AutoBeta(AutoBeta.net)04/29 Report--

On April 29th, NIO officially announced that the agreement on the project with its headquarters in Hefei was officially signed, with an investment of more than 10 billion yuan. This also means that the previous cooperation between Beijing Yizhuang and NIO has failed.

Prior to the emergency, Chairman Li Bin confirmed that NIO was already negotiating a number of financing projects. No matter who finally invests, this part of the money will be "life-saving money". Judging from the news, it is Anhui Province and Hefei City in Anhui Province that finally lend a helping hand to Wei, which is also the location of the Jianghuai NIO factory.

The final agreement on investment in NIO China was signed by NIO with strategic investors such as Hefei Construction Investment Holdings (Group) Co., Ltd., China Investment Investment Management Co., Ltd., and Anhui High-tech Industry Investment Co., Ltd.

According to the investment agreement, strategic investors will invest 7 billion yuan in NIO China, while NIO will invest 4.26 billion yuan in NIO China.

At the same time, NIO will inject China-wide core businesses and related assets, including vehicle research and development, supply chain and manufacturing, sales and services, and energy services, into NIO (Anhui) Holdings Co., Ltd., the legal body of NIO in China. The above business and assets are valued at 17.77 billion yuan based on 85% of the average market capitalization of NIO in the 30 public trading days before April 21, 2020.

As a result, after the completion of the deal, NIO will hold 75.9 per cent of the controlling shares in NIO China, while strategic investors will hold a total of 24.1 per cent.

NIO China headquarters is located in Hefei Economic and technological Development Zone. According to the agreement, NIO will set up a Chinese headquarters in Hefei Economic and technological Development Zone, establish an integrated base for headquarters management, research and development, sales and service, and supply chain manufacturing, and start the planning and construction of the second manufacturing base in due course. Hefei will also support the establishment of NIO China headquarters and the construction of follow-up R & D and manufacturing bases.

In March, Li Bin said: the cash balance is not enough to provide the working capital and liquidity needed for continued operation for the next 12 months. The investment from Anhui and Hefei will temporarily solve the financial difficulties of Lulai.

According to the annual results of 2019 released by NIO Automobile, the revenue of NIO in 2019 was 7.825 billion yuan, up 58 percent from the same period last year, with a net loss of 11.413 billion yuan.

In 2019, a total of 20565 new cars were delivered. Affected by the epidemic and other factors, a total of 3838 cars were delivered in the first quarter of 2020.

Data show that the gross profit margin of Lulai Motor for the whole year of 2019 was-15.3%, down 10.1% from-5.2% in 2018. The main reason is that after the listing of ES6, the overall average price of bicycles tends to decline, at the same time, the service requires huge labor costs.

Li Bin said that NIO hopes that the gross profit margin will become regular in the second quarter of 2020 and double-digit gross profit margin will be achieved by the end of the year.

The 2020 new energy subsidy policy, which was introduced not long ago, set a price threshold of 300000 yuan, only excluding the "power exchange mode", so NIO can continue to enjoy the "special treatment" of national new energy subsidies.

As the most influential new car-building brand in China, NIO seems to be "regardless of cost" investment let NIO get into business difficulties for a time, financing everywhere to survive. The landing of NIO in China has enabled NIO to obtain 7 billion yuan of investment from strategic investors, ensuring normal operation in the short term. Huge expenses should be built on the basis of persistently high sales and positive gross profit margin, reverse the burden of losses, and have a future.

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