The fourth Hong Kong stock market! Zero-run cars are expected to be listed on the 29 th, and will soon "lead" the new forces to build cars?

  The new force of building a car, zero-running cars, finalized the time to market.

  On September 20th, Zero Run Auto announced on the Hong Kong Stock Exchange that the number of IPO shares in Hong Kong was 130.8 million, and the offering price per share ranged from HK$ 48 to HK$ 62. It is expected to start trading on the Stock Exchange on September 29th, 2022.

  This means that the zero-running car will become the fourth new force to log on to the Hong Kong Stock Exchange after Wei Xiaoli.

  It is worth mentioning that the zero-run car is still in a difficult position to make a profit. The financial report shows that between 2019 and 2021, the company’s accumulated losses in three years exceeded 4.8 billion yuan.

  So what is the listing of zero-run cars? What will happen after listing? Can you achieve a real "zero run"?

  Sales increased significantly.

  In fact, the news about the listing of zero-run cars has been constant.

  As early as last October, the market had already heard the news that Zero Run Car would go public in Hong Kong, and second-tier new forces, including Weimar and Nezha, were preparing to land on the Hong Kong Stock Exchange, and Zero Run Car was able to go public this time or benefited from the explosive growth of its car sales.

  It is reported that the zero-running car was established in December 2015. Compared with "Wei Xiaoli", after the establishment of Zero Run, its presence in the market is not high.

  Until 2021, thanks to the rapid release of the company’s mini-car T03, the zero-running car gradually entered the public eye. In 2021, the cumulative sales volume of zero-run cars was 43,121, of which 38,463 were sold by zero-run T03, accounting for nearly 90%.

  Since the beginning of this year, the zero-running car has quickly become the "dark horse" of the new force in making cars. In the first half of this year, 51,994 smart electric vehicles were delivered, a year-on-year increase of 265.3%. In July this year, the sales volume of zero-run cars far exceeded that of "Wei Xiaoli", ranking second only to Nezha.

  In August, the delivery volume reached 12,525 vehicles, up by 180% year-on-year, reaching a new record high. This is also the fourth consecutive month that the sales volume of zero-running vehicles exceeded 10,000, ranking second in the delivery volume of new car-making forces for two consecutive months.

  In this regard, some insiders pointed out that the rising sales of zero-run cars are related to the positioning of their main cost performance.

  A careful study of each model reveals that Zero Run is fighting a differentiated war by using intelligence and cost performance. If you run T03 at zero, the car will have L2 intelligent driver assistance system and automatic parking system, which is rare in its class.

  However, behind the increase in its sales, the zero-run car, which has always claimed to be "the only new car-making force in China with global self-research capability", has been declining in the proportion of R&D expenses in total revenue in recent years. The data shows that from 2019 to 2021, its R&D expenses accounted for 306.4%, 45.8% and 23.6% of the total revenue respectively.

  In addition, from 2019 to 2021, the cumulative R&D expenditure of zero-run cars was less than 1.4 billion yuan, which was far from the previous R&D expenditure of Weilai, LI and Xpeng Motors, which was more than 3 billion and 4 billion yuan per year.

  Behind the VC/PE institutions, the lineup is luxurious

  It is worth mentioning that the equity background of this new car-making force can be called "luxury".

  It is reported that Zero Car was jointly invested and established by zhejiang dahua Technology Co., Ltd. and its main founders, and Dahua Co., Ltd. is a big name in the security industry, with a market value of 40 billion — Between 60 billion, second only to Hikvision.

  In addition to Dahua shares, there are many star institutions among its shareholders. It is reported that since its establishment, Zero Run has completed seven rounds of financing, with investors including Sequoia China, CRRC, Hangzhou State-owned Assets and Shanghai Electric.

  Among them, Sequoia Capital entered the market relatively early. According to the prospectus, in the Pre-A1 round of financing completed in mid-January 2018, only one investment institution, Sequoia Zhisheng, contributed 170 million yuan. In November 2018, "Sequoia Jiesheng" invested another 50 million yuan and made a follow-up investment.

  In addition, Ge Weidong, a private equity tycoon, appeared in the company’s shareholder list. Ge Weidong participated in the C2 round of share subscription in November 2021, with a capital contribution of 500 million yuan.

  It is not difficult to find that compared with Wei Xiaoli, who had a narrow escape, the zero-running car backed by Dahua shares did not receive much resistance in financing.

  What will happen after the successful listing?

  Once successfully listed, the deep loss of zero-running cars may be solved.

  According to the financial report, as of the end of the first quarter of 2022, the cash and cash equivalents of zero-run cars were 5.231 billion yuan, which could not last long without new financing, compared with Wei Xiaoli’s cash reserves of about 50 billion yuan.

  Although the recent sales data is considerable, the zero-run car is still in the stage of "the more you sell, the more you lose". The data shows that in Q1, 2022, the price of bicycles was 92,000 yuan, the cost of bicycle BOM was 105,000 yuan, and the loss of bicycle BOM reached 13,000 yuan.

  Previously, Zero Run plans to launch one or three models every year in the future, and strive to launch seven brand-new pure electric vehicles by the end of 2025. If this zero run car goes smoothly or continues to launch follow-up models as planned.

  However, it should be pointed out that the successful listing of zero-run cars is not the end, but a new starting point.

  At present, the competition in the new energy automobile industry is becoming increasingly fierce. Traditional car companies, new forces and internet companies have joined the army of car makers. Specifically, BYD’s sales are far ahead; Although the sales volume of "Wei Xiaoli" is not good this year, its layout is complete and its advantages are still there.

  Whether the zero-run car can be as strong as Zhu Jiangming expected to be among the top three new forces in car-making and win 10% market share is still unknown.

  However, Zhu Jiangming once said: "Building a car is like a long-distance running, and the process is long, but what we don’t lack most is patience, and we must follow the direction of self-research."