AutoBeta(AutoBeta.net)08/20 Report--

According to the official website of the China Securities Regulatory Commission on August 19, the CSRC approved Zhejiang Zero running Technology Co., Ltd. (hereinafter referred to as "Zero running Automobile") to issue overseas listed foreign capital shares and domestic unlisted shares to be listed overseas. According to the relevant regulations, after examination, the reply is as follows: the approved company shall issue no more than 290 million overseas listed foreign capital shares, with a par value of RMB 1 per share, all of which are common shares. After the completion of this offering, the company may be listed on the main board of the Hong Kong Stock Exchange; the 59 shareholders of the approved company will convert a total of 790 million domestic unlisted shares into overseas listed foreign capital shares, and the relevant shares can be listed and circulated on the main board of the Hong Kong Stock Exchange after the conversion is completed.

Zero running car is expected to become the fourth new car-building brand listed in Hong Kong. Zhejiang Zero Technology Co., Ltd. submitted its application for listing to the Hong Kong Stock Exchange on March 17, with China International Capital Corporation, Citigroup, JPMorgan Chase and Jianyin International as co-sponsors of the IPO. According to the prospectus, Zero Auto plans to use the funds raised for smart electric vehicle research and development, enhance production capacity, enhance brand awareness and other directions.

Data show that Zero Automobile was established in December 2015, jointly invested by Zhejiang Dahua Technology Co., Ltd. and its main founders. It is a new energy automobile company focusing on the R & D, design, production and sales of new energy vehicles and auto parts and accessories. At present, Zero has Zero S01, Zero T03 and Zero running C11 models on sale. A total of 43748 vehicles were delivered in 2021, including 634 S01, 39149 T03 and 3964 C11.

It is understood that the Zero run S01 is the first production car launched by Zero running. It was officially launched in January 2019, and the current price is 11.99-150900 yuan. Zero run S01 is not a mature product, official publicity includes low-speed follow, lane maintenance and other functions, but the actual delivery does not carry the relevant functions, resulting in complaints and complaints. In May 2020, Zero launched the second model, Zero run T03, which currently sells for 795-96500 yuan. This mini electric car has brought good sales performance to Zero. However, although mini electric vehicles can provide good market performance, their profit margins are particularly low, especially with the current rising prices of raw materials and shortage of chips, more and more car companies have to raise prices for their products. and many consumers value nothing more than price, the taboo of price increase.

In September 2021, the zero-running car announced the price of the zero-running C11, with a subsidised price of 159800-199800 yuan, which is positioned as a pure electric medium-sized SUV. In May 2022, Zero run C01, the fourth production car under Zero run, began pre-sale. The new car is located in medium and large cars with a pre-sale price of 18-270000 yuan. It is expected to go on sale in the third quarter. Official figures show that orders for Zero run C01 now exceed 83000 units.

In addition to the known Zero C01, Zero will also launch two cars located between 10-150000 yuan and 25-300000 yuan, with internal codes A01 and D01, respectively. In the SUV market, Zero will have two SUV models in the range of 10-150000 yuan, code-named A11 and A12, and an internal C12 model between 20-250000 yuan, priced slightly higher than Zero C11. In addition, above 25-300000, Zero will launch cars codenamed D01, SUV codenamed D11 and MPV codenamed D21.

However, like many new car-building brands, zero-running cars are still losing money. According to the prospectus, the operating losses of Zero Motor from 2019 to 2021 are 730 million yuan, 869 million yuan and 2.868 billion yuan respectively, and the losses attributable to equity holders are about 901 million yuan, 1.1 billion yuan and 2.846 billion yuan respectively, with a total loss of 4.374 billion yuan in three years. Zero said the company expects to continue to incur a net loss in 2022 due to research and development of new models and smart electric vehicle technology, as well as the expansion of production facilities and sales network.

At present, the cash flow of zero running is relatively tight. According to the prospectus, zero-running cars had restricted cash and cash equivalents of 5.714 billion yuan by the end of 2021, while the three Wei Xiaoli companies had cash reserves of more than 20 billion yuan in the same period, which may be the main reason why Zero went public in Hong Kong.

Financing and listing has become a ticket for car-building enterprises in the second half, and zero-running cars want to ease the financial pressure through IPO, which is also inevitable. However, although the new energy vehicle market is still hot, the market sentiment will gradually calm down. In addition, there is no shortage of car brands in the auto market, and if zero runs are not competitive enough, it must not be easy to get financial support from the market. Therefore, how to increase R & D investment, create differential competitive advantage, strengthen the integration ability of upstream and downstream industrial chain and achieve profitability are all urgent problems to be solved.

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