Beijing, February 27th (Xinhua Finance and Economics) - On February 27th, Hong Kong stock market Ideal Auto opened high with a short jump. As of 11:00 am on the 27th, Ideal Auto rose 18.99% to HKD 166.800. Overnight, the US stock market of Ideal Automobile closed up 18.79% at $41.34.
Previously, Ideal Automobile released its financial reports for the fourth quarter and full year of 2023. Data shows that in the fourth quarter of 2023, the company achieved a revenue of 41.73 billion yuan, compared to 17.65 billion yuan in the same period of 2022, a significant increase of 136.4% year-on-year, exceeding market expectations; In 2023, Ideal Automobile achieved a revenue of 123.85 billion yuan, a year-on-year increase of 173.5%, and achieved the goal of annual revenue exceeding 100 billion yuan as scheduled.
Ideal's revenue exceeded 100 billion yuan last year
On February 26th, the financial report released by Ideal Automobile showed that in 2023, Ideal Automobile's revenue was 123.85 billion yuan, a year-on-year increase of 173.5%, making it the first new force automobile company in China to break through 100 billion yuan in revenue; The net profit reached 11.81 billion yuan, turning losses into profits for the first time in the year. The gross profit margin for the year was 22.2%, making it the first new force car company in China to achieve annual profits. Among them, the net profit of Ideal Automobile in the fourth quarter was 5.75 billion yuan, with a gross profit margin of 23.5%; In 2023, research and development expenses reached 10.59 billion yuan, a year-on-year increase of 56.1%.
Ideal Automobile is expected to have a revenue of 31.25 billion to 32.19 billion yuan in the first quarter of this year, a year-on-year increase of 66.3% -71.3%; The delivery volume was 100000 to 103000 vehicles, a year-on-year increase of 90.2% -95.9%.
Li Xiang, Chairman and CEO of Ideal Automobile, stated that the significant growth in scale, continuous deepening of research and development, and continuous improvement in operational efficiency have driven Ideal Automobile to achieve its "best financial performance in history" in 2023. In the fiercely competitive new energy vehicle market of 2023, Ideal Automobile achieved excellent results with three models of the Ideal L series, with a year-on-year increase of 182.2% in delivery volume, reaching 376000 units, becoming the sales champion of new energy vehicles worth over 300000 yuan in the Chinese market.
In addition, he also said, "2024 will be an unprecedented product year for Ideal Automobile, with four extended range models and four pure electric models. We will significantly increase research and development investment, continuously improve intelligent driving and other capabilities. Supported by rich products, strong product strength, and a more efficient production and supply and sales system, we will challenge the goal of delivering 800000 vehicles annually."
Not considering markets below 200000 yuan in the short term
On March 1st, Ideal Automobile's first pure electric product, Ideal MEGA, and the 2024 Ideal L series will be launched, and the delivery of the new models will further boost sales. Liu Jie, Vice President of Business at Ideal Automobile, said, "Ideal MEGA is a newly designed MPV model for the Chinese family, and also the world's first mass-produced Kirin 5C battery equipped with the joint research and development of Ideal Automobile and CATL."
According to a research report by Pacific Securities, in the first quarter of 2024, new cars such as the Wenjie M9, Ideal MEGA/L series facelift, and Xiaomi SU7 were successively released or delivered, and domestic brands are making every effort to create a new energy explosive product matrix, ushering in a new round of product cycle in the industry.
It is worth noting that the market below 200000 yuan is a mass economy market and also a mainstream market in the automotive market. BYD and others have established their presence in this mainstream market, and NIO plans to enter this market segment with the help of a second brand, but Ideal Automobile is not allowed to enter this market.
Currently, the prices of the three products launched by Ideal Automobile are all above 300000 yuan, and they are extended range hybrid products. According to the plan, the fourth product of the L series, L6, will be launched in the second quarter. This car is a mid size SUV with a price range of 200000 to 300000 yuan, making it the lowest priced product among the current L series products.
"In the fourth quarter of this year, the new energy vehicle market with a price of over 200000 yuan will see the top three brands eating 70% of the market share, not CR5 (the top five in market size), but CR3's top concentration, which is more concentrated than gasoline vehicles and no different from smartphones," Li Xiang said.
Accelerated domestic substitution in the luxury car market
At present, the new forces of Chinese car manufacturing represented by Ideal are chasing and catching up with joint venture cars in the automotive market with a price of 300000 yuan or more.
According to a research report by Huaan Securities, the 300000 to 400000 yuan automotive market is currently one of the fastest growing tracks in terms of independent substitution rate, and has considerable value. The market share of independent brands has increased from 4.6% in 2018 to 29.78% in 2023, and is maintaining an accelerating growth trend. The rapid increase in self substitution rate in this stage is mainly due to the high-end effect of China's independent brands, among which Ideal has made a significant contribution.
However, the above research report also indicates that the penetration rate of new energy in the 300000 to 400000 yuan automotive market has increased from 5.24% in 2018 to 40.17% in 2023, maintaining a relatively high growth rate. The overall new energy rate is higher than that of domestic brands, which means that domestic brand new energy vehicle models also need to cope with competition from joint venture electric vehicles.
In addition to ideals, brands such as Wenjie have also achieved significant sales growth, and these brands are also aggressively attacking the luxury car market. In January 2024, Wenjie ranked first among new car manufacturers with a delivery volume of 32973 units, with a month on month increase of 34.76% in sales, making it a rare car company to achieve a month on month increase in sales. In the same month, Ideal Automobile ranked second among new car manufacturers with a delivery volume of 31165 units, with sales increasing by 105.8% year-on-year.
According to a research report by Ping An Securities, in the high-end new energy vehicle market, Tesla is constrained by production capacity bottlenecks and affected by the pace of vehicle launch (the new car is expected to be the updated Model Y in 2024). It is expected that the sales of its Shanghai factory will remain the same as in 2023, and it is expected that Ideal and Huawei will be an important increment in the high-end new energy vehicle market in 2024.