share_log

灰熊做空蔚来,摩根斯坦利、摩根大通、大和等国际大行驳斥:香港上市时BaaS模式已获尽职调查

Grizzlies shorted Nio, and major international banks such as Morgan Stanley, J.P. Morgan Chase, and Yamato refuted it: the BaaS model had been duly investigated when Hong Kong went public

Zhitong Finance ·  Jun 30, 2022 21:05

On the evening of June 28, the US shorting agency Grizzly Research (Grizzly) released a report saying that NIO (09688) had exaggerated revenue and net profit margins through accounting methods, thus meeting market expectations. The Grizzly move triggered rebuttal from many major international banks, including institutions such as Morgan Stanley (Morgan Stanley), JP Morgan (JP Morgan), and Daiwa Capital Markets (Daiwa Capital Markets), all released reports saying they did not support the findings of Grizzly Research's report.

Major international banks believe that Grizzly Research raised related questions about BaaS, misinterprets the BaaS model and confuses related concepts and data.

According to public information, as of 2021Q3, Wuhan Weineng Battery Asset Co., Ltd. (hereinafter referred to as “Weineng”) held 40,053 BaaS battery packs and packaged 19,000 BaaS orders into derivatives to issue ABS financing. Weineng can continue to issue more ABS using surplus batteries or future batteries (from new BaaS subscribers) as the underlying asset to expand its future asset portfolio.

Grizzly misunderstood that Weineng had 40,053 battery packs, but only 19,000 BaaS orders, so all inferences relating to oversold battery packs, inflated revenue, and gross profit did not hold true.

According to Grizzly Research's shorting report, as of September 2021, NIO and Weineng had sold 40,000 batteries through related transactions, and according to the Weineng ABS prospectus, the number of BaaS orders for ABS was 19,000. Therefore, it is believed that NIO was excessively selling batteries to Weineng, thereby exaggerating its operating income and net profit.

On this issue, Daiwa Capital Markets released a report explaining the appropriateness of relevant business data. Among them, Weineng revealed that the purpose of its BaaS orders (19,000) was for ABS financing, while the 19,000 BaaS orders should only be used for financing for some users, not representative of Weineng's total number of BaaS orders. At the same time, Daiwa Capital Markets estimates that according to NIO's sales volume from the fourth quarter of 2020 to the third quarter of 2021 (84,000 units), as of September 2021, NIO could have 40,000 BaaS users (nearly 50% BaaS purchase rate).

In JP Morgan's report, analysts suggest that Weineng can continue to issue more ABS using surplus batteries or future batteries (from new BaaS subscribers) as the underlying asset to expand its future asset portfolio. Relevant disclosures indicate that every battery owned by Weineng has a corresponding basic subscriber.

According to public information, Weineng currently has 16 institutional shareholders, including NIO China, with the latter holding 19.8% of the former's shares. With a large number of shareholders, it is not easy for NIO to unilaterally control Weilai to carry out false transactions. Moreover, according to Weineng's public information, it is more inclined to maintain operational independence.

The business logic of the BaaS model is clearly explained in NIO's Hong Kong and Singapore listing documents and 2021 financial report.

Regarding NIO's BaaS service, in its prospectus to the Hong Kong Stock Exchange in February of this year, NIO explained the relevant business model in detail. According to the prospectus, after purchasing a battery pack from NIO, Weineng has the right to charge consumers a monthly battery fee throughout the life cycle of the battery asset. During the listing process on the Hong Kong Stock Exchange, the business model and the revenue associated with selling battery packs to Weineng were confirmed, due diligence was carried out in accordance with the requirements of the regulatory authorities, and the financial statements were regularly audited.

Industry sources said that power exchange and battery leasing, similar to BaaS, are actually the business model of battery banks. They are quite common in the domestic new energy industry. It is also common practice for car companies to set up related enterprises for this purpose. Among them, car companies such as Geely, Changan, and BYD will also successively lay out power exchange services this year and promote them in cooperation with the vehicle sales business. According to Grizzly Research, a similar business model for domestic NEV companies no longer exists. Grizzly's question clearly has serious misunderstandings about the battery bank business model.

In fact, after entering the capital market, more and more innovative companies are more likely to be targeted by shorting agencies. According to statistics from industry insiders, Tesla is currently one of the most frequently shorted individual stocks.

Judging from past information, Grizzly Research has shorted innovative Chinese companies many times, including brands such as SPI Lvnengbao, Betta, and Ruineng New Energy. According to Grizzly Research's official website, almost half of the shorting reports involved innovative Chinese companies.

Other professional investors believe that shorting agencies such as Grizzly Research target enterprises in a period of rapid growth, use some professional data to influence inexperienced investors, and use changes in stock prices on the day of the shorting report to conduct single-day transactions for profit.

Regarding NIO's long-term market performance, Morgan Stanley released a report saying, “Although sluggish industry sentiment has led to a decline, with the help of a strong product line, we believe NIO's increase in sales volume in June and good sales trends in the second half of the year will revive investors' confidence in the company's operations and trigger a rebound in stock prices.

According to reports, NIO launched its first sedan ET7 this year. This is the first model of the NIO NT2 technology platform to go offline. Compared with similar fuel vehicles or plug-in hybrid vehicles, the NIO ET7 has better power performance and higher intelligent configuration. In addition, the ES7 smart electric midsize and large SUV, which went offline with the NT2 technology platform, also had its world premiere in June. With the introduction of new cars and the upgrade of old models, NIO's overall sales volume is expected to increase further in the future.

At the time the rebuttal report was published, Morgan Stanley believed that NIO was still attractive and gave a rating for increasing its holdings. Coincidentally, Daiwa Capital Markets gave NIO a purchase rating for the next 12 months.

The translation is provided by third-party software.


The above content is for informational or educational purposes only and does not constitute any investment advice related to Futu. Although we strive to ensure the truthfulness, accuracy, and originality of all such content, we cannot guarantee it.
    Write a comment