I can't beat it.TeslaJust bully BAA?

A year ago, if someone had told youWeilaiThe market capitalization will rise to $100 billion, and there's a good chance you'll think he's crazy. But now, Weilai is crazy because it has really risen to $100 billion.

By market value, Weilai is already the sixth listed Internet company in China, rankingJingDongAfter that,BaiduBefore. For the first time since U. S. stocks opened on January 11, Lulai's market capitalization passed the $100 billion mark.

China's top six Internet listed companies by market capitalization, data as of January 14, 2021, Cartography / Deep Burning

So here comes a debate that many investors can fight: Weilai, is it worth $100 billion?

The square may say: "China Tesla" has a promising future; it is a luxury car that can arm wrestle with BBA (Mercedes-Benz, BMW, Audi); it has high stickiness among its owners and has a smooth circle of users; it has a "backstage", and the Hefei municipal government is the "best investment institution" in China. In short, investment is about the future, and the future is valuable.

The opposite side may retort like this: the sales volume in Weilai is only a fraction of Tesla's, and it is only a minority recognized brand; the power exchange mode is unreliable, and the assets are too heavy and the cost is too high; once the traditional car companies counter-attack, the first-mover advantage cannot be sustained; in terms of the market-to-sales rate, the valuation of Weilai is even more expensive than Tesla, and the bubble is very big. In short, Weilai is not worth the current price.

It is said that new energy vehicles are subversive, but Weilai has not yet subverted the domestic automobile industry, first subverting the values of investors.

To get back to the point, Deep Combustion will take you to dismantle the company and see how much water there is in the market capitalization of 100 billion US dollars.

01

If you can't beat Tesla, you just "bully" BBA?

To answer the question of whether Weilai is worth $100 billion, you have to start with two recent seemingly unrelated things.

First, Tesla domestic Model Y price reduction. The car was officially released on January 1, with a starting price of 339900 yuan for the basic version and 369900 yuan for the high-performance version, which is 148100 yuan and 165100 yuan lower than that before localization, respectively.

After the news came out, there were two major reactions in the market. First of all, Tesla's order exploded, and the surge in traffic led to the inability to refresh the order on the official website. Correspondingly, there are a lot of negative voices, thinking that Model Y will impact the market share of Weilai, and it is rumored that users will unsubscribe in a large area.

The second thing is that Weilai released its first car, the ET7. Eight days after the sale of domestic Model Y, NIO Day was held in Chengdu and ET7 was officially released at the meeting. The price of the whole car was subsidized from the first 448000 yuan.

In the past, the main model of Weilai has always been the SUV, thus avoiding the direct competition with Tesla in the Chinese local market, and the launch of the car means that in terms of product form, the coincidence of Lulai and Tesla is getting higher and higher.

According to reason, the first thing is good for Tesla and bad for Weilai. Tesla's share price soared a few days after the news, and Musk became the richest man in the world. However, the stock price of the "three silly" led by Wei Lai did not plummet, but rose along with Tesla. Since the release of ET7, Weilai's market capitalization has risen by more than $100 billion.

So here's a key question:Who is the enemy of Wei Lai? Is Tesla an imaginary enemy?

Source / Pexels

Li Bin replied: "there is not so much competition between Xilai and Tesla's products. Our competitors are BBA (Mercedes-Benz, BMW, Audi). We want to turn their tanker users into their own users in the same price range." In other words, the enemy of Wei Lai is BBA.

This answer sounds reasonable. After all, everyone knows that it is an irreversible trend for new energy vehicles to replace gas vehicles. Weilai calls itself the luxury car in the electric car and the BBA in the fuel car. However, users who have been converted from BBAIn the face of Weilai and Tesla, which one will he choose? there is still a question mark.。

In fact, from the perspective of the development path, Weilai is very similar to Tesla, and the outside world has always thought that it is to Standard Tesla. Tesla's first car, the Roadster, released in 2008, was a supercar, and the Model S and Model X, later released, were also positioned for luxury cars, and did not sink into the mass market until the launch of the Model 3. The EP9 launched by Xilai in 2016 is also a supercar, and the later ES8 and ES6 are medium-and high-end luxury cars, but it has not yet launched popular products with lower prices.

On the one hand, Weilai bears the halo of "Tesla of China", and at the same time, it inevitably makes people feel that it is double-marked by its slogan of grabbing the market with BBA and not competing with Tesla.

Therefore, when Tesla's domestic Model Y reduced prices, the most concerned issue in the industry was not how many fuel truck markets Tesla would take away, but whether Weilai could withstand the downsizing blow of Tesla.

Tesla is definitely invincible, and Wei Lai has no intention of fighting. In terms of the development of electric vehicles, Tesla is the "master" of the new power of car-building in China, and he is a well-deserved king. Especially after Tesla began to be localized in 2020, the Chinese market broke out. Tesla Model 3 sold 137459 vehicles in China in the past year alone, accounting for nearly 30% of the global total. More importantly, with the listing of domestic Model Y, Tesla's impact on the Chinese market is accelerating.

There is one detail that may reflect the delicate relationship between Weilai and Tesla. Weilai's stronghold was originally in Shanghai, and it was planned to build a factory in Jiading, Shanghai. Tesla reached a cooperation with the Shanghai municipal government in July 2018 and decided to build a super factory in Shanghai. Since then, the policy of land acquisition, building and production has been given the green light. Then, in March 2019, Weilai cancelled the plan to build a factory in Shanghai Jiading, received 7 billion yuan in financing from the Hefei municipal government the following year, and settled in Hefei with its Chinese headquarters.

Even if he is called China's Tesla by fanatical investors in US stocks, Weilai has never admitted to going head-to-head with Tesla. Some people say,Wei Lai couldn't beat Tesla, so he came to "bully" BBA.. After all, everyone knows that BBA's slow transformation can be overtaken by corners.

02

What other cards do you have in your hand?

BBA is a luxury car, Weilai also says that he is a luxury car.

This is true in terms of price. For example, the ES8, the first mass production car from Weilai, starts at 448000 yuan, which is already the grade of Audi A6L, BMW 5-Series and Mercedes-Benz E-Class. The newly released ET7 claims to match the BMW 7-Series and Mercedes-Benz S-Class. Li Bin said that this car is even against the future Apple car, Tesla is no match.

It's a luxury car concept, and it's a high-end story.This is a card in Weilai's hand.

But what many people question is that luxury cars in Weilai do not rely on products, but on positioning and marketing. Some people have described Xilai as "brand power is greater than product power". The quality of the car is on the one hand, while the dignity and feeling of the car owner is on the other, and sometimes the latter seems to be valued more seriously.

Most of the people who buy Wei are rich, who need circles, noble experiences and unique identities.

A few days ago, someone chartered a plane to participate in an activity, singing and dancing in the cabin, which happened when the owner of the Weilai car participated in the Nio Day. At the Nio Day scene, the band formed spontaneously by the car owners of Weilai also performed on the stage, and Wang Feng sang three songs at the scene, which was like a concert. This is the circle and culture that Weilai created for the car owners. According to many car owners, Nio Day is not only a press conference, but also a party, a trip, a meeting of old friends.

Compared with traditional automakers and other new car-building forces, Weilai's products are not necessarily the strongest, but users attach great importance to them. So Tesla can cut prices frequently and be scolded by old car owners for cutting leeks, but it is impossible to cut prices, so we must maintain the image of high prices.

Tesla's price reduction is due to the localization of parts and the increase in scale, resulting in a reduction in costs, but the pricing strategy of Weilai is different from that of Tesla. According to Li Bin, Lilai is not priced according to cost, but according to the market. The implication of this sentence may be that Xilai is building a high-end brand that will enjoy a brand premium. This sentence was scolded by many people, saying that Ulai actually wants to cut leeks.

But no matter how much it is priced and how it is advertised, it has to be settled on sales in the end.

New car-building forces: new car delivery in 2020, drawing / deep burning

As the sales gap between the new power and Tesla is too big, it is not of an order of magnitude, so we will not make a comparison here for the time being. As far as the three new forces are concerned, the delivery volume is still in the first place, butIdeal和Xiao PengThe growth rate is also very fast, and the gap with Weilai is narrowing.It is uncertain whether Weilai can keep the first place all the time.。

The most striking thing about the launch of the ET7 on Nio Day on January 9th is that the car will carry a 150kWh battery pack with solid-state battery technology and will have a range of more than 1000 kilometers. Solid-state battery will be commercial news triggered a big discussion in the market, is seen as Wei to grab a big card. Because of this, the share price of Weilai soared after the launch, with a market capitalization of more than $100 billion, while the share price of diaphragm and electrolyte makers that solid-state batteries would not use plummeted.

But this wave of muscle show still seems to remain at the PPT level.. Li Bin said in an interview after the press conference that Weilai did not use all-solid-state batteries. Industry experts say solid-state batteries will not be commercially available for five years.

03

With a market capitalization of 100 billion US dollars, do you have any water?

No matter whether Tesla is the enemy of Wei Lai or not, people are most accustomed to using the simplest and rudest method of valuing Weilai, or to mark Tesla directly.

In 2020, Tesla's global sales were close to 500000, while that of Lulai was 43700. Tesla's market capitalization was 800 billion US dollars, and Weilai was close to 100 billion US dollars.If you look at the market-to-sales ratio alone, the current valuation of Weilai is already more expensive than that of Tesla.. Investors all question the bubble in Tesla's share price, but compared with Wei Lai, they will find that Tesla's valuation can be more expensive.

In addition, people like to compare Wei with traditional car companies. At current valuations, Weilai has surpassed Daimler, Audi,Honda, general,Ferrari、FordAnd other traditional car companies.

Global auto companies market capitalization ranking mapping / deep burning

But in fact, this is not very comparable.New cars and traditional car companies are two completely different species.Like the difference between feature phones and smartphones, the two do not apply the same set of valuation logic. Traditional car companies are valued by car companies, while new cars are valued by technology companies. Now, as long as any company is involved in the concept of a new car, its valuation will climb immediately. For example, after the news of the car construction came out, Baidu's share price rose sharply for many days in a row, and its market capitalization reached a high in the past two years.

What is more suitable is the partial valuation method.

Traditional cars are defined by hardware, while new cars are defined by software, so traditional car companies only sell cars, while new cars can sell both cars and software. It is also because of this difference that the newly built car business can be divided into vehicle manufacturing, sales business, intelligent driving system software business, flow realization and other derivative business. Among themIt is vehicle manufacturing and software business that play a decisive role in valuation.. Furthermore, sales determine the valuation of vehicle manufacturing, and autopilot penetration determines the valuation of software.

Specific to WeilaiEverbright SecuritiesIt is estimated that the market space of pure electric vehicles targeted by new forces in 2025 may reach 2 million, of which the three new forces account for 600 million, of which 20-300000 are from Lulai. According to the current product and technology path planning of Weilai, the segment valuation method is used to manufacture 5.5x PS for the whole vehicle of Weilai, and the part of the vehicle is valued at US $62.5 billion. The installation rates of the selected package and the full package of NIO Pilot (automatic driving assist system) are calculated according to 20% and 30% respectively, 30 times PS is given, and the software part is valued at US $16.7 billion.The overall valuation of Weilai is 79.2 billion US dollars.。

Everbright Securities had a market capitalization of $71.9 billion when it released the report on December 18, 2020. just half a month later, it reached Everbright's valuation of $79.2 billion and continued to rise to $100 billion.

China International Capital CorporationThe partial valuation method is also used. In a report released on November 19th, CICC Weilai gave a target market value of 633.8 billion yuan ($97.9 billion) in 2025 and a target price of $52 in 2021.The corresponding market capitalization is about 80 billion US dollars.. CICC's reason is that nearly 400000 cars are expected to be sold by Weilai in 2025, with penetration rates of 40 per cent and 50 per cent for NIO Pilot selected packages and full packages, respectively, a total of 90 per cent. The business of Weilai is divided into three parts: hardware (car), software (intelligent driving) and service (service worry-free package). The above valuation is obtained by giving 25 times Phand E, 60 times Phand E and 20 times Phand S respectively in 2025.

But the speed at which brokerages forecast valuations is clearly unable to keep up with the recent growth in share prices. Less than two months after the release of the report, Xilai reached the level of valuation given by CICC five years later.

Interestingly, after Weilai released its new ET7 on January 9, CICC immediately updated its valuation of Weilai, raising the market value of hardware (vehicle sales) and software (smart driving) of Lulai, and raising the target price by 42% to $85, corresponding to 44% upside space, and the target price was as high as $103 in 2025.The corresponding market capitalization is about 160 billion US dollars.。

Someone joked thatThe valuation of the new power of car-building is a numbers game. How bold a man is and how productive the land is.. Subverted is not only the securities firms can not keep up with the pace of valuation forecasts, but also the investment beliefs of investors.

04

Who pushed Weilai to the peak of valuation?

It is hard to imagine that such a booming new car maker, whose share price has gone crazy, fell to $1 more than a year ago because of a capital chain problem.

Like Tesla's script, Weilai tells the story of a Jedi counterattack (Tesla was once on the verge of bankruptcy by a month). The difference is that in the capital market, there are a large number of people who are bearish on Tesla.Morgan StanleyIt was said in May 2019 that Tesla's shares were worth only $10, and in September 2020, American investors thought Tesla's shares were worth closer to $50.

Tesla has long been a favorite target for short investors, but because Tesla's share price has been rising, Tesla has lost more than $38 billion this year, according to analysis by S3 Partners, a financial data company.

Tesla and Weilai market capitalization, data source /EastmoneyChoice

Oddly enough, there are relatively few short sellers. At present, the publicly shorting institution of Weilai is Citron Capital. The short report, released in November 2020, believes that the valuation of Weilai is too high, which is more expensive than Tesla, and that all purchases of Weilai shares are speculative. However, Citron did not give more convincing arguments and reasons, nor did it find any hard injuries, and the lethality of shorting was very limited.

Many domestic investors have come to invest to a large extent because they believe in Li Bin and set their sights on Li Bin, because in all the projects that Li Bin has done in the past, no matterChange carsOr mobike, he made money for investors.

When foreign investors buy and sell stocks, they see more arbitrage opportunities. Tesla takes the lead, has waded out a way of constantly doubling the valuation, and the new car-building forces represented by Weilai are on this road.

And Weilai also made money for investors in American stocks. In 2020 alone, Weilai carried out three additional offerings in the secondary market, as well as several convertible bond issues. The first offering was in June, priced at $5.97, the second in August, priced at $17, and the third in December, priced at $39. Now the share price of Weilai has exceeded $60, which meansAll the investors who participated in these rounds of IPO financing have made money.。

Us stocks are enthusiastic about investing in Xilai stocks. When Weilai's share price rose from US $3 to US $60 in 2020, the turnover rate of Weilai stock was as high as 20% on many trading days, and for a period of time the daily turnover even exceeded that of Weilai.Current market capitalizationThis means that buying and selling is very frequent and the market game is very fierce. In November, on two trading days, the trading volume of Weilai stock actually ranked first in the United States, surpassing Tesla andAppleAnd other giants.

The mood of investment and speculation revolves around the company, pushing its market capitalization to the hundreds of billions of dollars mark.

But all this is based on the fact that the stock price can keep rising and the valuation can continue to rise.. What the market is worried about is whether the market capitalization, which now seems to be very expensive, has been overdrawn as expected in the future.In the final analysis, valuations need to be digested by an improvement in performance.. Once indigestion, overvaluation becomes a bubble.

The capital market is a place where sparrows can become Phoenix, bubbles can become cakes, and beliefs can be used to do magic. Whether it is a market capitalization of hundreds of billions or trillions, as long as someone pays the bill, it is reasonable. The joke is that no one wants to be the last one to pay the bill.