The first Chinese car manufacturing new force with annual revenue exceeding 100 billion is about to be born.
On November 9th, Ideal Automobile (LI. NASDAQ/2015. HK) disclosed its financial report for the third quarter of 2023, with delivery volume and multiple core financial data reaching new historical highs.
In the third quarter, Ideal Automobile delivered a total of 105108 new cars, a year-on-year increase of 296.3%, becoming the first new Chinese automaker to break through the 100000 mark in sales in a single quarter.
In the current quarter, Ideal Automobile achieved a revenue of 34.68 billion yuan, a year-on-year increase of 271.2%. The operating profit and net profit were 2.34 billion yuan and 2.81 billion yuan respectively, achieving profits for four consecutive quarters. The gross profit margin of Ideal Automobile in the third quarter was 22.0%, maintaining a healthy level.
In the first three quarters of this year, Ideal Automobile's operating revenue reached 82.12 billion yuan, a year-on-year increase of 197.14%, and achieved a net profit of 6.057 billion yuan.
As of the end of the third quarter, Ideal Automobile had a cash reserve of 88.52 billion yuan, with sufficient funds to ensure its long-term firm investment in research and development and new product layout, and to continuously enhance market competitiveness.
Throughout China's listed car companies, Ideal Automobile's profitability has already been on the forefront, and its net profit in the third quarter surpassed that of established car companies such as Changan Automobile and Guangzhou Automobile Group.
From the current trend, the annual sales of Ideal Cars are expected to exceed 350000 units, with revenue exceeding 100 billion yuan, and becoming the first new Chinese automaker to achieve annual profits.
Our healthy business capabilities will support Ideal Automobile's long-term and firm investment in research and development. This includes the significant leading charging capacity of the 5C pure electric vehicle, which is a reflection of our past research and development investment. "Li Xiang, Chairman and CEO of Ideal Automobile, said on the financial report conference call.
Continuously increasing market share
In fact, since the beginning of this year, the competition in China's new energy vehicle market has been extremely fierce, and price wars have brought huge challenges to the entire industry.
Under pressure, the continuous growth of sales and the continuous increase of market share are the main reasons for supporting the continuous improvement of ideal car performance and achieving profitability.
The three models under Ideal Automobile are all in leading positions in their respective market segments.
According to data from China Automotive Corporation, in the third quarter, the Ideal L9 won the championship in full-size SUV sales, with the Ideal L7 and L8 models firmly ranking among the top two in sales of mid to large SUVs. In the new energy vehicle market of over 200000 yuan, the sales of Ideal Cars remain in the top three, with a market share increasing from 10.9% in the first quarter and 13.7% in the second quarter to 15.4% in the third quarter.
In October of this year, Ideal Automobile broke the milestone of monthly sales of 40000 vehicles.
In the high-end new energy vehicle market, Ideal Automobile has established a continuous leading market position.
At present, the penetration rate of the new energy vehicle market has exceeded 35%, crossing the innovation diffusion gap and entering the early Volkswagen era. The concentration effect of top car companies will become increasingly apparent, and I believe that the accumulated user base and market share will continue to increase in support of the delivery volume and market share of Ideal Cars in the increasingly fierce market share competition in the future. "said Zou Liangjun, Senior Vice President of Sales and Services of Ideal Cars.
Indeed, the Chinese automotive market has shown two major adjustments this year: firstly, new energy vehicles are accelerating their replacement of fuel vehicles, joint venture brand sales are shrinking, and the market share of Chinese brands continues to increase; Secondly, the industry is gathering at the top, with leading new energy enterprises represented by BYD, Ideal Automobile, Tesla, etc., continuously increasing their market share.
Of course, for young ideal cars, there is still a lot of room for imagination to increase their scale.
In addition to maintaining the current market performance of car models, the next focus is to cover more consumer groups and further enrich the product matrix.
In terms of direct sales network, as of October 31, 2023, Ideal Automobile has 372 retail centers nationwide, covering 133 cities.
According to Li Xiang, in the fourth quarter, Ideal Automobile will continue to accelerate its store expansion speed, with a goal of having over 400 stores by the end of this year, covering 140 cities nationwide, further helping Ideal Automobile increase its market share in the Chinese new energy vehicle market.
At the product level, in addition to the upcoming release of the first pure electric model MEGA of Ideal Automobile, which has received much industry attention, Ideal Automobile is expected to release four new products in 2024, which will also be the year with the most abundant products since the establishment of Ideal Automobile.
In the first half of 2024, the Ideal L6 will be released for younger families. Three pure electric products will also be delivered in the second half of the year. The release and delivery rhythm of the model will continue our past excellent tradition. Li Xiang said that the continuous strong sales performance of the Ideal L series and the delivery of next year's pure electric new model will support the further large-scale replacement of traditional fuel vehicles by Ideal Cars in 2024.
Driving into a pure electric race track
From being questioned about the technical route to becoming a market leader, many pure electric vehicle companies have entered the market for extended range electric vehicles, from the latest launch of mass-produced cars in "Weixiaoli" to leading sales, struggling from the life and death line to profitability. In the past few years, Ideal Car has won the first battle of "from 0 to 1" beautifully.
Now, Ideal Automobile is about to enter a new track, showcasing its strength in pure electric vehicles.
As the first pure electric model of the Ideal Car, the disruptive exterior design of the Ideal MEGA has attracted much attention from the outside world since its official appearance image was announced. It is understood that the ideal MEGA integrates the latest technological achievements of the ideal car in the pure electric field, achieving a 12 minute charging range of 500 kilometers. At the same time, in order to achieve extreme low energy consumption, the ideal MEGA adopts an extremely low wind resistance design, with a wind resistance coefficient of only 0.215.
At present, the Ideal MEGA is progressing smoothly and will be officially released in December this year, with delivery starting in February next year.
In terms of energy replenishment system, Ideal Automobile continues to expand the construction of a 5C supercharging network. As of now, Ideal Automobile has built and operated 130 Ideal Super Charging Stations along the national highways.
It is understood that by the end of this year, Ideal Automobile will complete the construction of 300 high-speed super charging stations, covering the four major economic belts of Beijing Tianjin Hebei, Yangtze River Delta, Greater Bay Area, and Sichuan Chongqing. In the future, we will accelerate the laying of ideal overcharging networks, encrypt and cover the national high-speed network, and promote the layout of urban overcharging stations to enhance users' full scenario recharge experience.
Entering the pure electric race track, Ideal Cars will face a new round of challenges.
Faced with more intense competition in the pure electric vehicle market, Li Xiang also has deep considerations. He emphasized that all pure electric products of an ideal car will adhere to three important principles: breakthroughs in charging, breakthroughs in space, and breakthroughs in styling.
We have made a higher dimensional breakthrough in the three most important value points for users: the sense of security brought by charging, the sense of value brought by space, and the sense of longing brought by leading styling, "Li Xiang said.
To continuously achieve breakthroughs in various aspects, it is necessary to continuously increase the research and development of Ideal Cars.
The research and development expenses of Ideal Automobile in the third quarter were 2.82 billion yuan, a year-on-year increase of 56.1%.
Ideal Automobile not only focuses on research and development efficiency, but also lays out forward-looking technology research and development. Based on the "dual energy strategy", it promotes the technological layout of extended range electric, high-voltage pure electric, intelligent driving, intelligent space, as well as system research and development and forward-looking research and development. It constructs a long-term technological moat for the enterprise and accelerates the strategic goal of becoming a global artificial intelligence enterprise by 2030.
The ideal intelligent driving of automobiles is continuously upgrading.
In September, the Ideal L series launched the OTA version 4.6 system to users, adding 25 new features and optimizing 10 experiences around the intelligent cockpit experience, creating more convenient and closer to life voice interaction functions and APP connectivity experiences for home users.
In addition, Ideal Automobile has created the first urban NOA solution based on a large model that does not rely on high-precision maps. At the same time, the ideal car uses the BEV large model to connect highways and cities. After switching to the large model algorithm architecture, the high-speed NOA functions of the ideal AD Max and AD Pro platforms will be significantly optimized.
It is understood that Ideal Automobile plans to push the official version of AD Max 3.0 software to users this year, providing full scenario NOA capabilities. In the first half of next year, Ideal Automobile will also promote the software of AD Pro 3.0 to users, greatly improving its ability to assist in driving.
Continuously challenging the limits of growth
This year, Ideal Automobile has reached a critical milestone.
Continuously making quarterly profits and expected to achieve annual profits for the first time, Ideal Automobile has achieved a leading position in the new forces of Chinese car manufacturing.
However, in the next three years of the smart electric vehicle elimination phase, competition is not only at the product level, but also a comprehensive competition of technology, products, and delivery capabilities, without any shortcomings. As industry competition intensifies, elimination races will also accelerate, and only by becoming a few top players can they persevere to the end in the marathon race.
From the perspective of the first development process of new forces in car manufacturing before this, efficiency is crucial.
With the growth of enterprise scale, Ideal Automobile is accelerating towards a revenue of hundreds of billions. As the size increases and the organization expands, how to continuously improve the operational efficiency of the enterprise is a problem that ideal cars need to consider.
How to transform Ideal from an initially successful new energy vehicle enterprise into a leading enterprise with long-term competitiveness and sustainable development is the goal that growing Ideal cars need to constantly challenge.
In fact, in order to meet the development needs of billions of enterprises, since the end of 2022, Ideal Automobile has launched a matrix organization upgrade, adding a new business department, supply department, process department, organization department, and finance department to the horizontal physical department on the basis of the strategy department and product department. The process and organization have been comprehensively upgraded, and will be fully implemented and continuously optimized in the next three years, forming an operational loop of the matrix organization. With the upgrading of the organization, the operational efficiency of the enterprise will be comprehensively improved.
Ideal cars actively practice corporate social responsibility while accelerating their own development.
On September 28th, in the latest ESG rating for listed companies released by the international authoritative index agency MSCI, Ideal Automobile received the MSCI ESG "AAA" rating, becoming the first Chinese car company to receive this rating. It has been fully recognized in terms of product carbon footprint, clean technology development prospects, product quality and safety, corporate governance, and talent management.
In the future, we will uphold the value of surpassing user needs, creating the most outstanding products and services, and continuously challenge the limits of growth, "Li Xiang said.
This article is for reference only and does not serve as an investment basis