80400 vehicles, up 52.9% year on year; The revenue was 25.6 billion yuan, up 36.4% year on year; The adjusted net profit was 1.3 billion yuan (excluding equity incentive expenses), and the gross profit margin was 20.6%, which remained healthy and steady.
This is the answer sheet of the first quarter of 2024 delivered by Ideal Auto, and it has made profits for six consecutive quarters since the fourth quarter of 2022. At present, it is the only new force auto enterprise with excellent operating quality and continuous profits in China, which is particularly valuable at a time when the competition in China's new energy market is extremely fierce and the price war has brought great challenges to the whole industry.
Since the beginning of this year, the price war has not stopped, and has begun to "bite back" - relying on the brutal "price for volume" strategy, auto companies have won market share but lost profits in the short term. When selling one car and losing one car becomes the norm, and the new energy vehicle market is blossoming, the "blood loss" situation of the industry at the cost of consuming the profitability of the vehicle enterprises will continue.
However, the intensification of market competition and the series of challenges of Ideal itself in the first quarter also made Ideal Auto have to rethink its strategic rhythm - no longer blindly rushing forward in pursuit of sales, but directly facing the real challenges.
"But I must admit that since this year, we have faced multiple challenges from internal operations and changes in the external environment, and the performance of the first quarter has fallen short of our expectations at the beginning of the year." Li Xiang, chairman and CEO of Ideal Auto, said frankly at the first quarter financial report conference of Ideal Auto in 2024, "In the face of problems, we actively and quickly made adjustments, comprehensively launched and implemented organizational upgrading and process optimization, improved internal operating efficiency and decision-making quality, and strive to better focus on the creation and transmission of user value.
Market share continued to increase
Gross profit rate remains high
In the first quarter of this year, China's car market was still in the recovery period, and the impact of the price war triggered the wait-and-see mood of consumers. In addition, the concern for some new cars and the expectation of the trade in policy made the market environment grim. According to the data of the Passenger Transport Federation, in the first quarter, China's passenger car market grew by 13.1% year on year, and the sales of new energy vehicles grew by 34.3% year on year. The trend of new energy accelerating the replacement of fuel vehicles is still obvious.
In fact, due to the impact of the price war, many Chinese auto companies are under pressure. From the first quarterly reports of the first nine A-share listed leading passenger car companies, most of their revenues or net profits were affected to varying degrees, and only BYD, Great Wall Motors and Celis saw both revenue and net profits grow.
This shows the pressure of intense market competition on enterprise operation from the side, but also proves that new energy vehicles are accelerating to replace fuel vehicles as the profit growth point of the automotive industry.
In contrast, the revenue, delivery volume and gross profit rate of Ideal Car in the first quarter were all outstanding.
In March this year, the ideal L9, L8, and L7 of 2024 model were launched, and the configuration was comprehensively upgraded; In the same period, the first high-voltage pure electric MPV ideal MEGA was launched and delivered on March 11. Driven by the strong product force, 80400 ideal cars were delivered in the first quarter, with a year-on-year growth of 52.9%, much higher than the overall market (24.9%). At the same time, the market share of the ideal brand in the new energy vehicle market with a price of more than 200000 yuan reached 13.65%, up nearly three percentage points from 10.88% in the first quarter of last year.
For the new car making forces in the growing period, the gross profit rate of vehicles is an important indicator to determine whether they have profitability and the profit space of enterprises.
"We believe that as a healthy enterprise, sales volume and gross profit margin are two of the most important business indicators. As an automobile enterprise that has been established for nine years, Ideal Automobile has always demanded itself with such business indicators," Li Xiang said.
Despite the severe market situation in the first quarter, the ideal car still maintained a gross profit rate of more than 20%, and its cash reserves reached 98.9 billion yuan. Ideal car still maintains good profitability, stable cash flow and risk resistance.
In addition, the ideal car has made adjustments on the product side and decided to postpone the launch plan of pure electric SUV, which will be released in the first half of next year.
First, Li Xiang said that the decision was made mainly for two reasons.
Secondly, enough self operated overcharge piles are necessary for the sales of medium and high-end pure electric SUVs. Ideal Auto believes that when the number of self operated overcharged piles is close to that of Tesla China, it is the right time for the product to be launched into the market.
Third, the ideal goal is to build more than 2000 overcharging stations by the end of this year, and the number of charging piles will exceed 10000. As of May 19, 404 overcharging stations with 1770 charging posts had been opened for operation.
Fourth, the ideal car needs to be upgraded and more booths and stores added. Li Xiang said that the number of store booths is very important for sales of multiple models and price ranges. If it is necessary to support the sales volume of a new model exceeding 10000 yuan, about 500~600 booths will be added nationwide, otherwise the problem of increasing the number of products without increasing the sales volume will arise.
Fifth, "This is the problem encountered by the ideal L8 in the past few months. The number of L8 booths has decreased by 40%. We are now restoring the number of L8 booths. "
The gap in the pure electric market for one year has made Ideal Auto focus on the L series incremental electric vehicles this year. The official expectation for the monthly sales performance in the coming months is very optimistic.
According to Li Xiang, the ideal L6 has been widely recognized. Its locked order volume has reached 34000 vehicles, and its production capacity will exceed 20000 in June. The ideal L7, L8 and L9 adopt a new price system, and the order volume continues to grow. There is no plan to reduce the price later.
"The launch of Ideal L6 will further optimize our product portfolio. In addition, we have taken a series of action plans, including good cost control ability, continuous organizational efficiency improvement, etc., which will also bring about further improvement in gross profit margin." Li Tie, CFO of Ideal Auto, said at the financial report communication meeting.
Looking forward to the second quarter, the expected delivery volume of ideal vehicles is 105000 to 110000, with a year-on-year growth of 21.3% to 27.1%; The total revenue was 29.9 billion yuan to 31.4 billion yuan, up 4.2% to 9.4% year on year.
Straight face period
Through storm
For the new car manufacturing industry integrating technology and manufacturing, while looking for and practicing new business models and channel changes, it is also experiencing unknown challenges. The key is how to face the cycle and form a stronger system capability to ride through the industry storm.
When it comes to the ideal car, facing problems, reflecting quickly and adjusting in time have always been the value foundation of this company. The rapid adjustment of products, prices and organizations has been carried out in more than two months. For the ideal of more than 30000 people, the execution is not slow.
Li Xiang admitted in his internal open letter in late March that he had misjudged the rhythm of the pure electricity market. "We mistakenly operate MEGA from stage 0 to stage 1 (commercial verification period) as from stage 1 to stage 10 (rapid development period)."
Li Xiang also gave his own reflection: from top to bottom, he paid too much attention to sales and competition, and his desire exceeded value. Next, we will focus on users and efficiency, and return to the improvement of user value and operating efficiency.
At the beginning of April, Ideal Auto made rapid changes in its organizational structure and announced the launch of matrix organization 2.0 upgrade, involving the adjustment of organizational structure of multiple departments. This is the biggest internal adjustment after the upgrading of the matrix organization of the ideal car launch by the end of 2022.
"The core change of our organizational adjustment this time is the establishment of a quality operation team. In order to enable the business to focus on making high-quality decisions, it does not need to spend a lot of time on repeated operations to improve the efficiency of implementation." Li Xiang said that it generally takes 12 to 24 months to see significant results in organizational upgrading, and it will be clearer in 2025.
At the same time, Ideal Auto will explore the overseas market as a new growth point. Zou Liangjun, Senior Vice President of Ideal Sales and Service, revealed that this year, it is planned to establish after-sales service systems in Central Asia and the Middle East, and try to select appropriate agents to expand the market in countries and regions other than Western Europe and North America.
In addition, ideals in the field of intelligent driving are also catching up. Ideal Auto said that NOA, a national road generic city without a map, also launched a public test for thousands of users in May, and is expected to upgrade to all AD Max vehicles through OTA in the third quarter of this year.
In fact, in the short term, new energy vehicle enterprises need to rapidly improve their scale, constantly reduce costs, and improve their efficiency to survive in the knockout phase; In the long run, as the automobile industry enters a period of comprehensive reshuffle, new energy vehicle enterprises need to adhere to the long-term principle, continue to increase investment to improve the core competitiveness of products and brands, and establish the core values of enterprises that are widely recognized and sustainable.
On May 21, Morgan Stanley released the updated valuation report of Ideal Auto. According to the report, although the first quarter performance of the ideal car was lower than expected, the negative sentiment of the current market was exaggerated and the valuation was too low. With the recovery of sales volume in the second quarter, the control of new product portfolio and operating costs, Morgan Stanley maintained confidence in orders and gross profit margin, and gave the target price of the ideal automobile US stock at 53 dollars and Hong Kong stock at 205 dollars.
There is no permanent winner in the real business war. The company fundamentals of the ideal car are still solid, and short-term problems are not enough to shake the fundamentals. With the deepening of matrix organization adjustment and the promotion of order conversion by the new product price system, further results are expected to be released in the second quarter. The ideal of starting again still has the potential to subvert the industry pattern.
This document is for reference only and is not used as an investment basis
