The government support is comparable to Tesla’s landing in Shanghai, and the investment value of Cyrus (601127.SH) has been recognized again.
(Original title: The government’s support is comparable to Tesla’s landing in Shanghai, and the investment value of Cyrus (601127.SH) is recognized again)
On September 19th, Cyrus announced a heavy news in a low-key way.
The announcement shows that Celeste has signed a strategic cooperation agreement with the management committee of Chongqing Liangjiang New Area. Both parties will seize the opportunity of the new energy automobile industry and help Chongqing build a trillion-dollar intelligent networked new energy automobile industry cluster while boosting Celeste’s development into a head enterprise in the new energy automobile industry.
Judging from the specific landing measures, Chongqing Liangjiang New Area Management Committee is responsible for the preparation of an intelligent networked new energy automobile industrial park covering an area of 2,700 mu, including factory buildings, infrastructure and related equipment. Sailisi New Energy Vehicle Upgrade Project will be located in Longxing Intelligent Network New Energy Vehicle Industrial Park, Liangjiang New District, Chongqing.
Whether it is the increase in production capacity brought by the new project or the possibility of taking advantage of the trillion industrial clusters created by the good cooperation experience of both parties to the agreement, it means that this cooperation will become a ladder for Cyrus and push it to the center of the new track for the automobile industry in various countries.
The annual production capacity exceeds one million vehicles, and the intelligent manufacturing strength is leading the industry.
Capacity expansion and manufacturing capacity improvement are the most intuitive influences.
According to the information of the Management Committee of Liangjiang New Area, the industrial park is expected to be completed and put into operation in the fourth quarter of 2023, with a design capacity of 30jph in the first phase, and a capacity of 120jph in the future, with an annual output of over 700,000 vehicles. It will become one of the intelligent manufacturing bases of new energy vehicles with the largest output in the world.
Source: Founder Securities
Reflected in Cyrus, it means that the company will gain 700,000 production capacity increment and matching intelligent manufacturing capacity in addition to the production capacity of Liangjiang Smart Factory and Phoenix Smart Factory of about 30JPH each, and the overall production capacity will exceed one million vehicles. According to the published data, the annual production capacity of Weilai, Ideality and Tucki, which are highly concerned by the market, is in the range of 300,000-600,000, and the current production capacity of Tesla’s Shanghai factory in China is about 750,000.
It can be said that the launch of the new project will make Cyrus have a production scale far exceeding that of domestic first-line new energy vehicle companies and gain manufacturing capacity comparable to Tesla.
In addition to production capacity, intelligent manufacturing is another key to winning the new energy vehicle track, and the advantage of Cyrus is even more remarkable.
Source: Founder Securities
Under the strategic guidance of transformation and upgrading to new energy, Celestial started the factory renovation project and technical reserve very early. In the past six years, the company’s R&D and innovation investment in the field of new energy vehicles accounted for more than 10% of sales revenue, and the capital scale exceeded 10 billion, making it a "minority" in China that not only has complete automobile manufacturing core engineering capabilities, but also independently controls the core technologies of "Three Electricity" and can build cars.
The previous Liangjiang Smart Factory and Phoenix Smart Factory were all designed according to the Industry 4.0 intelligent manufacturing standard, equipped with the same amount of robots and intelligent collaborative systems, and all the key manufacturing processes have been fully automated, with an intelligent rate of over 90%, which can be said to be the biggest backing for the rapid delivery of M5 in the world. The new project will once again create a new intelligent manufacturing benchmark.
As far as technology is concerned, the new energy vehicle upgrading project will be another intelligent production base built by using digital twin technology in accordance with the Made in China 2025 standard, driven by digitalization and intelligence, combined with new technologies such as big data and Internet of Things, with upgraded quality control, optimized operation scheme, reasonable overall layout and high-level digital information management system, which will reach the international advanced and domestic leading level.
From the core technology to the smart factory, compared with some new energy brands that still rely on OEM, Cyrus’s deep participation in the whole intelligent manufacturing process and the advantage of owning the intellectual property rights of the whole vehicle determine that it is no longer in the same competitive position as most domestic new energy vehicle companies, and the position gap between them will widen.
The Wenjie series formed an explosion relay, and multiple competitive advantages accelerated the market capture.
Solve the worries of production capacity, can Cyrus’ new car order support the production line to run? The answer is yes.
According to the latest data, from January to August, 2022, the cumulative production and sales volume of Sailisi new energy vehicles reached 75,846 and 73,557 respectively, with a year-on-year growth rate of 260.90% and 238.41%. Compared with the production and sales growth rates of 255.12% and 204.51% announced in the middle of the year, the company’s new energy business showed an obvious accelerated development trend in the second half of the year.
In terms of single product performance, the M5, which locates the intelligent luxury electric drive SUV, started delivery in March this year, setting the fastest record that the sales volume of a new brand single model exceeded 10,000 in 87 days, ranking in the top ten of the new energy SUV sales list from January to July 2022, and the market reputation and recognition continued to ferment.
With the broken performance of the M5, the pre-sale order of the M7 model listed in July this year broke 20,000 units. The first smart luxury pure electric SUV released in September asked the M5 EV, and the order exceeded 30,000 within 6 hours of pre-sale. Sailis series explosive products have become a relay, which will continue to push up the order performance.
In August this year, the cumulative delivery volume of the series of vehicles in the world reached 10,045 vehicles, which was the first time that the monthly delivery volume exceeded 10,000, setting a record for domestic new energy automobile brands to break 10,000 vehicles in a single month. Considering the new car effect brought by the M7 and the M5 EV, it is believed that the sales and revenue performance of new energy vehicles of Cyrus will be full of attention in the next few quarters, which also proves the necessity of its capacity expansion.
Starting from the competition pattern of the whole new energy vehicle market, the competitive advantage and product potential of Cyrus provide a more sufficient basis for its capacity expansion.
Although the "spring breeze" of domestic new energy vehicles has been blowing for a long time, it was not until 2021 that the production and sales of new energy vehicles showed an explosive growth of over 150% against the trend, which opened the real first year. The production and sales of major new energy vehicle companies are booming, and the stock prices of related listed companies are rising.
However, it must be admitted that the market competition at that time was relatively stable. With the high growth certainty of the new energy vehicle track in 2022, the early layout of some enterprises was released one after another, the competition in the new energy vehicle market became increasingly fierce, and the market share performance was obviously differentiated.
General situation of market share change of new energy vehicles
Source: Chenglian, Huachuang Securities
It is not difficult to see from the above figure that the market share of some new forces has declined, and AITO, a subsidiary of Sailis, seized an incremental market share of 2% in the more fierce competition environment from January to August this year, with sufficient stamina.
First, the new energy vehicle market has entered the stage of comprehensive strength competition from a single brand competition, and the rising Cyrus has the advantage of crushing.
The M5 and M7 launched by Celestial are all exploding, the three smart factories are put into operation one after another, and the company still holds 3,000 core technology patents, pure electric drive intelligent range extension platform (DE-i) and other technical assets, and Celestial’s brand sound volume, product performance and production scale are all on the rise. Whether it is product updating iteration, scale and intelligence, it means reducing costs and increasing efficiency.
On the other hand, the promotion of brand reputation will attract more opportunities for high-value cooperation for Cyrus. For example, this time, Chongqing chose Cyrus to build a trillion-level intelligent networked new energy automobile industry cluster, and the company will have the opportunity to gain more development opportunities and enlarge the imagination of the market.
The potential energy of trillion-level industrial clusters can be expected, and the government support is comparable to Tesla’s landing in Shanghai.
In the competition of new energy automobile enterprises, it seems that it has become a trend to cooperate with local economy to build industrial clusters, and the results are good.
Weilai landed in Hefei Development Zone and got a life-saving investment, which led to the peak of valuation in 2020. Tesla joined hands with Shanghai to port, which ensured the delivery of the global market, and Shanghai also became the great hero of Tesla’s global summit.
What kind of energy can Cyrus and Chongqing Liangjiang New Area create hand in hand? The market should have sufficient interest.
On the one hand, the two have a good foundation for cooperation in the field of new energy, and the progress and landing expectations of subsequent projects are relatively smooth.
The Liangjiang Smart Factory put into use by Cyrus in 2019 covers an area of 800 mu, with a total investment of 4 billion, including four process workshops: stamping, welding, painting and final assembly. The M5, which realizes mass production and delivery, is produced in this factory. At present, Liangjiang Smart Factory has become one of the most intelligent automobile factories in Chongqing and even the whole country, and Liangjiang New District has also consolidated its position as the main position of Chongqing’s automobile industry development. In terms of mutually beneficial cooperation, Chongqing and Cyrus have the same consensus and mutual understanding, which will provide guarantee for long-term cooperative cooperation.
On the other hand, Chongqing’s political and business environment is good, and it has the determination to vigorously develop the automobile networking industry. At present, the support is not weaker than Shanghai’s help to Tesla, and it is expected to continue to give generous policy packages in the future.
From the published cooperation content, some people in the industry have already smelled the generosity of the local government, and think that the Chongqing government’s support for Cyrus is comparable to that of the Shanghai government for Tesla, and it has hardly brought much financial pressure to Cyrus.
According to the announcement, in this project, the intelligent networked new energy automobile industrial park covering an area of 2,700 mu is invested by the government and is responsible for the factory construction. It is said that the investment scale will exceed 10 billion yuan, which is close to the initial investment scale of Tesla Shanghai. In addition, Cyrus only needs to invest 1.5 billion yuan to buy special equipment. Compared with the two smart factories of Liangjiang and Fenghuang, the total investment is as high as 4 billion yuan, which is equivalent to only about 40% of the investment of the first two factories, and it has gained 3-4 times the factory area and production capacity.
At the same time, the agreement stipulates that Cyrus enjoys the preemptive right to lease assets not higher than the original value. According to the industry, it can be understood that Cyrus can buy the whole factory at a depreciated price, which is equivalent to providing a loan with negative interest. The actual preferential strength is already higher than the low-interest loan provided by the Shanghai government for Tesla.
From the perspective of long-term development, the Chongqing government’s strategy of vigorously developing new energy automobile industrial clusters is expected to bring sustained and stable policy dividends to Cyrus.
Source: public information
Not long ago, the Chongqing government issued the "Development Plan for Building a World-class Intelligent Networked New Energy Automobile Industry Cluster in Chongqing (2022-2030)", proposing that by 2025, Chongqing will initially form a prototype of a world-class intelligent networked new energy automobile industry cluster, and the production and sales of intelligent networked new energy vehicles will account for more than 10% of the national total. By 2030, a world-class intelligent networked new energy automobile industry cluster will be built, and the industrial scale will reach the world-class level.
At the same time, the government has clearly named that it will strongly support vehicle companies such as Cyrus to accelerate the development of intelligent networked new energy vehicles and promote the construction of world-class automobile brands and automobile companies. According to the established plan of Liangjiang New Area to cultivate 2-3 internationally renowned intelligent networked new energy independent automobile brands in 2025, Cyrus will be the number one seed player on the list.
The effect of talent gathering, industrial chain and supply chain gathering and market gathering brought by a complete industrial cluster will bring the maximum scale effect, and Cyrus, located in the central area of industrial cluster development, will surely be one of the biggest beneficiaries.
summarize
Cyrus shows its competitive heart for China’s new energy automobile market with the attitude of All in, while Chongqing is determined to build a trillion-level intelligent networked new energy automobile industrial cluster with the successful experience of several hundred billion-level industrial clusters such as electronic industry.
The combination of the two sides will bring more expectations to the market.