New energy vehicles, the darling of capital, don’t seem to be doing well recently.
As of the close of US stocks on Tuesday, NIO closed down 10.23%, with a total market value of about 6.8 billion US dollars, or about 45 billion yuan, and Xiaopeng Motors closed down 10.89%, with a total market value of about 4.6 billion US dollars, or about 30 billion. In RMB, Li Auto closed down 3.14%, and its total market value evaporated by about 945 million US dollars, or about 6 billion yuan.
If the total market value evaporated by the three companies is calculated, their market value has evaporated by more than 80 billion yuan. Although the stock prices of the three Chinese concept stocks of new energy vehicles rebounded on the following day, short-term investors seemed to hesitate, worried about whether there was a bubble. After all, Weilai has increased by more than 10 times this year. Li Auto and Xiaopeng Motors, which landed on the US stock market in July and August this year, have also created a cumulative increase of nearly 200% in just a few months.
At this stage, is the new energy vehicle has come to an end? Is there really a huge bubble in it?
BYD Han (Image source: Visual China)
share price? Foam?
“Even my mother knows to buy new energy vehicle stocks.”
A-share investor Xiao Hong (pseudonym) told the author that his mother has been investing in stocks since she retired. Especially this year, due to the epidemic, his mother rarely goes out, so she spends more time investing in stocks.
According to Xiaohong’s introduction, his mother’s education level is not high, and he doesn’t know any financial statements, but recently he has paid attention to the topic of new energy vehicles.
Xiaohong said: “My mother only looked at A-shares at first, and then suddenly found that BYD has risen a lot. In October, it was only about 100 yuan, and now it has reached more than 190 yuan.”
BYD can be regarded as the leader of A-share new energy. Since the beginning of this year, its share price has been rising all the way. Since the beginning of September, the share price has doubled, surpassing SAIC and becoming the first stock in China’s automobile market value. In early November, it became the first A-share market value exceeding 500 billion yuan. car company.
“But the most inexplicable thing for us is that on the day of Double 11, this leading stock plummeted inexplicably.” Xiaohong said.
On November 11, BYD hit the daily limit and finally closed down 9.98%, evaporating 49.8 billion yuan in market value. Judging from the news of the day, BYD does not seem to have any negative news.
Xiaohong described to the author: “It’s like a roller coaster. The day before, you find that your position is red, and the next day, when it falls, you will feel that money is like snowflakes, flying away.”
At the end of October, BYD released its third quarterly report this year. BYD’s third-quarter net profit was 1.75 billion yuan, a year-on-year increase of 1362.66%. In the first three quarters of this year, BYD achieved a total operating income of 105.023 billion yuan, a year-on-year increase of 11.94%; the net profit attributable to shareholders of listed companies was 3.414 billion yuan, a year-on-year increase of 116.83%.
In the November sales report released by BYD on December 3, the company sold 26,690 new energy vehicles, compared with 11,220 in the same period last year, an estimated year-on-year increase of 138%.
In fact, it is not only BYD in A-shares, but Weilai, Xiaopeng and Ideal are also called “three heroes of trams” in Chinese stocks. The stock price has also soared recently, and the market value has increased greatly. Tesla, which is also a new energy vehicle, has now firmly ranked the throne of the world’s largest car company by market value, reaching as high as 539.2 billion US dollars, while the second-ranked traditional car giant Toyota is only 222.4 billion US dollars. According to Tianyancha data, BYD has surpassed Daimler to become the world’s top five car companies by market value, and Weilai’s market value has also surpassed BMW.
Zhang Weixi (pseudonym), a senior tax accountant with more than 10 years of experience in stock trading, told the author that he really couldn’t understand it. “You tell me, in our era, we all drove fuel vehicles. We all recognize the old American car company GM, and now it’s hard to accept that new energy is suddenly hyped so high.”
Xiaohong also said that after seeing the successive declines of new energy vehicles in A shares and Chinese concept shares, he also felt a little panic: “There are always people in the stock bar arguing that the price is too high, so I don’t know what to do now. What happened.”
The price-earnings ratio is a method commonly used by investors to judge the stock price, that is, the ratio of the price per share of a certain stock to the earnings per share. It is generally believed that if a company’s stock’s price-earnings ratio is too high, the stock’s price is frothy and its value is overvalued. As of the morning of December 4, the price-earnings ratio of BYD’s A shares was 104, Tesla’s price-earnings ratio had reached 1012, and the price-earnings ratio of A-share Maotai was only 49.
“To be honest, such a high price-earnings ratio is really scary.” Xiaohong said.
So, is the current “hype” of new energy vehicles really a bubble?
Xiaopeng P7 (Image source: Visual China)
Secondary market primary
“I think the logic is completely different.”
Wang Chao (pseudonym), a practitioner in the private equity industry, told the author that it is now outdated to use the price-earnings ratio to judge whether a company’s stock price is reasonable. “This is the method many years ago. Now the whole market environment is different, and the points that investors value are different.”
For example, Wang Chao said that in any industry, the amount of funds that listed companies seek to raise is gradually increasing, and many of the stock prices after listing will exceed people’s estimates.
“The essence of a stock is an investor’s investment in a specific company, and the market value, in layman’s terms, is how much people think the company is worth. Many people sum up the reason for this wave of new energy vehicle stock prices skyrocketing as overdrafting future expectations. , although there is some plausibility, it is not correct.”
Since the second half of this year, favorable policies for new energy vehicles have been introduced. According to third-party statistics, in October this year alone, a total of 13 policies related to the automobile travel industry were issued in various regions. Among them, there are 4 items at the national level and 9 items at the local level, covering new energy vehicles, charging infrastructure, intelligent network connection, etc.
Not only domestically, but US President-elect Biden also supports the development of new energy vehicles. During the campaign, Biden pledged a $2 trillion infrastructure plan, including investing in 500,000 electric-vehicle charging stations, and proposed a trade-in cash subsidy for consumers who switch from gasoline-powered vehicles to electric ones.
The UK government is also considering a ban on the sale of internal combustion engine cars in 2035, five years earlier than the 2040 originally announced. Japan also has such a plan.
According to a Deloitte research report, China is expected to surpass the United States as the world’s largest auto market by 2025. The maintenance market capacity will continue to grow and is expected to reach 1.7 trillion yuan (about 260 billion US dollars) by 2025.
“So no matter how the short-term stock price fluctuates, when the world’s major economies have put forward relevant favorable policies, the development of the new energy vehicle industry will definitely be positive for a period of time in the future.” Wang Chao said.
Wang Chao also expressed the concept of “priority of the secondary market”. He believes that this may be an important reason for the recent surge in the stock price of new energy vehicles. “This is not a new concept, but it is becoming more and more common to use the method of the primary market to predict the growth space of the target in the secondary market, and investment judgments are becoming more and more advanced, which is much more exaggerated than in previous years. This is particularly evident in U.S.-listed tech stocks.”
In fact, the evaluation of the primary market is more flexible than the evaluation of the secondary market. Taking angel round investment as an example, one method that most investors value is that if the investor thinks the founder team is very good, they will invest. However, when this method reaches a later stage, the proportion may be reduced again.
Car owner Sun Zhe (pseudonym) told the author that even though he thinks that the experience of fuel vehicles is far superior to that of new energy vehicles, “However, I feel that this trend seems to be irreversible, and I am slowly accepting it. Our family is considering buying a car, maybe It’s time to buy new energy.”