With the listing of ideal and XPeng Inc. in the third quarter, the share prices of China's three new car-building powers have been soaring, with NIO Inc., ideal and XPeng Inc. all up more than 100 per cent since October.

If the timeline is lengthened, the new power of the three automakers will be remarkable. Ideal's share price has risen 219 per cent since its listing on July 30; XPeng Inc. has risen 220 per cent since its listing on August 27; NIO Inc. 's share price has risen an astonishing 110 per cent so far this year.

Behind the rise in stock prices is the substantial increase in market demand.

The China Association of Automobile Manufacturers reported that the performance of the new energy market was particularly outstanding in October, setting a new record for the fourth time this year. Sales of new energy vehicles in October were 160000, up 104.5% year on year and 13.9% month-on-month. Among them, sales of new energy passenger vehicles reached 148000, a year-on-year growth rate of 113.3%-among them, pure electric vehicles grew more rapidly, with a year-on-year growth rate of 128.8%, with sales reaching 122000 units.

The sharp increase in sales has also led to a substantial improvement in the performance of new energy vehicle enterprises. The latest data released by the National Bureau of Statistics show that car production increased by 11.1% in October, including a sharp increase of 94.1% for new energy vehicles.

The dawn of the new power of car building has arrived.

In the latest research report, founder Securities compares the development of the three new car-building forces horizontally and vertically from the aspects of third-quarter income, profit, cash flow, product positioning, production capacity, and intelligent driving technology, and believes that the dawn of the new car-building power has arrived.

The report, entitled "three Quarterly report of the New Power of car Building: dawn has arrived, is expected to see rapid revenue growth for the whole year" said that thanks to the high growth in vehicle sales and the sharp decline in subsidies to accelerate the withdrawal of low-end production capacity in the industry, new car-building forces with stronger competitiveness and better services continue to develop.

The total income of the three new car-building forces in 20Q3 reached 9.03 billion yuan in a single quarter, an increase of 44.3 percent over the previous quarter.Q4 revenue is expected to continue to grow, with NIO Inc., XPeng Inc. and ideal expected revenue of 63.5,22.0 and 3.25 billion yuan respectively in the fourth quarter.

Delivery data also continue to increase, and founder expects delivery by new forces to account for more than 10% of total new energy car sales for the whole year.

NIO Inc. delivered 5055 vehicles in October, a month-on-month increase of 7.4%. The delivery volume of M1M1M10 was 31430 vehicles.

The delivery volume of XPeng Inc. in October was 3040, down 12.6% from the previous month. The delivery of M1M1M10 was 17117.

The ideal October delivery is 3692 meme M1murM10 delivery is 21852 vehicles, an increase of 5.4% month-on-month.

Although there is still a gap between companies and overall earnings, gross margins have improved strongly as the advantage of economies of scale has been highlighted.

Among them, XPeng Inc. Q3 had a gross profit of 4.6% and became a regular employee for the first time.

The ideal Q3 gross profit margin was 19.8%, rising for three consecutive quarters.

NIO Inc. Q3 gross profit margin 12.9%, month-on-month increase of 4.5 pct.

In addition to the two indicators of income and profit, the operating cash flow of the three new car-building forces has improved significantly.

NIO Inc. 20H1 net operating cash outflow narrowed to 520 million yuan

XPeng Inc. 20H1 operating cash flow net outflow is 1.21 billion yuan

The ideal operating cash flow becomes regular in 20Q2, and Q3 continues to expand.

From a product point of view, the three new car-building forces focus on different market segments, but they are all transforming from contract factories to self-built factories to improve the control and control ability of product quality.

NIO Inc.: take the high-end line, the product is pure electric, SUV type car, 100 km acceleration time is the shortest; NIO Inc. is co-built by Jianghuai factory and is currently planning the second plant in Shanghai, with an estimated production capacity of 250000 vehicles in 2022.

Ideal: the price is the second, and for the added program drive, the SUV type car ranks second in 100 km acceleration; the ideal self-built Changzhou factory is expected to expand production to 200000 vehicles in 2022.

XPeng Inc.: the price is the most friendly to the people, the product is pure electric, there is a hatchback car, 100 kilometers accelerated ranked third; XPeng Inc. since the construction of Zhaoqing factory annual production capacity of 100000 vehicles, contract factory Zhengzhou seahorse annual production capacity of 150000 vehicles, self-built Guangzhou factory is expected to be completed in 2022, when completed entirely by self-built factory production.

In terms of smart driving technology, all three are shifting from relying on suppliers to independent research and development.Founder predicts that in the next three years, the new forces will gradually increase the intensity of independent research and development and establish a full stack of software development capabilities.

The following is Fangzheng Securities's specific analysis of the three new car-building forces:

NIO Inc.: the guided revenue exceeds 15 billion, and the fourth model will be released soon.

The income increases rapidly, and the cost control effect is remarkable.20Q3 NIO Inc. 's operating income was 4.53 billion yuan, an increase of 146.4% over the same period last year and 21.7% from the previous year. Car delivery volume increased rapidly. Q3 delivery volume reached 12000, an increase of 154.3% over the same period last year. Q3 gross profit increased by 18.2% compared with Q2, and the loss was narrowed by 44.4% compared with Q2, mainly due to the remarkable effect of Q3 operation optimization and expense control and strengthening cost control measures during the epidemic.

Delivery volume is growing rapidly, hitting a new all-time high.NIO Inc. delivered 5055 vehicles in October, an increase of 100.12% over the same period last year. NIO Inc. Q3 delivered a total of 12206 vehicles, an increase of 154.34% over the same period last year. The Jianghuai factory has a monthly output of about 5000 vehicles, and the fourth model of the NIO Inc. brand will also be put into production at the Jianghuai factory, and Q4 delivery is expected to reach 10000.

Position the high-end market and establish competitive advantage through differentiation.The NIO Inc. model takes the high-end route, which is characterized by sufficient horsepower, long range and sufficient space. The acceleration of each model is less than 5 seconds, the maximum power is 400kW, and the price is 400000 yuan or more.

Intelligent software supports multi-function, and self-driving occupies the leading level in the industry.NIO Inc. Automotive Intelligence Software NIO OS has automatic driving system NIO Pilo, intelligent assistant NOMI, audio version of NIO Inc. Community-NIO Radio and other functions; NIO Pilot has reached the L2 autopilot level, similar to Tesco's Autopilot autopilot system. NIO Pilot consists of 12 ultrasonic sensors, 5 millimeter wave radar, 1 forward trinocular camera, 4 look cameras, and a driving status monitoring camera; NOMI's voice technology is supported by iFLYTEK; NIO Radio is an important flat car for NIO Inc. to communicate with users; at the same time, it also connects to common applications such as QQ Music, Himalayan FM, Baidu, Inc. Map, and carries out special application-level optimization.

The gross profit margin improved, the expense rate fell, and the net interest rate rose steadily.The company's gross profit margin increased greatly, 20Q2 gross profit margin became positive for the first time, 20Q3 gross profit margin reached 12.9%, month-on-month growth 4.5pct, mainly due to steady increase in delivery volume and enhanced cost control ability; good control of Q3 expense rate, R & D rate and sales rate decreased to 13.1% and 20.8% respectively, 1.6pct and 4.4pct decreased respectively, showing an overall downward trend. Q3 net interest rate is-23.13%, month-on-month growth of 8.5pct, there is still room to continue to rise in the future.

The investment in R & D continues to increase, and the cost of design and development accounts for a high proportion.The company's R & D investment has increased year by year, with a total investment of 4.43 billion yuan in 19 years, an increase of 10.8% over the same period last year, of which design and development fees and employee salaries accounted for 46.1% and 45.3% respectively; design and development expenses maintained a high growth rate of 11.7% over the same period last year; the company maintained high R & D investment and paid attention to technological innovation.

The asset structure has been greatly improved and the liquidity of assets has been enhanced.20Q3's liquidity assets reached 26.33 billion yuan, an increase of 275.5% over the same period last year and 74.5% month-on-month growth. The proportion of Q3 currency funds and short-term investment was 73.4% and 10.3%, respectively.

Debt is stable and long-term loans are the main.The total debt of 20Q3 was 20.22 billion yuan, a decrease of 10.6% from the previous month. The debt mainly came from long-term loans; the proportion of long-term loans, accounts payable and bills were 33.5% and 24.4%, respectively.

Production capacity continues to expand, and self-built factories have begun to plan.The company has transformed from a cooperative factory to a self-built factory. At present, the company mainly relies on Jianghuai factory, with an annual production capacity of 150000 vehicles. NIO Inc. is currently planning the second plant in Shanghai, which is expected to have an annual production capacity of 250000 vehicles in 2022.

XPeng Inc.: Maori became a regular worker for the first time, increasing investment in self-built factories

Revenue reached an all-time high and the company turned a loss into profit for the first time.The company's Q3 operating income was 1.99 billion yuan, an increase of 342.5% over the same period last year, and a month-on-month increase of 236.9%. Q1-Q3 's operating income was about 2.99 billion yuan, an increase of 78.0% over the same period last year, mainly due to the continued growth of car delivery volume; Q3 delivery volume reached 8578, an increase of 71.6% over the same period last year; gross profit reached 90 million yuan, the company turned a profit for the first time; Guangzhou manufacturing base began construction, is expected to be completed in 2022, with an annual production capacity of 100000 vehicles.

Delivery volume decreased slightly and Q4 is expected to return to growth.October delivery reached 3040 vehicles, down slightly from the previous month, down 12.6% month-on-month from the previous month. Total sales of the 20M1 M10 reached 17117, and future deliveries are expected to remain high.

XPeng Inc. model is divided into P7 and G3, the standard version (P7 Zhixing version, G3 Zhixiang 46i) price is 16.98 yuan, 254900 yuan, G3 is superior to P7 performance, 706km, 100 km acceleration 6.7 seconds, the maximum power 196kW.

The intelligent system supports multi-scene applications, and the mobile phone APP realizes intelligent linkage.XPeng Inc. intelligent software system Xmart OS has the functions of voice assistant "Xiao P", OTA flat car, APP remote control and intelligent navigation. The voice assistant "Xiao P" uses touch + voice to over-guide users' habits and is committed to completely replacing the traditional car operation with natural voice interaction; the whole vehicle OTA extends this "open possibility" to more diverse and personalized car scenarios in the future through the "full voice in-car system" as well as the entire hardware, software and underlying architecture.

Download XPeng Inc. APP connection from the mobile phone, you can remotely control the vehicle, you can use the mobile phone to control the air conditioner, the opening and closing of the car window, the search for the car and the charging pile, and the remote camera to view the surrounding environment of the car. Intelligent navigation is equipped with Gaode customized map, rich data reserve, accurate positioning, and can display the location of XPeng Inc. super charging stakes. In addition, this central control screen can also achieve intelligent linkage with liquid crystal meters. Synchronously display driving, navigation, entertainment and other aspects of information.

The gross profit margin became positive for the first time, the expense rate was well controlled, and the net profit loss narrowed.Q3 gross profit margin is 4.6%, month-on-month growth of 7.4pct, for the first time from negative to positive; R & D expense rate and sales, administrative and general rates are 13.3% and 13.6% respectively, reducing by 50.0pctPhint 66.0pct, respectively, and the cost rate has maintained a downward trend since 20 years; the net interest rate is-57.5%, which is significantly narrowed compared with the loss of H1.

Liquidity assets increased significantly, with liquidity approaching 80%.Q3 liquidity increased significantly, mainly due to the rapid increase in delivery volume and access to liquidity; monetary funds and short-term investment accounted for 52% and 25%, respectively.

Liabilities are stable and accounts payable account for a relatively high proportion.The total debt of Q3 reached 8.07 billion yuan, and the increase in the company's orders led to a substantial increase in liabilities compared with the same period last year; the company's accounts payable and long-term loans accounted for a relatively large proportion, 43.3% and 20.7%, respectively.

The company's 20H1 capital expenditure is 520 million yuan, which is significantly lower than that of the same period last year. Recently, the company signed a cooperation agreement with the Guangzhou government, and the Guangzhou Intelligent Manufacturing Base with an annual production capacity of 100000 vehicles has already started construction. It is expected that the company's capital expenditure will return to a high level in the future.

The expansion of production capacity has been accelerated and the construction of Guangzhou base has begun.The company now has two production bases, namely, Haima Automobile foundry and self-built Zhaoqing Factory; signed a cooperation agreement with Haima OEM in 2017 to mainly contract production of XPeng Inc. G3; Zhaoqing Plant Phase I project capacity is planned for 100000 vehicles / year, and entered mass production at the end of March 2020; Guangzhou manufacturing base has broken ground and is expected to be completed in 2022 with an annual production capacity of 100000 vehicles.

The market is highly prosperous, and the penetration rate is expected to accelerate.XPeng Inc. 's penetration rate reached 2.3% in October, and the market demand continues to expand. With the further expansion of the company's production capacity in the future, there is still much room for upward infiltration in the future.

Ideal: still insist on adding programs in the short term, and the recall does not affect new orders

The income rises quickly, the delivery volume is at a new high.20Q3 ideal operating income 2.511 billion yuan, month-on-month increase of 28.94%, car delivery volume increased rapidly, Q3 ideal ONE delivery volume reached 8660, an increase of 31.13%; Li Auto Inc. 20Q1 generated income, which is still in the loss stage, of which 20Q3 operating profit is-180 million yuan, mainly because the company is still in the capacity construction cycle and offline channel expansion period.

Ideal ONE positioning in the high-end SUV, the standard version (extended range 6) price is 328000 yuan, range 180km, 100km acceleration 6.5s, maximum power 240kW.

The intelligent system is continuously upgraded and the software has complete functions.Li Auto Inc. intelligent operating system Li OS, including vehicle control, autopilot and other functions, is currently under development and promotion. The idea of R & D system also refers to Tesla, Inc.: the first generation products completed the terminal, the second generation products realized their own hardware integration and real-time operating system, and the third generation products achieved their own chips. Li Auto Inc. plans to master the real-time operating system on his own on the route of developing second-generation products.

At present, the ideal ONE software system is equipped with a large number of intelligent applications, with online music listening, drama tracking and navigation. At present, it has launched iQIYI, Inc. video, Himalayan audiobooks, ideal music, FM (electric car), Amap, Tencent map, voice-activated games and other functions.

The gross profit margin is improved and the cost rate is stable.The company's gross profit margin increased better, and 20Q3 increased 6.4% month-on-month, mainly due to lower costs brought about by upstream material price cuts and large-scale effects, and there is still room to continue to rise in the future; the expense rate has been well controlled since 20Q1 and increased slightly in the third quarter, mainly due to the company's equity incentives to employees and the granting of stock options, resulting in a slight decline in 20Q3 net profit.

The design and development expenses of the R & D investment exceeded 50%, and the company's R & D expenses in the past 19 years reached 600 million yuan, an increase of 42.4% over the same period last year, of which design and development expenses and staff salaries accounted for the highest proportion of R & D expenses, reaching 51.6% and 39.5% respectively.

The liquidity of the company's assets has improved significantly.Compared with the second half of 2019 and the first half of 2020, the total amount of Q3 liquid assets in 2020 increased significantly, to 20.577 billion yuan, an increase of 292.70% over the same period last year, mainly due to the completion of the company's IPO and private placement. According to the 20Q3 financial report, the proportion of time deposits and other short-term investments, monetary funds, inventory and restricted cash are 58.83%, 31.45%, 4.20% and 1.65%, respectively.

Liabilities are stable, mainly accounts payable.The total Q3 debt in 2020 was 5.052 billion yuan, a decrease of 260 million yuan compared with the previous year. The number of orders increased since 2020, and the company added input and production, and the debt increased compared with 2019. Accounts payable and bills are the main sources of debt. Accounts payable and bills, long-term loans accounted for 41.0% and 10.0% respectively.

The intensity of investment has increased significantly.20Q3 company investment activities cash flow expenditure increased by 9.88 billion yuan, did not disclose the specific project quota, compared with the previous reporting period growth is larger, business expansion will accelerate.

The transformation from contract factories to self-built factories brings lower costs and more effective product quality control.The company has a self-built factory, Jiangsu Changzhou manufacturing plant. Unlike other new forces using OEM, the factory was completed in 2019, when Li Auto Inc. was established four years ago. The factory has four workshops: stamping, welding, painting and final assembly, and a road test site.

The annual production capacity of the first phase will reach 100000 vehicles, and it is estimated that the annual production capacity will reach 200000 vehicles in the future.

Order growth unaffected by recallLi Auto Inc. accounted for a stable 3% of new energy vehicle sales, and vehicle recalls accounted for 46% of total sales. From November 7, the company announced a large-scale recall of 10469 ideal ONE electric vehicles manufactured from November 14, 2019 to June 1, 2020. As of October 2020, the company delivered less than 23000 vehicles, with recalls accounting for nearly half of the company's total deliveries. Since the announcement of the recall, the company's orders have not been significantly affected, and the growth rate of new orders has been in line with that before the recall.

The proportion of ideals is stable, and there is still room for upward infiltration in the future.Since the recovery of new energy passenger cars across the country in July, the proportion of ideal sales in national sales has remained stable at about 3%, and the company's service and driving experience are better, with more room for upward penetration.