The president was fired and the stock price plummeted, what happened to Leapmotor?

Mondo Cars Updated on 2024-02-01

Written by |Zhang Yu.

Edit |Yang Bocheng.

Title Picture |Wenxin is a style.

Soon after the beginning of 2024, Leapmotor encountered a personnel "**

On January 24, Leapmotor issued a statement saying that Wu Baojun's labor contract had expired and terminated on January 8, 2024, and the company would not renew his employment by resolution of the board of directors.

On January 25, Wu Baojun, the former co-founder and president of Leapmotor, posted a response to the rumors of resignation on the social ** platform, which mentioned: "Unfortunately, I had to leave Leapmotor, which I participated in the founding, I love Leapmotor very much, but due to the expiration of the labor contract, the company proposed not to renew the contract." The Board of Directors resolved by means of communication that he would no longer serve as the President of Leapmotor Technology and would continue to serve as a Director."

1. What is the secret reason for the co-founder's departure?

Wu Baojun's resignation began on January 23. At that time, it was the first to disclose the news that Wu Baojun, who was the co-founder and president of Leapmotor, had resigned. At the same time, Leapmotor will no longer have the position of president.

The next day, Leapmotor issued a statement in response to Wu Baojun's resignation, and Wu Baojun also responded the day after Leapmotor issued a statement, first expressing regret for leaving, and at the same time reviewing his achievements in three years and eight months, such as Leapmotor sold 10,000 units in 2020 and 4320,000 units, cumulative sales of 550,000 units, with sales of more than 14 by 202340,000 units.

Finally, Wu Baojun emphasized that "the president of a professional manager is also an employee, and employees are weak and helpless for a huge enterprise organization", and put forward three hopes for the company: I hope that the company will respect history and respect contracts; It should be lawful, reasonable and reasonable; Customers first, employees second.

Source: @吴保军 Weibo.

It is reported that Wu Baojun has worked in Peugeot Automobile, GAC Honda, GAC Toyota and other car companies, and has very rich experience in the automotive industry. Wu Baojun and Zhu Jiangming, founder, chairman and CEO of Leapmotor, began in March 2020, when Wu Baojun was invited to Hangzhou to test drive the new Leapmotor car and rushed to visit the Jinhua factory. In June 2020, Wu Baojun joined Leapmotor and became the co-founder of Leapmotor, and served as a director and president, responsible for Leapmotor's business development, marketing and manufacturing, and first-chain management.

According to another ** report, Wu Baojun also wrote on the social ** platform, "In essence, others are kings, and you are the general: Yang Xiu offended Cao Cao, you see what will happen." Han Xin's credit is so great, and in the end, he was not clicked by Liu Bang. Rabbits and dogs are cooked, and birds are hidden. This is almost always a historical necessity. The greater the credit, the more humble and loyal efforts must be made to give the company enough security. ”

On the whole, Wu Baojun's "three hopes" are intriguing, and it also suggests that there seems to be another hidden reason for his departure from Leapmotor. Under Wu Baojun's response, some netizens commented, "Zero Run has just improved, where is this?" "It seems that there is a story behind it", "Zero Run, is this unloading the mill and killing the donkey?"

Second, it has just received local state-owned investment

Shortly before Wu Baojun's resignation, Leapmotor had just received strategic investment from local state-owned assets in Zhejiang Province.

According to the announcement issued by Leapmotor, it was announced that it had won 65.9 billion Hong Kong dollars strategic investment, the capital is mainly **Jinhua City Industry** and Wuyi County Financial Investment. It is another strategic investment after joining hands with Stellantis Group to win an investment of more than HK$8.5 billion.

It is reported that the two strategic investors of Leapmotor are from the local state-owned assets of Jinhua City, Zhejiang Province, of which Jinhua City Industry ** is 60% owned by Jinhua Jintou Group, and Jinhua Financial Holding Investment, a subsidiary of Jinhua Jintou Group, holds 15% of the equity. The shareholders of Jinhua Jintou Group are Jinhua State-owned Assets Supervision and Administration Commission and Zhejiang Provincial Department of Finance. Wuyi County Jintou is wholly owned by the Finance Bureau of Wuyi County, Jinhua City.

After the completion of the subscription, the shareholding ratio of the largest shareholder group of Leapmotor will increase from 2347% to 2321%, Stellantis' stake is increased by 2126% becomes 2102%, Jinhua City's industrial ** shareholding from 086% to 122%, Wuyi County Jintou's shareholding rose from 0 to 074%。

At the same time, Leapmotor disclosed that the proceeds of the subscription will be allocated for R&D investment, marketing, production capacity improvement, working capital and general corporate purposes, of which about 40% will be used to expand and upgrade the smart electric vehicle portfolio, expand the R&D team, improve electrification technology, and strengthen the development of advanced automotive intelligent technologies such as autonomous driving and intelligent cockpit systems.

As soon as the front foot received financing, the back foot broke out in the resignation turmoil, will this have a negative impact on the future development of Leapmotor?

In fact, Wu Baojun has not participated in the operation of Leapmotor for a year, and in 2023, Leapmotor has experienced many major events, especially at the management level, such as Xu Jun taking the position of senior vice president and chief operating officer, and is in charge of sales and service; Zhang Liwei is the senior vice president and chief marketing officer, in charge of marketing and user operations, while Wu Baojun, who previously focused on the above business, has retreated to the background and is mainly responsible for brand strategy development and public affairs.

It can be seen that the process of "abandoning" Wu Baojun is a gradual process, and even if Wu Baojun leaves Leapmotor immediately, it will not have a significant impact on his existing business work.

Third, Leapmotor is still mired in long-term losses

Founded in December 2015, Leapmotor is jointly invested by Zhejiang Dahua Technology Co., Ltd. and its main founders, backed by Dahua Co., Ltd., a giant of security monitoring equipment, Leapmotor has achieved self-developed and self-produced electric drive, BMS, perception, computing, control and other electronic components, and has the ability to quickly mass produce iterations, which is also its core advantage different from other new car-making forces. According to Frost & Sullivan, Leapmotor is currently the only new energy vehicle company in China with global independent research and development capabilities.

In the prospectus, Leapmotor explained the concept of "global self-development": we have self-developed all the key software and hardware in the core system and electronic components of intelligent electric vehicles, realized the unification of the underlying interfaces, algorithms and data communication protocols, and built a unique model and capability to build a platform-based electronic and electrical architecture and vehicle architecture that can be highly reused between different electric vehicle models.

According to Zhu Jiangming, the global self-development is more high-end than the full-stack self-development proposed by Xpeng Motors, which only includes software, not hardware, and the hardware has to rely on a third party. The global self-development is built from the bottom to achieve independent research and development of software and hardware.

It should not be ignored that although the realization of independent research and development of software and hardware will help Leapmotor build competitive barriers and broaden its moat, it seems that the global self-research has not been transformed into competitiveness at this stage, and it is unknown whether the global self-research is suitable for Leapmotor at this stage and the actual effect it brings. As of now, Leapmotor is still mired in losses.

From 2019 to 2022, Leapmotor's net loss was 90.1 billion yuan, 1.1 billion yuan, 284.6 billion yuan, 510.9 billion yuan, in the first half of 2023, the net loss of Leapmotor is as high as 227.6 billion yuan, with a cumulative loss of more than 12 billion yuan in four and a half years.

Not only that, but Leapmotor's cash flow position also deteriorated sequentially. According to the financial report data, in the third quarter of 2023, the net cash generated by Leapmotor's operating activities was 1.4 billion yuan, compared with 276.2 billion yuan, the difference between the two reached 136.2 billion yuan. In terms of free cash flow, Leapmotor generated free cash flow of 10$1.8 billion, compared to the second quarter of 2023 (25.50.2 billion yuan) also saw a sharp decline.

But it is worth celebrating that in 2023, Leapmotor will deliver more than 14 new cars40,000 units, a year-on-year increase of 29%, ranking third among new car-making forces, second only to Li Auto and NIO.

In January 2024, Zhu Jiangming said that improving gross profit performance has become an important goal for Leapmotor in 2024. He said that Leapmotor's gross profit will turn positive from the third quarter of 2023, and in 2024, it must reduce its absolute loss and increase the average gross profit margin of each car.

At present, the competition in the new energy vehicle industry is fierce, and the performance of Leapmotor in the capital market is not satisfactory. As of January 29, the share price of Leapmotor has been 55 compared with the issue price of HK$48 shares7% to 21HK$25 shares.

In 2021, Zhu Jiangming once released the cruel words of "surpassing Tesla in 3 years" and "sales of 800,000 units in 2025".

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