Photo courtesy of Times Financial Gallery Peng Chunxia Mapping **Times reporter Zhang Yifan.
Middle Eastern capital is accelerating its entry into China, and car companies are seizing the opportunity to replenish ammunition in a big way to cope with the increasingly fierce market competition.
On the evening of December 18, Abu Dhabi-based investment institution CIVN announced that it would further increase its stake in NIO, and the scale of the new round of strategic investment will reach $2.2 billion.
Li Bin, Founder, Chairman and CEO of NIO, said, "NIO is fully prepared to cope with the increasingly fierce competitive landscape." The deal received positive feedback from the market, and as of press time, NIO's U.S. stock rose more than 10% pre-market.
Middle Eastern capital has stepped up.
On December 18, NIO (9866HK) announced that it has signed a new round of share subscription agreement with Abu Dhabi investment institution CYVN Holdings (hereinafter referred to as "CYVN"). Under the agreement, CYVN Holdings, through its subsidiary CYVN Investments, will make a strategic investment in NIO in cash aggregate approximately US$2.2 billion. It is understood that the closing of the deal is expected to be finalized in the last week of December.
Specifically, the new round of investment by CYVN is trading at 7. per share$50, the number of shares subscribed is 29.4 billion new Class A ordinary shares of the Company. As a comparison, the U.S. stock price of NIO in the latest trading day was 7$98 shares, Hong Kong stock ** price is 61HK$45 shares, the exchange rate conversion is about 7$88 shares. As of press time, NIO's U.S. stock rose more than 10% pre-market.
NIO expects that after this round of transactions, CYVN's shareholding in NIO will increase from 70% to about 201%；At the same time, at the time of the closing of the investment transaction in December, if the shareholding ratio is indeed not less than 15%, CYVN will have the right to nominate two directors to NIO's board of directors. NIO also revealed that after the completion of this investment, NIO and CYVN will continue to carry out strategic and technical cooperation in the international market.
The increased strategic investment in NIO is in line with our strategy to build a world-leading portfolio in the mobility sector. This investment demonstrates our confidence in NIO's unique positioning and competitiveness in the global smart electric vehicle industry." "We are pleased to be a long-term strategic partner of NIO and support its unremitting efforts in product innovation, technological breakthroughs and international market expansion," said Jassem Al Zaabi, Chairman and Managing Director of CYVN. ”
CYVN just became one of NIO's major shareholders in the second half of this year, and this investment is a further increase in NIO by the Abu Dhabi-based investment institution. In July this year, CYVN completed a strategic investment of about US$1.1 billion in NIO through a private placement of new shares and the transfer of old shares.
Since the beginning of this year, there has been a clear trend of Middle Eastern capital entering China. On December 11, the Qatar Investment Authority announced a strategic investment of nearly HK$1.6 billion in Kingdee InternationalIn October, Pony.ai, an autonomous driving company, announced that it had received a $100 million investment from the Kingdom of Saudi Arabia's New Future City (NEOM) and its subsidiary**NIF.
According to statistics, as of the end of the third quarter, Abu Dhabi Investment Authority has appeared in the list of the top 10 outstanding shareholders of 24 A-share listed companies.
Reserve ammunition rushed to the finals.
For NIO, this new investment is an important bargaining chip to help the company enter the finals.
Li Bin responded to the new round of investment, saying: "With the strengthening of its balance sheet, NIO is fully prepared to cope with the increasingly fierce competitive landscape, and continues to improve execution efficiency and systematization capabilities while strengthening brand positioning, improving sales and service capabilities, and making long-term investment in core technologies. We firmly believe that NIO will further consolidate its leading position in the transformation of the global automotive industry." ”
In the most recent fiscal quarter, NIO's report card was actually quite positive. Among them, 5 cars were delivered in the third quarter540,000 units, a year-on-year increase of 754%, a record for quarterly deliveries;Thanks to the increase in average selling price, the continuous reduction of vehicle costs and economies of scale, the company's gross vehicle gross margin increased to 11% in the third quarter of 2023.
However, the competition in the new energy vehicle market is also becoming more and more fierce. For NIO, on the one hand, although it achieved a quarter-on-quarter loss reduction in the third quarter, NIO's profit has not yet arrivedOn the other hand, NIO delivered a total of 15,959 new vehicles in November, with a monthly delivery volume of 12The year-on-year growth of 6% is lower than the cumulative 331%。
Li Bin has already judged the fierceness of market competition. At the first meeting held last week, Li Bin said that NIO's top priority is to ensure that the company survives first. "Staying alive is not NIO's only goal, the company is definitely going to survive and make it to the finals. To reach the finals, you still need to win this game. Li Bin believes that the automotive industry is an industry that needs strong products and strong technologies to drive, so NIO should be prepared to run a marathon.
This financing will provide a positive effect on NIO's ammunition reserves. Previously, the July transaction had effectively optimized NIO's balance sheet, and by the end of the third quarter, NIO's cash and cash equivalents holdings had increased significantly to $6.2 billion from $4.3 billion at the end of the second quarter.
Open battery swap network.
From the perspective of a marathon, NIO has indeed been making a series of adjustments recently. More overt actions include:
At the end of November, NIO successively announced that it had opened the battery swap network to Changan Automobile, Geely Holding and other companies, and the battery swap network of NIO had been exclusively enjoyed by NIO owners for a long time.
In early December, NIO acquired JAC's production equipment and assets for the manufacture of NIO models, and obtained independent car manufacturing qualifications. According to Li Bin, if NIO makes its own cars, the manufacturing cost will drop by 10%.
Earlier third-quarter reports showed that NIO's selling and administrative expenses and R&D expenses in the third quarter decreased by 18 percent compared with the second quarter1% and 213%, refined operation has become one of the priorities of NIO.
In the release of the results at the beginning of the month, Li Bin said that the company has recently completed a comprehensive plan for the company's two-year operating plan to identify key goals, priorities and action plans. At the same time, opportunities for organizational optimization, cost reduction, and efficiency improvement were identified. "NIO will continue to focus on advancing core technologies, developing key products, and enhancing sales and service capabilities," he said. We are confident in NIO's long-term competitiveness in the smart electric vehicle market. ”