Recently, Weilai announced the Q2 financial report for 2022. According to the financial report, its revenue in the second quarter was 10.29 billion yuan, a year-on-year increase of 21.8%. It is worth mentioning that this is also the first time that Weilai’s revenue has exceeded 10 billion. However, just when we expected Weilai to turn losses into profits, we found that the loss of Weilai Automobile in the second quarter was as high as 2,757.5 million yuan, which was 369.6% higher than that of the same period last year and 54.7% higher than that of Q1 this year.
In fact, Weilai also has a number of new cars listed this year, and the product line is not thin, at least it is much stronger than ideal. Moreover, Wei has been insisting on the idea of changing electricity for many years, which is also one of the important solutions that can effectively solve the anxiety of pure trams. Then the question is coming. Since the outside world is so optimistic, why did Weilai fall into the strange circle of "selling more but losing more"?
Thanks to a lot of sales, why can’t Wei Lai make money?
In fact, Weilai’s revenue performance is really bright enough, but the problem lies in the gross profit margin of Weilai’s vehicle sales. Presumably, you should have heard the news about the price increase of auto parts some time ago. Especially in the second quarter, due to the sharp increase in battery costs, the gross profit margin of Weilai vehicles fell to 16.7%. In the first quarter of this year, the gross profit margin of Weilai vehicle was still 18.1%, which was as high as 20.3% compared with the same period last year.
In fact, the pricing of Weilai products is not low, but from the perspective of gross profit margin, the cost of Weilai in other places has obviously dragged down the gross profit margin of the whole vehicle. If Weilai can’t get a profit margin within the current price range, then Weilai’s future development prospects are still grim.
In addition, Weilai’s increasing investment in technology research and development is also an important reason for the loss. According to the financial report, the R&D expenses of Weilai Q2 reached 2,149.5 million yuan, an increase of 143.2% compared with the same period last year. The expenditure cost here mainly lies in the increase of personnel cost, the design and development cost of new products and technologies.
Although, we believe that an enterprise wants to develop stably for a long time, it must be inseparable from technological innovation and research and development, but we must know that in the past six quarters, Weilai Automobile has accumulated losses of 15.14 billion yuan. How long will Weilai’s cash flow last if it has been in a state of increasing income without increasing profits?
Sales have been overtaken by the second camp. Is there any chance for Weilai?
Some time ago, major new energy vehicle companies announced their own sales in August. Wei Lai, among the new forces, has been surpassed by Nezha and Zero Run, two former younger brothers. According to the data, in August, the sales volume of Weilai was only 10,677, that of Nezha was 16,017, and that of retail was 12,525. This is awkward for Wei. After all, I used to get the first place in the sales list from time to time, but now I am surpassed by my younger brothers. It is really indecent.
According to the financial report data, the delivery volume of Weilai vehicles in the second quarter reached 25,059, including 3,681 ES8, 9,914 ES6, 4,715 EC6 and 6,749 ET7, which was 14.4% higher than that in the second quarter of 2021 and 2.8% lower than that in the first quarter of 2022. Regarding the decline of data, Weilai’s explanation is mainly influenced by epidemic situation, extreme weather and supply chain.
Of course, we all know that these excuses are just excuses. At present, the biggest problem of Weilai is actually the alternation of new and old products. Moreover, whether Weilai’s car products can continue the strength of the previous SUV market and make a big splash in the same level remains to be verified by the market. After all, for domestic consumers, everyone’s interest in SUV is obviously stronger than that of car products.
Then, it is not known whether Weilai can rely on new products to regain the top spot in the sales of new forces. But for investors, if you don’t make money and your sales position is unstable, why should I invest my money in you?
Will the strong rise of the world shake Weilai’s market position?
In fact, from the data in August, the former "Wei Xiaoli" has declined in sales. Aside from the big environmental factors, the strong rise of competitors brings a stronger sense of oppression. For example, although traditional car companies are late in the field of new energy, after all, the new energy track is not a sprint performance, but a marathon.
In the sales in August, we can see that the sales of Ai ‘an, which is backed by GAC, have far surpassed those of a number of new players. Of course, Ian also likes to "package" himself as a member of the new forces, but in fact he just wants to paint a tiger as a cat. Besides, the market of Ai ‘an is mainly at the B end, which is not worth mentioning. In addition, the rise of krypton is a bit surprising to us. After all, although it is backed by Geely, the sense of existence is not very strong. However, judging from the current extremely embarrassing momentum, the possibility of confronting Weilai will not be ruled out in the future.
Of course, what we are more optimistic about is actually AITO asking the world. As a new brand that has been in the limelight recently, AITO has indeed achieved good results. In particular, it has set a record of the fastest monthly sales of over 10,000 in China, which is enough to attract people’s attention. Of course, the reason why the series of products in the world can achieve such results is naturally inseparable from Huawei’s technology and channel support.
In terms of technology, Wenjie series has Huawei’s advanced three-electricity technology, especially the pure electric version of Wenjie M5 has been officially listed, so it is not too far away. Therefore, after bursting the ideal, it may be Wei’s turn to ask the next benchmarking object. You know, apart from the advanced power system, the car is also equipped with HarmonyOS OS, and it is definitely a leader in equipment interaction. From this point of view alone, the gap between Weilai and the world in product strength is still quite large.
Furthermore, according to reliable information, the M5 EV will be displayed in 180+ cities and 820+ Huawei stores nationwide. It is not difficult to see from this news that Huawei’s more than 820 stores will help the world to quickly complete product coverage, which is also far behind Weilai and the ideals. Therefore, although AITO started late, but relying on Huawei as a big tree to enjoy the cool air, the chances of overtaking in corners in the future are still quite great.
Write it at the end
In our view, it is also very important to ensure the normal operation of capital flow in many difficulties that Weilai faces. I don’t know how many people still remember that in June this year, a paper report by Grizzly Research, a foreign short-selling institution, targeted Weilai and pointed out that its performance was fraudulent. In this regard, Weilai also set up an independent Committee of the board of directors internally and conducted an investigation with the assistance of a third party. Of course, the survey results must prove that the short report is unfounded. But then again, our own people investigate our own people. Although there is a so-called third party, how convincing can the survey results be? I believe that the eyes of the masses are discerning. I just don’t know what the investors’ eyes are like.
