Li Bin'S Critical Moment

For Li Bin, chairman, founder and CEO of Yulai automobile, 2019 is indeed a tough year. As a result of huge losses, the new force of China's car manufacturers first came to the stock market, and the share price went down all the way. But this growing young company has not yet achieved the ideal hematopoietic capacity to make up for the loss.

In October 28th, Wei Lai car announced that CFO Xie Dong firefly resigned from the company's chief financial management post for personal reasons, and has been in force since October 30, 2019. The company has started looking for successors. Before the new CFO has yet to find a suitable candidate, the financial burden on Li Bin seems even heavier.

Li Bin has a very high financing ability. In the early days of Wei business, Li Bin soon got more than ten billion financing, and seized the opportunity of China's new car manufacturing force. By 2019, he was still the key to success.

In the eyes of the outside world, Li Bin has been "All in".

In September 5th, Wei Lai announced that it signed a convertible bond subscription agreement with Tencent and its chairman and CEO Li Bin, and Tencent and Li Bin each subscribed $100 million convertible bonds.

In September 13th, the company issued a notice in the US Securities Regulatory Commission that it received a preliminary non binding privatization proposal. The privatization offer came from a buyer group of Tencent and black horse capital, which offered to buy all shares that had not been held at a cash price of $16 per share. In the industry view, the reason why Yi car is privatized is because Li Bin, who is the founder of Yi Che, wants to save Yu Lai.

For some time, Li Bin has been running around to find resources and discuss cooperation. Twenty-first Century economic report reporter learned that a few days ago, Li Bin, chairman of Wei Lai automobile, visited the the Great Wall automobile headquarters in Baoding and met with Wei Jianjun, chairman of the Great Wall motor.

It is worth noting that since the beginning of this year, Wei Lai's ideas have changed, and we hope to get through the financing channels of RMB. However, the 5 billion financing negotiations between Wei Lai and Wuxing District of Huzhou city in Zhejiang province have been suspended, and there is no substantial progress in Beijing Yizhuang's 10 billion financing. Is it the next step to embrace traditional automobile manufacturers?

Business is good and pressure is still high.

If we follow the planned development path, this year will be the year when young Wei Lai car is on the right track. Wei Lai ES6 began to deliver in the middle of the year. This type of car, which is regarded as a "walking volume", will help Wei enhance the market competitiveness and also bring steady support to the financial situation of losses.

However, due to successive incidents of battery spontaneous combustion, Wei Lai took the initiative to recall 4803 ES8. Although this incident is difficult to eliminate some of the concerns of potential consumers, however, Wei's active recall is regarded as responsible and effective. Even from a commercial point of view, this initiative has indeed increased its popularity.

However, this incident also affected the cash flow of Wei Lai Ben. Wei Lai introduced a recall cost of around 340 million yuan in the second quarter of this year, which also led to a net loss of 3 billion 314 million yuan in the second quarter.

In the first few quarters, the loss of Wei Lai vehicle gradually narrowed because of the rising volume of new vehicle deliveries and the cost of manufacturing, R & D and sales. The company, known as the most "burning money" company, has shown its own hematopoietic capacity. Of course, for the four year old Wei Lai, it would be impractical to make money in the new year.

Reference is still in the loss of Tesla, a car companies want to profit, it will take a long time to accumulate. The key is whether there is a stable capital flow to support the development of Wei Lai automobile.

The report of Wei Lai automobile shows that from 2016 to 2018, the net loss of Wei Lai automobile was 2 billion 573 million yuan, 5 billion 21 million yuan and 9 billion 638 million yuan respectively. The accumulated deficit in the three years reached 17 billion 232 million yuan, plus 2 billion 623 million yuan and 3 billion 285 million yuan in the first half of this year, with a total loss of 23 billion 140 million yuan.

However, the loss of Wei Lai automobile in the third quarter is expected to be narrower than before.

In the third quarter of this year, the total delivery of 4799 vehicles was 35.1%. The sales volume of Wei Lai automobile showed some signs of warming, even higher than expected. This is mainly due to the continued sales of Wei Lai ES6, which has reached 1726 vehicles in September this year. It is the largest vehicle sales force in the month. Moreover, compared with other car companies located in the low-end market, the price of Wei Lai ES6 exceeds 300 thousand, and its sales in the market have a higher gold content.

In addition, it is worth noting that sales of China's electric vehicle market has declined for three consecutive months due to the sharp decline of new energy vehicle subsidies, and sales of BYD and Beiqi new energy enterprises have been affected. But Wei Lai ES6 has a higher positioning and is less affected by subsidies than others.

Li Bin's key choice

Although the sales revenue of Wei Lai has been improved, a series of personnel optimization and business adjustment can also reduce costs and ease financial pressure. However, if Wei's stock price fails to recover significantly, there will still be a need for external funding for blood transfusion in the short term to ensure further development.

What kind of financing path to choose, how to get funds, and to ensure long-term development interests is the key choice Li Bin is facing now.

One way is to introduce state assets. Wei Lai has already disclosed this intention, including financing negotiations with Huzhou Wuxing district and Beijing Yizhuang. However, as China's new energy vehicle investment frenzy is receding, the government and industry guidance fund is becoming more cautious about investing in new energy vehicles, and the risk of industrial investment will be more comprehensive.

Of course, from technology, products, market and other factors, there are already two mass production cars in the market, and to a certain extent, it is still a good investment target.

In addition to the introduction of state assets, Wei Lai vehicle can also get strategic cooperation with the vehicle factory so as to obtain certain financing. For the traditional car companies, the innovation of the new force itself in the Internet and business mode is actually attractive. Prior to this, it is known that FAW Group has been strategically invested in the new vehicle force, the proton car.

"The new force of car making has indeed made innovations in many aspects, and has a stronger Internet thinking than traditional car companies. The cooperation between the traditional car companies and the new car manufacturers often takes their own needs, and is also an opportunity for traditional car companies to learn and meet new ideas. In November 4th, senior automotive media bell division received an interview with reporters in twenty-first Century economic report.

At present, Wei Lai automobile has reached cooperation with three vehicle manufacturers in China. Because there is no "car qualification", the ES6 and ES8 sold by Wei Lai car are produced by Jianghuai Automobile. In addition, the company has established a joint venture with GAC and Changan, and its R & D positioning is lower than that of Wei. Among them, GAC Wei Lai in May this year, HYCAN released the independent brand "HYCAN co create" the first concept car. The first SUV of the company was opened in October 22nd, and will be delivered in the first half of next year.

However, at present, there is no vehicle company participating in the calendar financing process of Wei Lai automobile. Is Li Bin in contact with traditional car companies to prepare for the next round of financing?

"Over the past two years and for some time to come, during the adjustment period of the downward adjustment of China's auto market, the traditional car companies are having a hard time and there is not much left in their hands." In November 4th, a car industry insider told reporters on twenty-first Century economic report.

However, he also believes that to a certain extent, Wei Lai car has certain value for traditional car enterprises, especially the traditional automobile enterprises in China.

In addition to R & D, technology, talent, marketing and other resources, Wei Lai has initially set up the image of high-end local brands. To a certain extent, a Chinese brand can set a price of over 300 thousand and over 500 thousand, and has initially formed a fan effect and a circle effect. In a sense, it has been a great breakthrough. Moreover, the "China Tesla" label, which has been crowned, is indeed sought after by young urban and white-collar workers.

Over the years, China's automobile brand has been difficult to break through to a certain extent, which has been limited by the inherent impression of the brand. With the transformation of the global automotive industry and the change of consumer demand, consumers have higher requirements for experience and service, and Wei has indeed recognized the industry in this regard.

"It is indeed a good thing if we can introduce external capital to ease the financial difficulties that we are facing at the moment, and let him live. But what Li Bin must consider at the same time is how to make it better, and minimize the impact of the introduction of external capital, and continue to maintain the value and innovation of products and brands. The industry insiders said.