Matters:
Weilai automobile released the performance reports for the fourth quarter of 2021 and the whole year of 2021. In 2021, Weilai’s annual revenue was 36.14 billion yuan, a year-on-year increase of 122.3%, and its annual net loss was 4.02 billion yuan, a year-on-year decrease of 24.3%. In the fourth quarter of 2021, the revenue was 9.9 billion yuan, a year-on-year increase of 49.1%, and the net loss was 2.14 billion yuan.
Ping An View:
The gross profit margin of 4q21 vehicle is 20.9%, and it is planned to be 18-20% in 2022. Weilai delivered 25000 new cars in the fourth quarter of 2021 and 91000 in the whole year of 2021, second only to 98000 of Xiaopeng, ranking second in the delivery volume of new forces of car making. 4q21 Weilai’s vehicle revenue was 9.2 billion yuan, corresponding to 368000 yuan of single vehicle revenue. The gross profit margin of vehicle business reached 20.9%, an increase of 2.8 percentage points over the third quarter, mainly due to the increase in the penetration rate of ternary iron lithium battery at 75 degrees in the fourth quarter. The delivery of 2q22 is expected to be 25000 ~ 26000 sets, and the corresponding revenue is 9.631 billion ~ 9.987 billion yuan. With regard to the price increase of new energy vehicles caused by the rise of raw material costs in 2022, Weilai said that there is no price adjustment plan for the models currently on sale, but the intelligent hardware of the models currently on sale will be upgraded in 2022, and appropriate price adjustment will be made at that time. The company said it would strive to maintain the gross profit margin at about 18% – 20% in 2022.
Three new models will be launched in 2022, and the et7 will be officially delivered on March 28. 2022 is the new year of Weilai. Three new models will be launched throughout the year. The first flagship et7 mass production car of Weilai has been offline in Jianghuai Weilai factory. The second car et5 will be put into operation in neopark, the second production base of Weilai, and is expected to be delivered in September. ES7 is positioned as a big five seat pure electric SUV, benchmarking BMW X5. It is planned to be released in the second quarter. ES7 will be produced in Jianghuai Weilai factory. In view of the fact that et7 will be produced on the same line with the models on sale in Weilai, and ES7 will also be put into operation, the company is transforming and upgrading the Jianghuai Weilai factory. It is expected that it will reach 60jph by the middle of 2022, and the double shift can reach an annual production capacity of 240000 units. The company expects that the production pace of et7 will be slow, and it is expected to reach the normal level in the third quarter. The three new models are based on Weilai’s latest NT2 The 0 platform is equipped with the NAD automatic driving system. The automatic driving hardware reaches L4 level. The goal is to open and subscribe services to some users in 4Q22. As for the brand-new brand, the company said that at present, the core team has been built, and the first batch of products have entered the key R & D stage.
The R & D investment will double in 2022. It is expected that 4q23 will reach breakeven and achieve annual profit in 2024. In 2021, the R & D expenditure reached 4.59 billion yuan (the company expects the annual R & D expenditure to be 5 billion yuan at the beginning of 2021), an increase of 84.6% year-on-year. The company’s gross profit in 2021 can basically cover the annual sales and management expenses, and the continuous expansion of R & D investment is one of the important reasons for the company’s loss. The company plans to double the R & D expenses year-on-year in 2022, and the scale of R & D personnel will reach 9000 by the end of 2022. At the same time, the company expects to reach breakeven in the fourth quarter of 2023 and is expected to make a profit in 2024.
Investment suggestion: we believe that Weilai will deliver three new models in 2022, facing a series of challenges such as supply chain guarantee, multi vehicle co production, infrastructure construction and investment increase with the expansion of production and marketing scale, and the market performance of the three new models based on the new platform is worth looking forward to. In 2022, the company’s R & D expenditure will approach the scale of 10 billion yuan, and the rapid rise of the overall production and marketing scale is more critical. At present, the company has 55.4 billion yuan in cash, but there is still considerable capital pressure compared with the growth rate of the company’s expenditure.
In 2022, auto enterprises will start the competition of brand and intelligence, and the new forces of head car making will enter the key growth stage from 1 to 10. The high-end new energy products of many auto companies will be launched one after another, and equipped with high-power chips. Heavy intelligent new cars and high-level auxiliary driving functions will be tested in the market. For new forces, from 1 to 10, they need to make up for their shortcomings as soon as possible on the premise of maintaining their existing advantages.
We are optimistic about auto enterprises with successful brand building, strong intelligent self-research ability and rapid function implementation. We strongly recommend Great Wall Motor Company Limited(601633) (2333. HK), Geely Automobile (0175. HK), Xiaopeng automobile (9868. HK), Saic Motor Corporation Limited(600104) , and pay attention to the development trend of Weilai automobile and ideal automobile.
Risk tips: 1) the shortage of core parts such as chips will directly affect the delivery volume of the company; 2) The rise of upstream raw materials has led to the decline of the company’s gross profit margin; 3) Market competition intensifies, and the sales volume of newly launched models is lower than expected; 4) New forces invested heavily in R & D, resulting in the deterioration of the company’s financial situation.
