Thanks to the significant increase in annual sales, Ideal Automobile's financial performance improved significantly last year.
On February 26th, the 2023 financial report released by Ideal Automobile showed that its revenue reached 123.85 billion yuan last year, a year-on-year increase of 173.5%, setting a new historical high. Ideal has become China's first new car making force with an annual revenue exceeding 100 billion yuan.
Last year, the ideal net profit reached 11.81 billion yuan, achieving comprehensive profitability since delivery. As of the end of the year, the company's cash reserves reached 103.67 billion yuan. Ideal also submitted a quarterly financial report with a year-on-year double growth in revenue and profit. In the current situation where most new car making forces are losing money, Ideal has achieved profitability for five consecutive quarters and achieved its goal of turning losses into profits for the whole year of 2023.
It is worth noting that the key financial indicators of Ideal Automobile have increased significantly year-on-year, which is related to the impact of various factors such as the pandemic, tight automotive supply chain, and chip shortage on new car manufacturing forces last year, resulting in a lower sales base under unconventional conditions. For the whole year of 2022, the annual sales volume of Ideal Automobile was 133000 units.
The ideal latest financial report data has to some extent exceeded investor expectations. As of the time of writing, Ideal Automobile's US stock market rose by over 7% before trading.
This year, Ideal Auto's sales have been continuously increasing. After achieving its annual sales target of 300000 vehicles ahead of schedule in November, the brand crossed the monthly delivery threshold of 50000 vehicles at the end of the year, and delivered a total of 376000 new vehicles throughout the year. Based on this calculation, the average price of an ideal car last year was 329000 yuan, which is basically the same as the same period last year.
In terms of measuring the health level of the automotive business, the gross profit margin of Ideal Automobile in the fourth quarter was 23.5%, exceeding the high gross profit margin of over 22% when Ideal ONE was popular, and also higher than Tesla's gross profit margin of 17.6% during the same period.
In the view of Li Xiang, CEO of Ideal Automobile, a gross profit margin of over 20% is necessary to ensure the long-term healthy development of the enterprise. Otherwise, it will be impossible to continue investing in long-term investments such as research and development and delivery. The ideal expectation for the company's gross profit margin is 25%.
The first pure electric MPV model under the Ideal brand, MEGA, will be launched in March, marking the brand's official entry into the dual technology development stage of pure electric and extended range. Currently, the market share of Ideal Automobile in the new energy vehicle market above 200000 yuan is 16%, and Ideal hopes to further increase its market share through dual line parallel operation.
The ideal annual sales target is set at 800000 vehicles, and eight products will be sold this year. The sales target for the upcoming facelift of the existing model is set at 400000 units, and the upcoming pure electric MPV model MEGA challenges monthly sales of 8000 units, while the target for the L6 is 30000 units. In the second half of the year, Ideal will also launch three high-voltage pure electric vehicles.
Whether an ideal pure electric product can gain market recognition is still unknown. Huawei's support for Wenjie is also launching a challenge. Even after a price reduction of over 30000 yuan across the entire series at the beginning of the new year, the cumulative delivery volume of Ideal Automobile in January still decreased by 60% compared to the previous month to 31200 units, losing to the single model of Wenjie's new M7. The latter ended Ideal's lead for the entire year of 2023 with a sales advantage of 1800 units, becoming the first sales champion of the new year.
The official announcement of Ideal Automobile subsequently stated that it will significantly increase investment in research and development, continuously improving its technological capabilities in the fields of intelligent driving, intelligent space, and intelligent electric vehicles. Currently, intelligent driving is gradually becoming the core factor affecting the purchasing decisions of new energy consumers, and the Wenjie New M7 also regards intelligent driving as an important selling point.
In the first quarter of this year, Ideal Automobile is expected to deliver 100000 to 103000 vehicles, a year-on-year increase of 90.2% to 95.9%; Expected year-on-year revenue growth of 66.3% to 71.3%.
In terms of research and development expenses, Ideal Automobile spent 3.49 billion yuan in the fourth quarter, a year-on-year increase of 68.6%. In 2023, this number reached a historic high of 10.59 billion yuan. It is expected that in the second quarter of this year, the city NOA without graphics will be opened to all cities nationwide, upgrading OTA to all assisted driving vehicles.
The rapid growth rate of sales, general and administrative expenses of Ideal Automobile has become a hidden concern. The haze has not completely dissipated in the fourth quarter, and its expenditure of 3.27 billion yuan increased by nearly 30% compared to the third quarter of 2023, doubling from the same period in 2022.
As of the end of 2023, Ideal Automobile has 467 retail centers nationwide, covering 140 cities. The Ideal Flagship Retail Center opened in January in four cities: Beijing, Shanghai, Guangzhou, and Shenzhen. These store displays have been carefully designed and are all located in the core of the business area, which is ideal or intended to further enhance brand awareness.
At the same time, Ideal is also investing resources in the construction of supplementary energy networks. By the end of 2024, Ideal Automobile will launch 2000 supercharging stations nationwide, with the goal of achieving 60% coverage of the core urban areas of third tier and above cities.