Today at 5 am, NIO submitted its IPO prospectus to the US Securities and Exchange Commission (SEC) with a plan to raise up to 1.8 billion USD, under the stock code NIO. Here are some key points from the IPO:
Genuine User Enterprise
NIO’s founder, William Li, has made a remarkable move:
In a letter to investors, Li disclosed for the first time that, following careful consideration, he will transfer 50 million NIO shares (representing one third of his stake) into a special trust fund structure to produce economic returns for NIO’s customers. The users will discuss, propose and implement the use of these shares through reasonable mechanisms.
Li said that this decision embodies NIO’s original intention as a user enterprise and deepens NIO’s relationship with its customers. In the long run, NIO’s customers, shareholders, employees and cooperative partners will all benefit from this decision.
Basically, since NIO’s conference in December 2017, users’ feedback and investment in services have been highly regarded. One example is the overwhelming praise from NIO users, while traditional competitors and bystanders have been more sceptical.
Following Li’s decision to transfer his shares, the community surrounding NIO is expected to have even more intense discussions. In fact, as Li has emphasized many times, NIO does not need to please everyone but only focuses on its users.
Some Numbers
Regarding Shareholding: As indicated in the prospectus, after the last financing round, William Li held 17.2% of NIO’s shares, making him NIO’s largest shareholder; Tencent held 15.2%; Hillhouse Capital held 7.5%; and Li Xiang held 1.7%.
Regarding Profits and Losses: As of June 30, 2018, NIO’s revenue was 6.951 million USD (45.991 million RMB), of which the car sales revenue was 6.71 million USD (44.399 million RMB) and other income was 241,000 USD (1.592 million RMB), with a loss of 526 million USD (3.479 billion RMB).Regarding the first mass-produced car NIO ES8: As of July 30th, 2018, a total of 17,000 orders for ES8 have been received (remember that sentence: NIO does not need to please everyone, NIO focuses only on users.); 1,300 units have been produced and 481 units have been delivered.
Regarding product planning: After ES8, NIO will gradually launch a 5-seater mid-size SUV, ES6, a 5-seater compact SUV, ES3, Cross Coupe ET5, sedan ET3 and MPV EF9, at a rate of one new model per year. The second mass-produced SUV, ES6, will be released at the end of 2018, and deliveries will begin in the first half of 2019.
Regarding capital expenditure efficiency: As of March 31st, 2018, NIO has obtained 2,732 patents worldwide (including mainland China, Hong Kong, the European Union, the United States, etc.), and currently has three car models in the research and development stage.
In addition, NIO has acquired a high (difficult to quantify) brand asset.
The NIO market service system has also been initially established: Currently, 8 NIO centers and 53 service outlets have been set up nationwide. It is expected that 60-80 battery swapping stations and 400-500 mobile charging vehicles will be deployed by the end of 2018.
Regarding NIO, which is always in the vortex of controversy, everyone has different opinions. I just want to remind everyone: Whether you are a consumer, a media outlet or a friend in the industry, the rise of emerging forces should be given sufficient attention based on objective facts. Don’t let emotions interfere with your judgment. Don’t let NIO become the company that you “can’t see, can’t understand, can’t respect, and can’t catch up with”.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.