AutoBeta(AutoBeta.net)09/25 Report--

After the announcement of the second-quarter results, the share price of Lulai Motor fell sharply to close at $2.17 today. Affected by a loss of 3.285 billion in the second quarter, the market slumped today and hit a record low of $1.97. for unknown reasons, Xilai announced the cancellation of the scheduled earnings call, saying that more news would be released in the form of announcements, which was very rare after the financial reports of listed companies were released, which was generally questioned by the market reaction. This morning, Xilai Motor again decided to announce that it would hold a conference call on second-quarter results at 20:00 Beijing time. At the time of this release, the conference call was being held, followed by some transcripts.

According to the second-quarter results, Lulai Motor achieved revenue of 1.508 billion yuan in the second quarter, higher than the market expectation of 1.309 billion yuan. In the second quarter, the net loss attributed to shareholders was 3.285 billion yuan, higher than the market expectation of 2.944 billion yuan, compared with a loss of 6.11 billion yuan in the same period last year.

In the first half of 2019, NIO made a cumulative loss of 5.9086 billion yuan, of which the net loss in the first quarter reached 2.6236 billion yuan. According to statistics, the loss in the past four years has exceeded 40 billion yuan.

Under the influence of the recall and public opinion, the low sales of Lulai cars led to the difficulties of the company's large-scale expansion and had to cut expenses and implement layoffs. Li Bin, CEO of Xilai Motor, said: "as of August 31, 2019, the total delivery volume has reached 21670. By the end of the third quarter, the total global workforce will be reduced to about 7800 from more than 9900 in January 2019, and further business streamlining will be achieved through further restructuring and divestiture of some non-core businesses by the end of the year. "

Financing pressure. The "crazy money burning" model of Wei Lai has put more and more pressure on its funds, but now with the fade of the boom and policy changes, great changes have taken place in the capital environment, and investors have become extremely cautious about the investment projects of building cars on the Internet. NIO has difficulties in financing.

NIO delivered 3989 new cars in the first quarter and 3553 in the second quarter. NIO expects to deliver between 4200 and 4400 vehicles in the third quarter.

The following is a transcript of the ongoing earnings call:

[21:03] Lulai: we are carrying out financial leasing programs with seven commercial banks. At present, bank partners provide interest subsidies to our consumers, which is about 10,000 yuan per unit.

[20:53] question: you ES6 spent a lot of money in the listing process, a lot of recall costs in Q2, will it change the situation of burning money in the future?

NIO: we will make further improvements in Q3Q4. First of all, we will lay off staff, we will only spend money on the space. Our financial affairs are very transparent. I hope everyone will look at our capital investment comprehensively and objectively. We just want to clarify the rumors of a loss of US $5.7 billion. We have submitted more than 420 patents worldwide. We certainly need more money to support technology research and development. We are still very confident that we will get more investor support.

[20:48] question: based on the situation and trend of the market, sales volume should not be particularly high in the future. What is NIO's plan for the change of the enterprise? do you think it will break even in the future?

NIO: we have just deployed NIO Space. China's auto market has been declining for 14 months in a row. We still have expectations for ES6. Dozens of Lulai spaces and new models will be launched in the future. We will streamline the staff, next year's budget has not yet been worked out, we will focus on the market in the second half of the year.

[20:48] question: based on the situation and trend of the market, sales volume should not be particularly high in the future. What is NIO's plan for the change of the enterprise? do you think it will break even in the future?

NIO: we have just deployed NIO Space. China's auto market has been declining for 14 months in a row. We still have expectations for ES6. Dozens of Lulai spaces and new models will be launched in the future. We will streamline the staff, next year's budget has not yet been worked out, we will focus on the market in the second half of the year.

[20:43] question: please introduce the distribution strategy, including the construction of NIO space, and how much these costs will be.

NIO: in fact, NIO HOUSE is our partner construction, the cost will be about 1 million yuan each, it is a way to provide consumers with experience. We haven't changed our sales model, but we just pay more attention to partners.

[20:41] question: about the gross profit margin, especially your sales are not high enough, the second quarter excluding the recall cost is only-4%, how to predict the future gross profit margin.

NIO: our gross margin on vehicle sales is-6% in the third quarter and-10% in the fourth quarter. The base model of ES6 will be delivered at the end of the month, and ES6 will deliver a high-end version in Q4, which will also affect gross margin progress.

[20:39] question: the first question is about the recall cost. We can see from the announcement that the recall cost is mainly borne by Wei. The second question is about the trend of profit margin and whether the current trend of gross profit margin will improve.

NIO: we and our supply chain partners are very clear about the call responsibility, and we have made it very clear in the recall announcement. We have reached an agreement with our partners on shared responsibility. In fact, if the recall cost is removed, our gross profit margin is-4%, and the gross profit margin is still based on car sales. For gross profit margin, the overall trend is still negative.

[20:32] question: can you update the financing progress in China, and what other financing methods are there besides issuing bonds? The sales of ES6 have increased, but there is a recall of vehicles. Can you tell us about ES6 and ES8?

NIO: the first financing question cannot be answered. The second problem is that ES6 sales faced challenges in July and August, with most of China's electric vehicle sales falling. We did not make any additional price cuts, which also affected ES6 sales in July and August. The market demand for ES6 is picking up in September, and we think ES6 is very competitive.

[20:26] according to sources, NIO is also planning to split NIO Power, independent financing, hoping to get rid of NIO blood transfusion at the same time, anti-NIO stock price. NIO Power has formed a recharging network, including home charging, power station replacement, fast charging, mobile charging cars and third-party charging facilities, and has deployed more than 100 exchange stations and more than 500 charging vehicles.

[20:21] CFO Xie Dongzhong has just said again that he will reduce the number of employees by the end of the year.

[20:16] as of the end of June this year, the shareholders' equity of NIO common shares was negative 960 million yuan. Earlier this month, Ulai announced plans to issue and sell convertible bonds with a total principal of $200 million to investors, which is expected to be completed by the end of September. Li Bin, a subsidiary of Tencent and founder of Xilai, will each subscribe for $100 million of convertible bonds.

[20:13] in the first half of 2019, the loss of NIO reached 5.937 billion yuan (2.652 billion yuan in the first quarter and 3.285 billion yuan in the second quarter); plus the losses in the three years from 2016 to 2018 were 3.518 billion yuan, 7.562 billion yuan and 23.328 billion yuan, respectively. In other words, the cumulative loss of Lulai Motor reached 40.345 billion yuan in less than four years. According to foreign media statistics, this is equivalent to the accumulated loss of Tesla, an American electric car company, over the past 15 years.

[20:13] NIO plans to cut 1200 jobs, or 14% of its workforce, by the end of September, according to an internal letter. In the second quarter, NIO's sales, general and administrative expenses grew by only 48.6% year-on-year, compared with 71.5% in the first quarter, 130.0% in the fourth quarter and 208.9% in the third quarter of last year.

[20:12] the second-quarter results showed that as of June 30, the balance of cash and cash equivalents, restricted cash and short-term investments was 3.4556 billion yuan, or about 503.4 million US dollars.

[20:11] car delivery in the third quarter is expected to be between 4200 and 4400, an increase of 18.2% and 23.8% month-on-month, while total revenue is expected to be between 1.593 billion yuan and 1.663 billion yuan, an increase of 5.6% 10.3% month-on-month.

[20:10] since June 27, Xilai has recalled a total of 4803 ES8 cars made between April 2 and October 19 last year. The recall is an important reason for the sharp decline in profit margins of Xilai. The company said that if the recall cost of 339 million yuan was deducted, its profit margin on car sales would be-4%, an improvement from-7.2% in the first quarter.

[20:08] as for the decline in car sales, NIO said in the financial report that it was mainly due to the reduction of electric vehicle subsidies in late March and the adverse macro environment. In the notice of subsidy Policy for New Energy vehicles at the end of March, the four ministries lowered the subsidy standard for pure electric passenger vehicles by at least 50% compared with last year.

[20:07] CFO Xie Dongzhong said that the financing of Lai Motor was very successful. The results released yesterday had released complete information. Due to feedback from investors, he decided to reopen this quarterly earnings meeting, but this meeting will not introduce the contents of the financing.

[20:05] the executives who participated in this financial report meeting were mainly Chairman Li Bin and CFO Xie Dongzhong.

[19:51] on September 24th NIO reported better-than-expected revenue and losses for the second quarter of 2019. According to the financial report, the revenue of Lulai Motor in the second quarter was 1.508 billion yuan, higher than the market expectation of 1.309 billion yuan. In the second quarter, the net loss attributed to shareholders was 3.285 billion yuan, higher than the market expectation of 2.944 billion yuan, and a loss of 6.11 billion yuan in the same period last year. In the afternoon of the same day, NIO announced the cancellation of the second-quarter earnings conference scheduled for the day of the release of the results. After the release of the results, Ulay Motor, which is listed on the New York Stock Exchange, plummeted after the opening of US stocks, falling as much as 27.57% at one point to close at US $2.17 / ADS, down 20.22%, and its share price hit an all-time low.

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat