Text |Brother Cai |Rao Yan sales have gone up, but losses have expanded, what should NIO do?
On March 5, Beijing time, NIO (NIOus，09866.HK) announced its results for the fourth quarter and full year 2023.
According to the financial report data, for the whole year of 2023, NIO's total revenue will be 55617.9 billion yuan (RMB, the same if not marked below), a year-on-year increase of 129%；The net loss for the full year was 207200 million yuan, an increase of -43 over the previous year5%。Adjusted net loss (non-GAAP) for the full year 2023, net of share-based incentive expense, was 18350.7 billion yuan, a year-on-year increase of -511%。
This year, NIO's deliveries were not optimistic. Data shows that in 2023, NIO will deliver 1600,000 units, a year-on-year increase of 37%, with a monthly average of less than 150,000 units, which is still far from NIO's expectation of "stabilizing at more than 20,000 units", is only 65% of the sales target.
As a bystander, it is difficult to guess what Li Bin thinks now, but the market is actually clear about the current situation.
At the 2023 earnings conference on March 5, Li Bin continued to look forward to the future of NIO, and he still believes in "long-termism".
But investors are clearly not selling, and the disappointment has been spreading since the earnings report. In the live broadcast room of Tiger**'s earnings conference, investors bluntly said, "Hurry up and find a way to increase sales." ”
There is a reason for investor disappointment. In the new year's earnings report, although the revenue is still growing, even "hitting an all-time high", the loss is still increasing.
It is difficult for NIO, which is positioned as a high-end company, to achieve a large increase in sales, unless NIO changes its brand strategy. Wang Qiang, a senior expert in the automotive industry, said bluntly that at the moment when the war is becoming more and more fierce, NIO needs to re-examine its positioning.
NIO is indeed trying to change, at the earnings conference, Li Bin revealedAlps, the second brand positioned as a Volkswagen, will be launched in the second quarter of 2024, and the new brand will be mainly responsible for "volume".
At the same time,NIO will also increase its layout in third- and fourth-tier cities.
But these are not easy for investors. Wang Qiang bluntly said that under the current fierce competition of new energy vehicle companies, Alps, which is positioned in the range of 200,000 yuan, does not have an advantage, and it is not yet known whether it can achieve volume growth.
Li Bin is clearly feeling the pressure, and he admitted in early 2024 that although the company has made progress in many areas, such as launching second-generation platform products, releasing NIO mobile phones, and reaching cooperation with Changan and Geely on battery swap stations, the overall performance has not met expectations.
NIO also knows that the competition will be more fierce than imagined. Li Bin once emphasized in an internal letter that the next two years will be more drastic changes in the automotive industry and more fierce competition. He asked employees to be mentally prepared to face challenges head-on, and stressed the need to use investors' funds efficiently.
The more high-end brands sell, the more they lose, and the future of the second brand is uncertain, what will NIO do to achieve the future?
The more you sell, the more you loseThe more you sell, the more you lose, and the more you sell, the more you lose, which seems to have become the "curse" of NIO.
In 2023, NIO's revenue will grow again and hit a new high. According to the financial report data, for the whole year of 2023, NIO's total revenue will be 55617.9 billion yuan, an increase of 129%。But it's worth notingThis is the lowest revenue growth rate since NIO's listing.
What's more, losses are still mounting. For the full year of 2023, NIO's net loss attributable to shareholders reached 20.7 billion yuan, an increase of 4350%。In the past six years, NIO has lost a total of 86.2 billion yuan.
In 2023, NIO's full-year deliveries are indeed still growing, up from 12250,000 units increased to 160,000 units, an increase of 3070%。
NIO's full-year car sales also increased from 455 in 20220.7 billion yuan, an increase to 4925.7 billion yuan, a year-on-year increase of 82%。
This means:For every car sold by NIO, it lost 130,000 yuan, and the more it sold, the more it lost.
The fundamental reason for the more you sell, the more you lose, is that the cost is high.
Li Bin is very good at spending money, which is almost the consensus of the industry. Li Bin has also done a lot of things, such as the production of mobile phones, self-developed batteries, self-developed lidar chips, and so on.
This also makes NIO's cost increase significantly. In 2022, the cost of sales was 4412.5 billion yuan, a year-on-year increase of 505%。By 2023, NIO's annual cost of sales will be as high as 5256.6 billion yuan, an increase of 191%。
R&D expenses in 2023 remain high, reaching 1343.1 billion yuan, a year-on-year increase of 239%；Selling, general and administrative expenses up to 1288.5 billion yuan, an increase of 22 percent year-on-year3%。R&D expenses in the fourth quarter alone amounted to 39700 million yuan, significantly exceeding market expectations of 33700 million.
In fact, this is the second consecutive year that NIO's R&D expenditure has exceeded 10 billion yuan, and in 2022, NIO's annual R&D expenditure will be 1083.6 billion yuan.
In the case of high costs, NIO's gross profit margin is not optimistic.
In the fourth quarter of 2023, NIO's gross profit margin was 119%, which was lower than the market had expected.
In fact, starting from 2022, NIO's gross profit margin of automobiles is not ideal, and it is even as low as 39%。Subsequently, the gross profit margin of automobiles has been restored, and by the third quarter of 2023, NIO's gross profit margin has increased to 11%.
NIO is interested in continuing to improve the gross profit margin of automobiles, and at the first meeting of the third quarter report of 2023, NIO gave guidance to achieve a gross profit margin of 15% in the fourth quarter.
The market is also full of expectations for NIO's gross profit margin in the fourth quarter, and the forecast given is that it can be restored to 136% due to the quarter-on-quarter increase in gross margin due to the decline in battery costs and the increase in the proportion of EC6 with higher unit prices in the sales structure, which offset the drag on gross margin due to some discounts. ”
In order to improve the gross profit margin, NIO has also taken some measures, such as personnel adjustments. In 2023, Li Bin issued an all-staff letter to reduce jobs by about 10% and accelerate resource efficiency, and said that in the future, NIO will postpone and cut projects that do not improve financial performance within three years to ensure the company's long-term competitiveness. According to Li Bin's calculations, these measures will save NIO 2 billion yuan in 2024 as the number of employees decreases.
In December 2023, NIO also spun off its in-house battery project, which was assessed as not being able to improve gross margin for three years, so it "manufactured batteries through contract production to reduce costs."
But for now, these measures are far from enough. In 2023, NIO's automotive gross profit margin and overall gross profit margin will still decline significantly.
In 2023, NIO's full-year gross profit margin for automobiles will only be 95%, while in 2022, the figure was 137%, and in 2021 it was even higher at 201%。
For the full year of 2023, NIO's overall gross margin will be 55%, compared to 10 in 20224%, and in 2021, NIO's gross profit margin will be 189%。
Overall, in the past three years, NIO's gross profit margin and overall gross profit margin have continued to decline.
NIO needs more moneyJudging from the cash reserves, Li Bin is indeed rich.
Li Bin, who went public with tens of billions of yuan in cash, has always had considerable cash reserves. In 2023,NIO's cash reserves reached 57.3 billion yuan, a significant increase of 12.1 billion yuan from the previous quarter.
But is NIO, which has been losing money year after year, really rich? From the financial reports of previous years, some doorways may be seen.
According to the data, NIO's total assets in 2023 have reached 11738.3 billion yuan, but the debt has also increased from 68.6 billion in 2022200 million yuan increased to 8778.7 billion yuanThe debt-to-asset ratio increased from 71 in 202228% to 7479%。
If you just look at the data of NIO, it may not be intuitive, then you can take a look at this indicator of peers.
Tiger**'s data shows thatDuring the same period, Tesla (tsla.usThe debt-to-asset ratio is 4034%, ideal (li.us) is 5778%, NIO's asset-liability ratio is significantly higher than these two.
In fact, since its listing, NIO's asset-liability ratio has remained high, and in 2019, NIO's asset-liability ratio was even as high as 13307%。Although it improved in 2020, it dropped to 4169%, but in the last three years, it has risen again.
From 2021 to 2023, NIO's asset-liability ratios are: 79% in the same period, Tesla was. 26% and 4034%, ideal. 78% and 5778%。NIO's asset-liability ratio has always been much higher than that of the above two.
NIO, which has a high asset-liability ratio, obviously needs more money to be engaged. Either raise money or make your own blood.
Li Bin's ability to raise funds is obvious to all. According to incomplete statistics, since its establishment in 2015, NIO has raised more than 115 billion yuan. Even in 2023, when the general environment is not good, Li Bin still receives two investments from Middle East capital CYVN, totaling about 21 billion yuan.
But capital is in pursuit of returns, and it is not yet known how much investment Li Bin can get in the case of NIO's continuous losses.
For the market, NIO needs to improve its hematopoietic capacity. Unfortunately, the cash flow generated by NIO's operating activities is not performing well.
According to data from Oriental Wealth, as of Q2 2023, NIO's operating cash flow is -1160 billion yuan. And in 2022, this figure is -386.6 billion yuan.
In the case of a high asset-liability ratio and continuous losses in performance, even if NIO now has 57.3 billion yuan on its books, it is still unknown how long NIO can support it at the current rate of "continuing to burn money". At least judging from the current situation, the future of NIO is hardly optimistic.
What is the future of NIO? Li Bin admits that the market is "fiercely competitive" and is well aware of NIO's situation.
In the past year, NIO's retail sales have been surpassed by major new energy manufacturers, and NIO ranked 9th in the 2023 retail sales ranking of new energy manufacturers announced by the China Passenger Association.
In Wang Qiang's view, at the moment when the ** war is becoming more and more intense, the "high-end" NIO has long had no advantages.
However, Li Bin still adheres to the main theme of "high-end strategy", and he stressed that NIO's main brand will not launch cheaper cars than ET5, and new cars will also be more expensiveFor the main brand, "we will not change the volume in the way of the first battle".
As for how long the high-end can last, perhaps Li Bin already has the answer in his heart and is trying to change. For example, in 2023, NIO will already give a price reduction discount of more than 20,000 yuan for its main models.
However, Li Bin still said that the 2024 model will not increase the price to avoid directly entering the "** war".
Of course, Li Bin is also aware of the importance of the low-price market, and he said at the ** meeting that the new brand for the mass market will be launched in the second quarter of 2024 and delivered on a large scale in the fourth quarter, while the second brand is mainly responsible for the "task of volume".
Li Bin made it clear that the new brand with the battery swap model will be benchmarked against Tesla's Model Y, which currently has the largest sales volume, but the price will be about 20% lower than it.
However, it is obviously unknown what the future market expectation of the new brand will be, "With the fierce competition in the market, the pricing of the new NIO brand is critical. Wang Qiang said bluntlyIf the pricing is too high, the market will not sell it, and the pricing is too low, which will pull down NIO's gross profit margin, which is a dilemma for NIO.
Not only that, NIO is also focusing on solving the problem of channel sinking and improving sales efficiency in third- and fourth-tier cities.
At the meeting, Li Bin revealed that NIO is trying a variety of ways to efficiently sink channels to third- and fourth-tier cities, and plans to deploy more battery swap infrastructure in these markets this year to enhance user experience and competitiveness.
However, the market is still worried about the future of NIO.
After the release of the earnings report,BOCOM International released a research report and lowered the target price of NIO from 6US$6 HK$52 to HK$51 USD 40HK$3, due to "the independent sales network of the sub-brand, as well as the development expenses of new models, the expected loss will remain high".
If the new brand can't bring volume growth, how long can the money in NIO's account be "burned"? Will new funds be raised in the future? NIO needs to give answers to these questions as soon as possible, and the market is running out of time for NIO. **10,000 Fans Incentive Plan (Part*** is invaded and deleted on the Internet.) ）
Wang Qiang is a pseudonym in the article. ）
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