On September 2nd, Baic Bluepark announced that its subsidiary plans to publicly increase its capital by no more than 10 billion yuan. "This capital increase will help enhance the company's competitiveness and optimize its capital structure, which is in line with the interests of all shareholders," said Baic Bluepark. Regarding the question of whether to invest in Yingwang, the investor relations department of Baic Bluepark stated, "There is currently no plan, and investing in Yingwang is a strategic-level matter."
According to Cailian Press on September 3rd, Baic Bluepark is preparing ahead of time for its deep cooperation with Huawei. On September 2nd, Baic Bluepark announced that in order to meet the business development needs of its subsidiary and optimize its capital structure, its subsidiary Baic New Energy plans to increase its capital and expand its shares by publicly introducing strategic investors through the Beijing Property Rights Exchange. The increase in capital will not be lower than the evaluation result filed in advance, and the amount of the increase will not exceed 10 billion yuan.
It is reported that under the assumption of continued operation as of the evaluation reference date, based on market-based valuation, the total equity value of Beijing New Energy shareholders is 25.716 billion yuan, compared to the equity of 6.839 billion yuan belonging to the parent company's owners, with an assessed value increase of 18.877 billion yuan and an increase rate of 276.03%. Baic Bluepark also disclosed that the shareholder Beijing Automotive intends to increase its capital to its subsidiary Baic New Energy by an amount of 2 billion yuan.
"This capital increase will help enhance the company's competitiveness and optimize its capital structure, which is in line with the interests of all shareholders," said Baic Bluepark. Regarding the question of whether to invest in Yingwang, the investor relations department of Baic Bluepark stated, "There is currently no plan, and investing in Yingwang is a strategic-level matter, and it also involves a relatively large amount. If there are related operations, it not only needs to comply with the procedures of listed companies, but also needs to be reported to Baic Group and the Beijing State-owned Assets Supervision and Administration Commission."
"The cooperation between Baic Bluepark and Huawei may bring support in various aspects such as technology and brand, which will help alleviate some pressure," said an industry insider close to Baic New Energy. However, it is my personal judgment that this capital increase should not be because of investing in Yingwang. "Because the valuation of Yingwang is very high, investing in a small stake would require a large amount of money. This capital increase should mainly be used for the company's own development."
It is worth noting that on August 23rd, regarding the question of whether Baic Bluepark would invest in Huawei Yingwang, Baic Bluepark's Secretary to the Board of Directors, Zhao Ji, said that the company has paid attention to the situation of Eva T’s investment in Huawei Yingwang, and the company is firmly betting on cooperation with Huawei at the strategic level. "We are now one of Huawei's 'Four Boundaries' and our products have also occupied the middle and high-end markets. At present, Baic New Energy has a reserved capacity of 0.3 million vehicles in the Enjoy Boundary SuperFactory, and the depth of cooperation between the two parties will depend on how deep it can go." Zhao Ji said.
This is not the first time the company has increased its capital. On December 29, 2022, Baic Bluepark announced that it would increase its capital to its subsidiary Ji Hu Automobile in proportion to its shareholding. The total amount of the capital increase was 5.501 billion yuan. From 2020 to 2023, Baic Bluepark incurred losses of 6.48 billion yuan, 5.24 billion yuan, 5.47 billion yuan, and 540 million yuan, respectively. In addition to the loss in the first half of 2024, the cumulative loss in four and a half years reached 25.161 billion yuan.
From the performance of Baic Bluepark, it urgently needs a booster. According to the 2024 semi-annual report released by Baic Bluepark on August 26th, the company achieved operating revenue of 3.741 billion yuan, a year-on-year decrease of 35.16%. The net profit attributable to shareholders of the listed company was -2.571 billion yuan, compared to -1.979 billion yuan in the same period of the previous year, and the loss expanded year-on-year. The cumulative sales of new cars in the period were approximately 0.028 million vehicles, which showed a significant decline compared to the sales volume of 0.0352 million vehicles in the same period last year.
"The main reason for the decline in revenue in the first half of the year was the decrease in vehicle sales, which led to a year-on-year decrease in income." At that time, BAIC BluePark admitted in its performance report that the reason for the company's loss in the first half of 2024 was twofold. On the one hand, the competition in the new energy vehicle market has become increasingly fierce, with price wars intensifying and squeezing profit margins. On the other hand, the company continues to invest in technological research and development, brand channel construction, brand sharpening, and operational efficiency improvement in order to promote the development of its products towards high-end. Therefore, this has had a certain impact on the company's short-term performance.
The sales increment of new products may become a "lifesaver" for BAIC BluePark. Previously, Zhang Jianyong, the chairman of BAIC Group, said at the Hongmeng Intelligent Travel Enjoyment S9 and Huawei Full-Scene New Product Launch Conference that Enjoyment S9 is regarded as the core strategy and elevated to the highest level. All in Enjoyment S9.
According to the Environmental Impact Report of the Pure Electric Passenger Vehicle Project of Beijing New Energy Automobile Co., Ltd. released by BAIC BluePark, the projected total sales volume of the C71KB-F01 product (Enjoyment S9), which is a collaboration between BAIC New Energy and Huawei, during its lifecycle (5 years) is expected to reach 0.48 million units. Among them, the estimated sales volumes from 2024 to 2028 are 0.06 million, 0.12 million, 0.12 million, 0.096 million, and 0.084 million units, respectively.
"Whether Enjoyment S9 can help BAIC BluePark turn losses into profit depends on the market performance and sales of the product." Industry insiders believe that if Enjoyment S9 can gain a foothold in the market, it can certainly help BAIC BluePark reduce losses and even achieve profitability through high-profit sales. However, considering brand loyalty and market competition in the high-end market, there is still uncertainty about the market performance of Enjoyment S9."