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Weilai 'heavy warehouse' Weilai, or seeks Weilai to be listed in China

by:Yisheng      2021-06-06

After 'sending charcoal in the snow' to NIO, the 'best venture capital' Hefei has reaped great fruits.

On the evening of February 4, Weilai Automobile announced that it would spend 5.5 billion yuan to acquire a 3.305% stake in Weilai China, and at the same time increase its stake in Weilai China by 10 billion yuan. After the completion of the equity acquisition and capital subscription, Weilai will hold a total of 90.36% of the controlling interest in Weilai China.

In September 2020, Weilai Automobile once repurchased an 8.6% stake in Weilai China. In addition to this repurchase, automotive analyst Wang Chenyu analyzed, 'Hefei has almost recovered (the original investment in Weilai China) )principal'.

Weilai stated that the Hefei Municipal Government and its related parties plan to reinvest the proceeds of equity investment in Weilai China to support further cooperation between Hefei and Weilai China.

On the same day, Hefei and NIO signed a framework agreement to deepen cooperation. The two parties agreed to jointly plan and build the Xinqiao Intelligent Electric Vehicle Industrial Park to create a world-class intelligent electric vehicle industrial cluster with a complete industrial chain. According to the agreement, Hefei will increase its support for the smart electric vehicle industry, introduce more industrial chain enterprises to the park, and provide supporting policy support for enterprises in the park in terms of construction, capital, and talents.

NIO China and Hefei will be joined in April 2020. At that time, NIO China had received 7 billion yuan in external strategic financing from strategic investors. These strategic investors include Hefei Construction Investment Holdings (Group) Co., Ltd., SDIC China Merchants Investment Management Co., Ltd., and Anhui High-tech Industry Investment Co., Ltd., etc.

It is worth noting that the injection of external strategic financing has eased the capital shortage for Weilai and ushered in the endorsement of strategic investment by state-owned assets, while also bringing potential pressure to Weilai.

According to the previously exposed gambling agreement signed between Weilai and Hefei State-owned Strategic Investor, after Weilai China receives all the investment from the strategic investor in Phase 1, if it fails to submit an IPO application within 48 months, Completed the listing in 60 months; failed to inject assets into NIO within one year after the entire investment in the first phase; after NIO China received all the investment in the first phase, the vehicle delivery volume was less than 20,000 for two consecutive years Weilai needs to repurchase shares from strategic investors.

'In the long run, in order to complete the gambling agreement, Weilai will definitely seek Weilai to be listed in China. Prior to this, Weilai will repurchase shares. There are multiple factors. Maybe the Hefei government wants to get benefits, maybe If you want to buy back shares and then sell them to investors at a high price, you may also continue to be optimistic about NIO China, want to increase control, and get more benefits after it goes public.' The above-mentioned analyst said.

As for the specific location of NIO’s listing in China in the future, the above-mentioned analyst believes that “Nio’s main body is in Hong Kong and listed in the United States; Nio’s Chinese main body is in Hefei and may be listed in China. Many companies A+H shares are listed, and there are not many companies that are listed on A shares+US stocks at the same time. This kind of company's 'plate' is too big, and two ends of financing.'

Li Bin, the founder of Weilai, revealed on the 2020 Q1 earnings conference call that Weilai China has the possibility of IPO in the Chinese market. Weilai CFO Feng Wei added that it may learn from the experience of companies such as Alibaba to realize the listing of US stocks and Hong Kong stocks.

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