2003: Starting with Foreign Trade

Chapter 1058 Dazzling Revenue
"Wei Lai has no intention of targeting any particular company; all our decisions are based on the strategic needs of the companies."

"With the phasing out of subsidies for new energy vehicles and changes in the market consumption environment, the new energy vehicle industry will shift from policy-driven to technology-driven in the future. Therefore, Weilai Auto will have more inclusive policies in terms of technology in the future."

With this series of combined measures, Weilai became the hottest brand in the market in the first quarter, and major manufacturers were suppressed to the point of being unable to raise their heads. Because the intelligent driving guarantee policy involved the core selling points of some companies, the online atmosphere became somewhat distorted.

Extreme fan groups used the pretext of targeting Wei Lai to continuously attack Wei Lai's car owner, but Wei Lai's car owner was not to be trifled with, and the two sides argued fiercely, forcing Tan Jincheng to step in and respond.

Whether it works or not is unknown. This is because in 2023, the online public opinion environment has changed considerably. If it were a few years earlier, this kind of behavior, which was seen as a contest, would have greatly affected Wei Lai's reputation.

Li Bing was merely expressing his lack of interest in cooperating with them when he was criticized so harshly that he had to change his tune and issue an indirect apology.

"Sigh, the public opinion environment has really changed a lot."

Tan Jincheng has been involved in the internet industry since the beginning of the century, almost 20 years ago. The internet environment has changed dramatically in those 20 years, especially with the advent of the era of self-media, which is almost a complete transformation from the past.

"We also need to pay attention to the public opinion environment. It's not a good thing to keep getting criticized like this. When necessary, we should take some countermeasures against some big V's who spread rumors."

Everyone desires a fair public opinion environment, but absolute fairness is impossible, and absolute fairness is not necessarily a good thing. Some influential figures, after receiving money, dare to say anything.

Spreading rumors is nothing new to them.

"I will have the public relations department pay special attention."

Zhou Ao has recently witnessed the power of his fan base and feels immense pressure. For a long time, Wei Lai has typically adopted traditional legal channels and official statements in dealing with online rumors and malicious attacks, adopting a relatively conservative approach.

Basically, most car companies use a similar approach. However, the network environment is different now, so this approach is somewhat slow, and they need to keep up with the current network pace.

BYD has taken action in this regard, as has Tesla a few years ago. However, Tesla was more fortunate; as sales of BYD and Tesla increased, the attacks they received on the internet suddenly decreased.

"The bigger the tree, the more the wind will blow against it. We need to not only establish a public opinion response mechanism, but also make some changes in our publicity."

From product promotion to value output, some changes are necessary.

Zhou Aoshen agreed. As the public relations manager, he had been extremely busy these past few months. In the past, he didn't need to be on the internet as often as Li Xiang, but now things were different. He had become the third most active executive on the internet after Li Xiang.

After a quarter of making a splash, it's time for Wei Lai to eliminate the negative impact. However, it's impossible to keep a low profile now, as it's annual report season again.

"That's good too. The best way to shift your attention is to find new hot topics."

Since the explosive growth of the new energy vehicle industry last year, Weilai has attracted much attention from the capital market. However, the investment enthusiasm in the new energy market has cooled down, and Weilai's market value has been difficult to make a big breakthrough.

Entering the first quarter of 2023, the investment boom shifted to China Special Energy and AI. The three major telecom operators, the three major oil companies, and the banking sector performed well. The computer, communications, and media industries, represented by AI, became the main theme of the market, accounting for 40% of the market's trading volume, with a significant siphon effect.

In stark contrast to the booming TMT sector, the new energy sector, which was the main theme in the previous two years, performed poorly in the first quarter, entered a period of adjustment, and suffered severe capital outflows. Even with capital attention, it was difficult for the market value to break through.

As new generations surpass the old, the new energy vehicle industry, which has lost its luster, is performing poorly overall. Currently, WILTE's market value remains between 1.2 trillion and 1.3 trillion, ranking third among global automakers.

Ahead of Wei Lai are Tesla and Toyota. Tesla's market value, converted to RMB, is approximately 4.5 trillion RMB, while another new energy giant, BYD, has a market value of around 7000 billion RMB.

Even without Tesla, everyone knows that the revenue of car companies like Wanda and BYD is somewhat underestimated relative to their market value, but there's nothing that can be done about it since the market focus isn't on new energy vehicles.

The reason why Weilai has attracted the attention of the capital market is not only because of its revenue performance in 2022, but also because of the outstanding performance of Weilai's various product lines, which has made capital smell opportunities.

"With its current financial structure, any one of Wei Lai's business segments could actually be established as a sizable independent company."

The battery business has achieved the world's number one position. Yuechi Auto's gasoline vehicles plus the Galaxy series, and Weilai Auto's E series, L series, Exeed series and Aion series, each business is doing very well.

The only drag on the company's performance is Zhidou Auto. With the A00-class market being squeezed, Zhidou Auto's sales have been unable to improve. And due to the low profit margin, although the export business has increased, the losses have increased.

Although Wei Lai didn't expect Zhidou Auto to make money and mainly focused on expanding its model range, if it continues to lose money like this, it's not impossible to give up.

This is the reality of Tan Jincheng. He will not deliberately maintain a loss-making business for the sake of so-called vanity projects or sales volume, unless the business has a very good prospect.

"You need to tell a story. Although your market value is very high now, how can you boost the stock price without telling a story?"

Compared to previous years, Sequoia Capital, now renamed Sequoia ZG, is more cautious in its investments, and Shen Nanpeng is much more low-key, with far fewer public appearances.

Sequoia's recent investment plan is the "Centaur" project, which focuses on hard technologies.

"What story are you trying to tell us? You just want us to split this up. Forget about it."

During ProLogium's Series D funding round, Tan Jincheng met Shen Nanpeng. ProLogium is a globally renowned developer of solid-state battery technology. The Series D funding round was aimed at accelerating production line construction and was led by Sequoia Capital.

Tan Jincheng's ByteDance has kept a low profile in recent years, focusing on investing in hard technologies, especially new energy technologies. The two companies have also made simultaneous investments in ProLogium.

Solid-state batteries are the future trend of battery technology. Jinsheng Technology is also conducting its own technology research and development, while ByteDance is cooperating with Jinsheng Technology on the periphery and making some investments. Currently, the mass production of solid-state batteries is optimistically expected to be in 2025, while a more conservative view is that it will not be possible until 2028.

The year of mass production is not actually that important to Wei right now.

The promotion of solid-state batteries requires not only overcoming technical challenges, but also navigating the whims of these new energy giants. If these giants don't cooperate, even the most advanced technology will be wasted.

"Hey, why don't you give it a try?"

Shen Nanpeng sighed. He had worked with Tan Jincheng for many years and knew how difficult it was to persuade him. Even without much capital, Tan Jincheng would not yield to capital and would firmly grasp the control and shares of the company in his own hands.

Given Tan Jincheng's current status, it would be even more difficult to persuade him.

The undervaluation of Weilai's stock price and the size of the A-share market have led major investment institutions and conglomerates that have invested in Weilai to feel that listing Weilai as a whole group is somewhat of a loss.

Both Jinshidai and the Aion team can be spun off. Jinshidai can exist as an independent listed company, while the rapid increase in sales of the Aion series demonstrates its strength as a new force.

Scale is king. In the primary market, the Aion brand is valued at hundreds of billions. In 2022, Aion's sales reached 27 vehicles, doubling year-on-year. It also maintained a high growth momentum in the first quarter. Among mainstream manufacturers, Aion's year-on-year growth rate has long ranked first.

High growth potential is key to high valuation. Stable high sales volume proves that its products have been validated by the market, rather than being just "PPT car manufacturing". The capital market is also willing to pay a higher premium for speed.

In addition, its unique business model and positioning, backed by Weilai, have inherited Weilai's car manufacturing heritage, supply chain system and quality control capabilities, which have also brought a more stable foundation to the Aion series.

“I know what you’re up to. If you ask me, you should earn less and invest more in companies that need funding.”

Tan Jincheng curled his lip. Jinxin Times had huge cash reserves and didn't need to split and list at all. These capital tycoons also knew that they couldn't get a piece of the pie from Jinxin Times, so they were eyeing the Aion series, which still required a lot of investment. Capital tycoons could reap huge profits from the processes of financing, splitting, and listing, and the Aion series was exactly what they were targeting.

"Alright, think it over again. Be sure to let us know when you're interested."

"Oh, by the way, congratulations to you too."

Thank you, and congratulations to you as well.

"Let's not consider a stock split, but rather a share split. The current share price of Weilai is too high, which is not conducive to investors buying in."

"Yes, we'll consider it."

Shen Nanpeng's congratulations were of course referring to Weilai's revenue and net profit in 2022. In 2022, Weilai's revenue exploded, making it the year with the most exaggerated growth since the company was established.

Due to numerous major events in the preceding months, this year's annual report was not released in advance. Instead, it was scheduled to be released at the end of March, along with other automakers. The company chose to release its annual report after the market closed on March 24.

At 3 p.m. on March 24, Weilai released its 2022 annual financial report on time, as previously announced.

"Wow, that's incredible! These results are absolutely phenomenal!"

The highly anticipated financial report caused a huge uproar as soon as it was released, mainly because the report was simply too dazzling.

"The new energy industry has really taken off. Weilai's revenue should rank third among private companies. It's really impressive. The market value of 1.2 trillion is really undervalued."

Weilai Group's revenue is divided into two parts: the total revenue of its automobile business is 4405.92 billion yuan, while the revenue of its battery business, namely Jinshidai, soared to 3285.94 billion yuan, with a total revenue of 7691.86 billion yuan.

This revenue figure shows that the automotive business revenue exceeded that of another new energy giant, BYD, by as much as 1000 billion yuan, while the battery business revenue saw a growth rate of 152% compared to last year.

Jinshidai, which just surpassed 100 billion yuan in revenue last year, has seen such a large increase this year. This is thanks to rising raw material prices and increased battery sales. It can be said that both volume and price have increased. The two best years for the lithium battery industry will be 2021 and 2022.

而净利润方面，锦新时代的净利润也从去年的不足160亿元飙升至今年的307.29亿元，锦新时代账面上的现金以及等价物净额从2021年度的120亿元飙升至820亿元。

"If we're talking about which company in the Weilai Group is doing the best, it has to be Jinshidai. The money they make in one year is more than many companies can earn in their entire lives."

"Selling batteries is more profitable than selling cars, it's true!"

While there are some objective factors at play in the strong money-making ability of Jinsheng New Energy, it is indeed the envy of many car companies. Not only Jinsheng New Energy, but also companies such as BYD's Fudi Battery, CATL, and Guoxuan High-tech made a fortune in 2022.

The whole vehicle business is not actually that profitable. Take Weilai Automobile as an example: its revenue reached 4405.92 billion yuan, but its net profit was only 189.45 billion yuan, with a net profit margin of about 4.3%.

With total revenue of 7691.86 billion yuan and net profit of 497.37 billion yuan, the net profit margin of 6.47% is well-deserved for the leading position of Weilai in the manufacturing industry, both in terms of revenue and net profit.

"According to the recent performance reports of private enterprises, only five companies have a total revenue exceeding 7000 billion yuan. If we include Wei Lai, that makes six. It's really strange that the stock price of this business isn't rising."

"The main problem is that the stock price is too high. Wei Lai, how about you do a high stock dividend and share split so that we can all participate?"

On Friday, the day of the annual report, Weilai's stock price did not fluctuate much throughout the day. Today's closing price was 497.25 yuan, with a market value of 1.21 trillion yuan. With the threshold for listing on the ChiNext board and a price of nearly 500 yuan per share, the investment threshold is indeed a bit high for ordinary investors.

Based on 100 shares, the minimum investment threshold is 50,000 yuan, which is not low for the A-share market, which is dominated by retail investors.

"Wei Lai's performance has surpassed that of Chrysanthemum, that's outrageous! Who is the real pride of domestic products?"

In the middle of the month, Chrysanthemum announced its revenue for 2022, totaling 6423 billion yuan. Compared to the 6368 billion yuan in revenue in 2021, the performance was stable. However, compared to its peak in 2019 and 2020, the revenue decline was extremely severe.

2019 and 2020 were two years of great success for Chrysanthemum, with revenues of 8588 billion yuan and 8914 billion yuan respectively, enjoying unparalleled popularity.

Two private enterprises from different industries clashed fiercely after Chrysanthemum entered the automotive industry. Although the top executives of both companies have tacitly maintained a low profile after several previous clashes, they often appear in the same camera.

However, fans will still make comparisons, especially with the Weilai L series range-extended electric vehicles, which overlap with Seres' market and naturally have competitive factors.

"They were just lucky. Didn't they see that Weilai's main growth driver is actually lithium batteries? Once the price of lithium battery raw materials drops, they definitely won't be able to maintain this growth."

"That's right. With such a significant drop in the average selling price of a single vehicle, and fierce competition in the most profitable models, growth this year will be limited."

There are quite a few knowledgeable people in the industry. Weilai's overall revenue and net profit are indeed very impressive, especially in the new energy vehicle industry, which is mainly characterized by losses. Weilai's ability to achieve a net profit ratio of over 6% is truly enviable, as its industrial chain capabilities are remarkable.

As of 2022, among new energy vehicle manufacturers, only three companies—Wuhan, Tesla, and BYD—had reached the break-even point. Gasoline vehicle manufacturers complained that new energy vehicle manufacturers were losing money on every car they sold, a truly disheartening situation.

Not all models under the Weilai brand are profitable. Currently, the Aion series and Zhidou series are losing money. In addition, the Xinghe series has not yet reached the break-even point, and the E series is also only moderately profitable.

The real money-makers are the Exeed series and the L series, which have seen explosive sales growth. The Exeed series wins by volume, while the L series is the real cash cow.

The L series generated over 450 billion yuan in revenue in 2022. This revenue accounted for more than 10% of Weilai Auto's total revenue. Even with price reductions across the entire L series, the overall gross profit margin was maintained at over 20%.

Stable revenue and cash flow support Weilai Auto's R&D investment, and the profitability of range-extended electric vehicles has attracted market attention, with more and more automakers starting to invest in range-extended electric vehicles.

"There is no need to compare them. The two companies are different in nature, but both are excellent companies."

Wei Lailiang's eye-popping financial report was the focus of discussion over the weekend. The heated debate that had been sparked by the price cuts and guarantees was indeed drawn back to the topic. However, some groups were also comparing the revenues of the two companies.

The loss of overseas markets is the main reason for the severe decline in Chrysanthemum's revenue. However, Tan Jincheng believes that Chrysanthemum can overcome this difficulty. Once the self-developed chip achieves a breakthrough, revenue growth is inevitable.

Weilai is also an excellent company, but compared to Juhua, it will be difficult for Weilai to achieve significant growth.

Jinsheng New Era's market share has basically been determined, and the lithium battery industry has basically entered a period of overcapacity. It is now virtually impossible for the company to maintain high-speed growth. In the next few years, Jinsheng New Era can only maintain its revenue in the range of 3000 billion to 4000 billion yuan.

One day, new energy vehicles will also enter the stock market, and the growth of Weilai Auto will also be limited. The growth in 2022 was phenomenal, and there will never be such a good year again.

"Stop responding. Too many responses will only cause more trouble. Let's study high stock dividends instead."

The calls for high stock dividends are growing louder and should indeed be taken seriously. While high stock dividends like those of LeEco might be considered exploitative, they are not necessarily a problem when overall valuations are low.

Of course, after repeatedly rejecting the demands of capital tycoons, a high stock dividend can be considered a form of balancing act.

"Let's all talk about it, how much should we set for a high stock dividend?"

(End of this chapter)