Zhejiang Leapao Technology Co., Ltd. (Hong Kong stock abbreviation “Leapao Auto”, 9863.HK), a new power company in car manufacturing, today released its first interim report after its listing.
Leapmotor’s revenue in the first half of 2022 was 5.082 billion, an increase of 479.4% from 877 million in the same period last year; gross profit margin increased from -52.1% in the six months ended June 30, 2021 to -26 in the same period of 2022 %.
In the first half of 2022, Leapmotor’s sales revenue from cars and parts was 5.078 billion yuan, an increase of 479.0% over the same period last year. The growth in automotive revenue was attributable to the increase in deliveries of Leapcar models. In the first half of 2022, the total deliveries of Leapcar models reached 51,994 units, a year-on-year increase of 265.3%.
As of June 30, 2022, a total of 33,058 T03s and 18,915 C11s were delivered. According to the latest data from Leapmotor, a total of 76,563 units were delivered from January to August 2022, of which 12,525 units were delivered in August, a year-on-year increase of over 180%.
In this regard, Leap Motor said that, on the one hand, due to the changes in the company’s product mix, the company’s operating efficiency is gradually improving with the expansion of the company’s economies of scale; The average selling price of the company has also been increasing, and the company has continued to strengthen cost control, and the company’s gross profit margin has been improved.
As of June 30, 2022, Leapmotor’s R&D team has expanded to 1,869 people. As a result, R&D expenditure also increased by 103.2% from 259 million yuan in the first half of 2021 to 526 million yuan in the same period of 2022. With the expansion of its R&D team, Leapmotor has launched new R&D projects in 2022 to develop new vehicle platforms, new models and smart electric vehicle technologies, including next-generation smart cockpits and ADAS platforms.
Net fundraising amounted to HK$6.057 billion
Just on September 29, Leap Motor landed on the Hong Kong Stock Exchange at an issue price of HK$48 per share, becoming the fourth new Chinese automaker to IPO in Hong Kong after Weilai Automobile, Xiaopeng Automobile and Lili Automobile.
The net amount of funds raised by Leaprun IPO reached HK$6.057 billion.
Since the introduction of Pre-A round of financing in January 2018, Leapmotor has been favored by many star investment institutions. First, Sequoia Capital invested 170 million yuan. Later, in the A round of financing, Shanghai Electric led the investment, and Sequoia Capital continued to follow.
In January 2021, Leapmotor completed the B round of financing and introduced SDIC Chuangyi, Zhejiang University Jiuzhi, Yonghua Capital, etc. The Hefei government investment platform also invested 200 million. Then, Hangzhou State-owned Assets also appeared in the C round of financing.
The cost of consideration per share of Leapmotor also rose from RMB 4.54 in the Pre-A1 round to RMB 12.26 in the A1 round. Just in the C round of financing completed in 2021, this figure became 27.26 yuan, an increase of 5 times compared to the original 4.54 yuan.
According to the valuation of the last round of financing before the IPO (22 billion yuan), the equity value of the 4.1% stake held by Sequoia through Sequoia Zhisheng and Sequoia Jiesheng exceeds 900 million yuan, second only to Dahua Technology and Guoshun. Institutional shareholders such as Leader, Guosen Securities, Green Leader, Shanghai Electric, Ningbo Hualing, etc.
In the list of Leap Motor shareholders, the names of Super Niu San Wang Xiaoan and private equity bigwig Ge Weidong are listed. Zhoushan Haohai holds 20.5669 million shares of Leap Motor Technology, accounting for 2.03%.
And behind Zhoushan Haohai is the 40 billion super bull king Xiaoan. Ge Weidong holds a 1.81% stake in Leapmotor, totaling more than 18 million shares.
Ge Weidong participated in the share subscription in the C2 round in November 2021, with an investment of 500 million yuan.
Before the listing in Hong Kong, Leapmotor has completed a total financing scale of more than 11.8 billion yuan.
Although there is still a big gap between the amount of financing and the “20 billion needed to build a car” as said by industry insiders, it is already rare among China‘s new car manufacturers.
Just a week before the listing, Leapmotor signed a comprehensive cooperation framework agreement with Bank of Beijing, and obtained credit support of no less than 5 billion yuan from Bank of Beijing.
Adhere to global self-research + vertical integration
Leapmotor takes global self-research + vertical integration as its strategy, and attaches great importance to the development of platformization and generalization. Since its establishment in 2015, Leapmotor has insisted on the platform development of systems and electronic components from the bottom, claiming that it is currently in different models. The common rate between them can reach up to 88%, and the generalization and platformization of the electronic and electrical architecture and the platformization of the whole vehicle architecture are realized between different models. Zhu Jiangming, chairman of Leap Motor, once revealed that “Leap Motor’s goal is to become a company of the size of Toyota and Volkswagen one day.”
Unlike other new car-making forces, which mainly focus on software self-research, Leapmotor has chosen software and hardware “with both hands” and insists on self-research of software and hardware. Including the vehicle, three major electricity (battery, motor, electronic control), three small electricity (electric air conditioning, electric steering and electric brake).
Considering that the automobile manufacturing industry chain is long, there are many parts and components, independent manufacturing and multi-level suppliers coexist at the same time, and the whole body is affected. Which link has a problem will affect the OEM to varying degrees. Leapmotor adopts a vertically integrated business model, which greatly simplifies the supply chain, thereby reducing procurement costs, achieving supply chain stability and strict quality control in the production process.
Thanks to the global self-research + vertical integration strategy, Leapmotor has been able to catch up from the back and achieve corner overtaking in the new car-making forces. According to the data, in July 2022, Leapmotor surpassed “Weixiaoli” for the first time with 12,044 deliveries, becoming the runner-up in the delivery of new vehicles that month. As of August 31, the cumulative sales volume of Leapmotor this year reached 765.63 million units, exceeding the delivery volume for the whole year of the previous year.
An important turning point came from the birth of Leapmotor’s first self-produced model, the Leapmotor T03. In July 2020, mass production of T03 rolled off the assembly line, and delivery started in September of the same year. Since then, the delivery volume of Leapmotor has increased rapidly. In August 2021, one year after the delivery of T03, the monthly delivery of Leapmotor has exceeded 7,000 units, and it has entered the leading camp of new car-making forces. Just recently, the first batch of Leapmotor T03 models were officially exported to Israel, taking the first step in the globalization process.
At the beginning of 2021, Leapmotor will pursue the victory, and then launch the mid-size SUV Leapmotor C11 to start the product upside. Driven by the two main products, the annual delivery of Leapmotor has jumped from 8,000 to 43,000.
Opening up the market is one aspect, and on the other hand, Leaprun’s sales structure is also improving simultaneously. With the delivery of the higher-end C11, entering into 2022, Leaprun C11 will continue to increase its volume. In July this year, the sales volume of C11 has increased to more than 50%.
On the eve of this launch, Leap Motor’s new flagship sedan, Leap Motor C01, was officially launched. A week before the launch, Leapmotor officially announced that the number of reservations for its Leapmotor C01 model has exceeded 100,000 units.
Industry insiders believe that the queuing and introduction of follow-up new products of Leaprun, especially the layout in the mid-to-high-end market, will bring more certainty to the company’s business growth.
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