As the new energy vehicle market game enters the white-hot stage, the original shareholders of new car companies have withdrawn, new capital has entered, and the rotation of new and old shareholders has become a topic of concern in the industry.
Text: "Autobots" Zhang Heng.
On December 19, CYVN invested in NIO again, and founder Li Bin lost his position as the largest shareholder. On December 16, Alibaba**Xpeng Motors made the latter's stock price**. And Tellantis Group's acquisition of Leapmotor and Wang Xing** Li Auto has also happened in recent months.
One of the most important aspects of new car manufacturers is that their shareholding structures are complex. They are more inclined to equity financing rather than debt financing of traditional car companies, so there is frequent rotation of new and old shareholders. This was not often seen in the automotive industry in the past.
Li Bin lost his position as the largest shareholder
On December 19, NIO announced that Abu Dhabi's CYVN Holdings will subscribe for $2.2 billion in cash9.4 billion new Class A ordinary shares. This is the second time that CYVN has taken a heavy position in NIO after investing about $1.1 billion in June. The Middle East petrodollar is buying up Chinese new energy car companies.
Upon completion of the transaction, CYVN will effectively hold 20 percent of NIO's total issued and outstanding shares1%, becoming the largest shareholder of NIO. NIO founder Li Bin's shareholding has been further reduced. However, due to NIO's adoption of the A, B, and C equity structures with weighted voting rights, Li Bin has 1:8 super voting rights through Class C equity, and although he is no longer the largest shareholder, he still actually controls NIO.
For this financing, NIO can be said to have come prepared. Li Bin first answered hundreds of reporters' questions on December 15, and then drove from Shanghai to Xiamen on December 17 to test a 150-degree battery pack for 14 consecutive hoursAt NIO Day on December 23, NIO will also unveil its latest flagship model, the ET9.
Li Bin's actions are all aimed at enhancing NIO's brand value and market influence in order to cope with the next tragic fight in the new energy vehicle market. Li Bin also said in an internal letter that NIO will not exchange price for volume, but will adhere to high-end positioning and differentiation strategyAt the same time, it is also necessary to open up sources and reduce expenditure, divest loss-making businesses, and improve operational efficiency and profitability.
NIO's ability to raise funds has always been one of its greatest strengths. Since its establishment in 2015, NIO has raised more than 115 billion yuan, including well-known VC PE such as Hillhouse, Shunwei, CICC, and Sequoia, as well as CVC of top Internet companies such as JD.com, Tencent, Xiaomi, etc., as well as support from Hefei** and Middle East capital. NIO has used the funds to build its own product line, sales network, battery swap stations, battery manufacturing and other business segments.
However, financing comes at a price, and every penny is equity or bonds. This means that NIO's shareholding structure will become more and more complex, and it will face more stakeholder influences and constraints. After NIO was listed on the U.S. stock market, it was questioned and litigated by U.S. regulators and investors, and had to bear exchange rate risks and political risks.
NIO's financing has also raised concerns about China's new energy vehicle industry. In the context of the accelerated transformation of the domestic auto industry, can Chinese car companies resist the "first and acquisition" of foreign capital?
Each has its own reasons
Compared with the Middle East oil capital, the early investment in the capital of new car companies has accelerated, including Tencent, Weilai, Wang Xing, Li Auto, and Ali Xiaopeng.
Alibaba**Xpeng Motors, making the latter's U.S. stock price **754%, Hong Kong stock price **666% (December 18).
Alibaba is one of Xpeng's earliest investors, having invested billions of dollars since 2015. However, Xpeng Motors is still in a loss-making state and cannot bring stable cash flow to Alibaba.
Although Xiaopeng said that Ali ** is implementing the strategy of returning shareholders to shareholders by realizing the investment communicated in its third quarterly report, the capital market does not buy it, believing that it is a concern about the prospects of Xiaopeng Motors, and it also reflects the high valuation of Xiaopeng Motors and the need to return to rationality.
Similarly, in September 2023, Meituan Wang Xing has cashed out 3HK$100 million. This is Wang Xing's second ** ideal car in 2023, and it is a double-line operation of US stocks and Hong Kong stocks.
Wang Xing led the C and D rounds of Li Auto in 2019, and personally subscribed for $20 million in ADS after its listing, making him a key investor in Li Auto. However, half a year after Li Auto's U.S. and Hong Kong stocks were listed, he began to run in small steps - the family trust was running in small steps, and the company's holdings were basically unchanged, which was equivalent to the company covering personal retreat.
For Wang Xing, this is a transaction, and any strategic investor and financial investor is told to the outside world. The cost of its shareholding in Li Auto is very low, and the profit can reach more than 10 times. If from the perspective of a financial investor, a profit of 10 times is not **, no matter who has to ask, are you stupid?
It is worth mentioning that in the third quarter, U.S. financial institutions focused on selling new car companies**. The result of this wave of financial institutions advancing and retreating together will inevitably be a wave of "cutting leeks".
According to the disclosure information of the U.S. stocks, at the end of June 2023, NIO had 516 shareholding institutions, with a shareholding ratio of 2836%；Li Auto has 249 shareholding institutions, with a shareholding ratio of 918%；Xpeng Motors has 239 shareholding institutions, with a shareholding ratio of 1180%。
By the end of September 2023, NIO has 41 shareholding institutions, with a shareholding ratio of 031%；Li Auto has 15 shareholding institutions, with a shareholding ratio of 005%；Xpeng Motors has 20 shareholding institutions, and the shareholding ratio has dropped to 037%。
Dahua shares out of the zero running car
The case of taking advantage of the acquisition of new shareholders to liquidate the original shares is the acquisition of Leapmotor by Stellantis Group.
Stellantis Group acquired about 20% of Leapmotor for 1.5 billion euros, including new share subscription and old share purchase.
Dahua Co., Ltd. is the earliest investor of Leapmotor, and has obtained 943% equity. Zhu Jiangming, the founder, chairman and CEO of Leapmotor, is also one of the co-founders of Dahua Co., Ltd. and was the vice chairman of Dahua Co., Ltd.
It is worth mentioning that there is a high probability that Dahua shares will be cleared at one time because it has been on the US sanctions list. If Setllantis wants to bring the joint venture to the international market, it is necessary to draw a clear line with Dahua and avoid the risk of compliance. This is also an important reason for the liquidation of the original shareholders.
Despite the fact that the performance of the Stellantis Group in the global market is smooth. However, in the Chinese market, the Stellantis group has repeatedly failed. Due to the dissolution of its joint venture Changan PSA in China, the bankruptcy of GAC FCA, and the conversion of its DS and Jeep brands to imports, the influence of the Stellantis Group in China is much less than before.
In order to regain confidence and competitiveness in the Chinese market, Stellantis Group has developed an "asset-light" business model. At the same time, Stellantis is also looking to establish business partnerships with local Chinese EV companies to accelerate the group's electrification transformation.
For Stellantis Group, the acquisition of Leapmotor has a less obvious capital premium than "Wei Xiaoli", but it is more cost-effective, which can not only help the group enhance its competitiveness and influence in China, but also obtain the blessing of its full-stack self-developed technology.
Shareholder rotation is inevitable
2023 is destined to be extraordinary for the new energy vehicle industry.
The original capital is exiting, and the new capital is entering. Most of the original capital was venture capital before the listing of new car companies, and there was even seed investment, and now it has made a lot of money, and it is understandable to lock in profits. After all, the knockout competition of new energy vehicles is still continuing, and it is not good to increase or depreciate the equity held in the future.
Most of the newly purchased capital is enterprises that need new energy vehicle business, not only Volkswagen and Stellantis Group, but also Middle East Petroleum Capital also has the strategic goal of transforming the new energy industry.
With the continuous selling of original capital and financial investors, by the end of 2023, the stock prices of new car companies will return to the bottom range since listing, and new capital feels that it is cost-effective. Raw capital is based on the uncertainty of the future, and there is also a need to lock in profits, so the two scenarios are staged in the market at the same time.
Auto People believes that the shareholding structure of new car companies is conducive to attracting more capital and talents, improving innovation ability and market competitiveness, but it may also lead to conflict and dispersion of shareholder interests. Whether it is NIO, Xpeng or Leapmotor, the interests and demands of Internet shareholders and automobile manufacturing shareholders are completely different, which will bring uncertainty to the development of enterprises.
Equity financing for new car manufacturers is conducive to reducing financial costs and risks, and improving the adequacy and flexibility of funds, but it may also lead to dilution and dispersion of equity, especially excessive dependence and restriction on foreign capital. For example, NIO's equity financing, although it has provided it with huge financial support, is also facing the potential impact and intervention of Middle Eastern capital. Xpeng's equity financing, although it has introduced strategic cooperation with international auto giants such as Volkswagen, has also enabled early investors such as Alibaba**.
The rotation of shareholders of new automakers is mainly driven by the following three factors.
The first is the change in the development stage of new car manufacturers. From the start-up stage to the growth stage and then to the maturity stage, the development goals and strategic directions of car companies are constantly adjusting and changing, which requires different shareholders to provide different resources and support. Venture capital is needed in the start-up stage, strategic cooperation is needed in the growth stage, and market expansion is needed in the mature stage.
The second is the change in the valuation and earnings of new car manufacturers. As new car companies grow and expand, their valuations and profitability are also increasing and improving, which attracts more capital attention and investment, and also provides early shareholders with opportunities to exit and liquidate.
The third is the balance between internationalization and localization of new car manufacturers. With the acceleration of the internationalization process of new car manufacturers, it is also necessary to maintain sensitivity and affinity for the local market, which requires more support and cooperation from different capitals.
Therefore, the rotation of shareholders of new car companies is the inevitable result of their development stage and market environment, and it is also a necessary choice for them to seek more resources and cooperation. 【Copyright Notice】This article is the original manuscript of "Autobots", and it is not allowed to be unauthorized **.