehicle production have basically returned to normal, and deliveries in several important markets, including Shanghai, have also been on track.

It is reported that the JAC Weilai F1 factory has returned to the level before the epidemic and gradually increased output.The F2 factory in NeoPark has completed the production line and entered the vehicle manufacturing verification stage. It will be officially put into production in the third quarter of this year as planned.

Li Bin said that Weilai will speed up vehicle production and delivery starting in June, and the total delivery volume in the second quarter of 2022 is expected to be 23,000 to 25,000 vehicles.This also means that NIO's delivery volume will return to 10,000 units.

"Sea of ​​Vehicles" Tactics, Master the Lifeblood

Selling cars is the top priority of the new forces.This time, Weilai also revealed the progress of many new cars.

Li Bin said that the delivery of ET5 orders is going to be very good.There have been many auto shows recently, and this new model is also popular.

In June 2022, NIO will release the ES7, a new five-seat SUV model based on the NT2.0 platform, and will start mass production and delivery in late August.

Previously, at the Q4 2021 financial report, Li Bin had confirmed that Weilai would upgrade the current 866.This time, he further revealed that the old models will have some new intelligent hardware applications, and related plans will be released in the near future.

At the same time, Li Bin is also preparing to start the lifeblood of the new car, the battery.

Li Bin revealed that NIO has developed a battery team of more than 400 people.In-depth participation in the research and development of battery materials, battery cell and whole package design, battery management system, manufacturing process, etc., to comprehensively establish and enhance battery system research and development and industrialization capabilities.

Li Bin emphasized that these investments will enhance the long-term competitiveness and profitability of NIO products.

At the end of May, Weilai's battery ambitions first appeared.Previously, the "Environmental Impact Report Form for New R&D Projects of Shanghai Weilai Automobile Co., Ltd." was published on the environmental information disclosure platform of Shanghai enterprises and institutions.According to the document, nearly 220 million yuan was invested in this lithium battery research and development project.

NIO plans to build 31 R&D laboratories to engage in the research and development of lithium-ion cells and battery packs, and is expected to engage in research and development for about 250 days a year.

In addition, NIO also plans to build a trial production line for lithium-ion cells and a pack line for battery packs to be engaged in the trial production of lithium-ion cells and battery packs. The construction of the trial production line for this project is planned to be a possible scale in the subsequent development process. Do a good job in the early stage of production, and trial-produce samples for subsequent in-depth development.

Li Bin said that the NIO battery R&D team and investment are increasing.The plan is that in 2024, the next-generation model will be equipped with an 800v high-voltage platform, and a matching battery pack will be released at the same time.At present, batteries are also the focus of team investment and research and development.

He emphasized: "(The new battery) will have revolutionary technology applications, new definitions, and advantages in cost, performance and safety." In terms of battery supply, Weilai's long-term direction is to cooperate with external procurement.At the same time, battery replacement is important to increase competitiveness and gross margins.

The battery is here, who is it for?

The answer is NIO's new Volkswagen model.At the performance meeting, Li Bin said, "Volkswagen models (using) Weilai's own batteries will also support high-voltage fast charging."

It is still uncertain whether NIO's high-end models will be replaced with self-developed batteries in the future.But with the current progress, it is more likely.After all, the universal 800v new platform developed by "spending money", coupled with a new battery replacement system.Not in a new car, it's unreasonable to say.

He said that product development and production of new mass-market brands are progressing steadily.The price remains unchanged, ranging from 200,000 to 300,000 yuan, and the NT2.0 platform is also used.

On May 10, NIO signed a strategic cooperation agreement with Hefei City on the NeoPark vehicle phase II and key core components supporting projects. According to the agreement, NIO started planning and preparing for the production capacity construction of new brand products.

Going to sea, required

At the performance meeting, some institutional investors inquired about Weilai's intention to recruit in the United States and the details of its layout.

Li Bin confirmed the issue of going overseas to the United States. He said: "I will definitely go to the United States to expand business opportunities and expand deployment as soon as possible." But he did not disclose more information.

At the same time, NIO is also accelerating preparations to launch our products and services in Germany, the Netherlands, Sweden and Denmark.Li Bin also admitted to answering the difficulties encountered by the Norwegian market at present.First of all, there are difficulties in "energy", including the localization of Weilai's charging and replacement and after-sales systems, and there are also some problems.At the same time, the understanding, price sensitivity and structure of newly-built cars by local consumers in Norway are different from those in China.

This time, Weilai's intelligent driving is finally going to release a new product.The enhanced version of NOP PLUS Pilot Assist will be launched in the third quarter. Based on the high-precision map jointly developed by NIO and AutoNavi, it will focus on full-stack self-developed.

When talking about NIO's autonomous driving technology, Li Bin did not forget to boast."After the delivery of NIO's NOA on March 28, the auxiliary performance indicators have jumped significantly. According to the latest test, the current level is several times higher than that of the first generation."

For all new cars, 2022 will undoubtedly be another "cold winter".Compared with the planning of great achievements, it is undoubtedly more important to control costs and hematopoietic ability.

Repeated battery, chip and supply chain issues are like the sword of Damocles hanging over everyone's head.Weilai's problem is also a common problem faced by new cars.