It's NIO again!In the past two months, NIO has been the focus of news many times in a row. Unlike the last two announcements of new strategic partners, this time the focus is on real gold** – on December 18, NIO announced a strategic investment of about $2.2 billion from Abu Dhabi CYVN Holdings, and the deal is expected to close in the last week of this year.
For NIO, which has reached a crossroads in its development, this is not only a crucial investment, but also a shot in the arm for confidence.
What kind of future will NIO have?In the last days of 2023, the answer seems to have been revealed.
After experiencing rapid progress in the past few years, NIO in 2023 has come out of a V-shaped reversal - at the beginning of the year, NIO once fell into the predicament of declining sales and revenue exhaustion, and in the second half of the year, with the good feedback on terminal price reductions, NIO ushered in a significant recovery in sales, and the third quarter financial report released not long ago showed that NIO delivered 55,432 vehicles in the third quarter of 2023, a year-on-year increase of 754%, a greater increase of 1357%。
Compared with the fact that only five or six thousand vehicles could be delivered in one month at the beginning of the year, NIO's monthly delivery volume has now rebounded to the level of nearly 20,000 vehicles, and the recovery is obvious. At the same time, NIO in the third quarter has significantly improved in key indicators such as revenue, profit and bicycle profit compared with the first half of the year.
However, if compared with the ideal car that is also a "new force", NIO not only sells only one-third of the former, but also is far behind in the capital market by the soaring ideal - recall that more than two years ago, the strong NIO led China's new energy car companies in the US stocks, and the stock price reached a peak of nearly $70, but the ideal was only more than $30;Now, Ideal has stabilized its stock price of more than $30, while NIO has only $8 left, and its market value is only half of ...... Ideal
The re-favor of UAE capital proves at least one point that NIO is not worthless, but is seriously undervalued.
UAE CYVN Holdings, through its affiliate CYVN, entered into a share subscription agreement and invested a total of US$2.2 billion (about 15.7 billion yuan) in cash, which was subscribed for at a purchase price of 29.4 billion new Class A ordinary shares of the Company. Upon completion of the transaction, CYVN will beneficially hold approximately 201%。
Founded in 2022, UAE CYVN is a majority-owned investment institution in Abu Dhabi, UAE**, with a strategic focus on the smart mobility industry. It is worth mentioning that this is the second time this year that the UAE CYVN has "** NIO." In July this year, the UAE CYVN has made a 7$38.5 billion in strategic equity investment. In addition, CYVN of the UAE also acquired certain Class A ordinary shares of NIO from an affiliate of Tencent Holdings*** for a total consideration of 3$500 million.
After two large capital injections, the title of NIO's largest shareholder has also quietly fallen to the head of CYVN in the United Arab Emirates. After closing, UAE CYVN will become the largest single shareholder of NIO. However, NIO has a diversified voting share structure, and with super voting shares, the founder Li Bin is still the actual controller of NIO.
Li Bin said that with the strengthening of its balance sheet, NIO is fully prepared to cope with the increasingly fierce competitive landscape, and continues to improve its execution efficiency and systematization capabilities while strengthening its brand positioning, improving its sales and service capabilities, and making long-term investments in core technologies. "We are confident that NIO will further strengthen its leading position in the transformation of the global automotive industry. ”
In the field of new energy vehicles, in addition to investing in NIO, Middle East ** has also invested in Human Horizons, Tianji Automobile, etc. As Europe and other countries have successively announced the ban on fuel vehicles, the Middle East "local tyrants" who are based on oil are also facing transformation, and they have begun to invest in value around the world with a large amount of money. China's new EV manufacturers are both new energy and high-tech, and are generally listed on the US stock market, which is more global than their own brands, which is naturally in line with their general investment direction.
The large injection of funds from the Middle East is another major news about NIO after it announced in November that it had reached a battery swap cooperation with Changan and Geely, and bought a manufacturing base in Hefei with JAC. After sharing the cost of the battery swap network through cooperation, ending the OEM production model, and officially having independent production qualifications, NIO's future development blueprint is clearer.
After NIO announced that it would open up the battery swap network and technology, the circle of friends between NIO and battery swap technology has expanded rapidly, and the doubts about the battery swap technology route have been greatly eliminated. NIO will not only have the opportunity to get out of the current predicament faster, but will also have the opportunity to expand its business territory. The re-favor of UAE funds proves the rationality of NIO's previous series of actions, and also proves that NIO's future development is still optimistic about the outside world.
At the same time, with the injection of capital from the UAE, entering the market of more Middle Eastern countries, including the UAE, has also been put on NIO's agenda for next year. NIO's internationalization and globalization will also accelerate again - since its inception, NIO has hoped to position itself in globalization. The injection of overseas capital is conducive to NIO to further strengthen its global brand label, break down the best barriers, and facilitate its products to go global.
Of course, while optimistic about NIO's development, a problem that cannot be ignored is still the cash flow and profitability problems that have plagued NIO for a long time. The financing of about 15.7 billion yuan is basically the same as NIO's loss of about 16 billion yuan in the first three quarters of 2023. At the same time, NIO's third quarterly report showed that as of September 30, 2023, NIO's cash and cash equivalents, restricted cash, short-term investments and long-term time deposits were 45.2 billion yuan (US$6.2 billion). For reference, NIO's net loss for the whole of last year was 14.4 billion yuan. In other words, if NIO can't reverse its losses, the funds on its books will only be enough to burn for another three years at most - for NIO, which has burned countless dollars, this amount of money can be described as a relief in the snow, but it is still not enough to completely alleviate its liquidity pressure in extreme conditions.
Through internal and external cooperation, the two pillars of technology and products are connected, and the future of NIO is still promising.
But the premise is that NIO will survive in the fierce domestic competition for at least the next two or three years and not fall behind. ET9 is about to be released, so it's quite crucial;And the "Alps", a sub-brand of NIO that is expected to be unveiled next year, is also attracting special attention.