After two consecutive days of sharp declines, Leap Motor’s stock price has nearly halved, and its market value has fallen to less than HK$30 billion

Image source: Visual China

On September 30, the second day of its listing, Leapmotor experienced a sharp drop again. As of the close, Leapmotor had fallen by more than 22% to HK$24.8 per share. Compared with the final offering price of Leap Motor IPO of HK$48, it has dropped by 48%, and the market value is less than HK$30 billion.

In fact, on the evening of September 28, Leaprun had already suffered a break in the dark market, and once fell nearly 20%. On the day of listing, Leapto’s stock price closed at HK$31.9 per share, down 33.5%.

Compared with “Wei Xiaoli”, the situation of Leaprun’s listing is even more bleak. When the U.S. stock market was listed, “Weixiaoli” closed with a certain increase on the first day. Ideal and Xiaopeng increased by more than 40%. In Hong Kong stocks, Weilai and Ideal only fell slightly at the close of the first day of listing, while Xiaopeng’s share price was flat with the issue price.

Following “Wei Xiaoli”, as the fourth new car-making force to be successfully listed, why did Leap Motor, which has just been listed, be greeted coldly by the capital market?

On September 29, when the stock price broke on the first day, Zhu Jiangming, chairman of Leapmotor Motors, once said: “It is indeed not a good time period, because the global situation is turbulent and it is in a downward channel. But we chose the main reason. It’s that we don’t care about the current time period, it’s a long run. What we care more about is the real quality and getting our market share as soon as possible.”

Regarding the sharp drop in the stock price of Leaprun for two consecutive days, Ernst & Young Bozhilong Strategic Consulting Partner Zhang Yichao told Jiemian News: “The market is still mainly concerned about profitability, Wei Xiaoli is having a difficult time now, and Leaprun’s price continues to fall. A field that is considered difficult to make money by the market. There are many reference targets in the market now, and the valuation will naturally be revised after listing.”

Zhang Xiang, a specially-appointed expert from the China Bolian Think Tank, also said: “Generally speaking, the decline in stock prices shows that most consumers are not optimistic about the zero run.”

In his opinion, including “Wei Xiaoli” is at a loss, and the development is slowing down; with the increase of players in the industry, the track is more crowded, even the top “Wei Xiaoli” sold about 100,000 vehicles last year. It is difficult to achieve economies of scale. At the same time, the capital volume of the Hong Kong market is relatively small, and automakers are relatively saturated.

An investor who has been concerned about new energy vehicles for a long time told Jiemian News that the decline in Leapmotor’s share price may be related to its gross profit margin and product strength. In his view, the price of the main model T03 of Leapmotor is around 100,000 yuan, which lacks imagination in the market. Everyone pays more attention to the enterprise’s intelligence, service network, technology and unique car and machine concept.

Leaprun has always emphasized its self-research capabilities to the outside world, but in fact, its investment in R&D is not high. According to the prospectus, its R&D investment from 2019 to 2021 will be 358 million yuan, 289 million yuan and 740 million yuan respectively. yuan, a total of less than 1.4 billion yuan.

Taking the R&D investment of “Weixiaoli” in the second quarter of this year as an example, Xiaopeng, the least invested, was 1.265 billion yuan, and Weilai, the most, reached 2.15 billion yuan. The three-year R&D investment of Leaprun is similar to the current single-quarter expenditure of “Weixiaoli”.

At the same time, from the perspective of financial data, Leaprun will continue to lose money in the near future.

According to the prospectus of Leap Motor, from 2019 to 2021, the adjusted net losses of Leap Motor were 809 million yuan, 935 million yuan and 2.628 billion yuan respectively. During this period, its gross profit margin was -95.7%, -50.6% and -44.03%, respectively. Although this data further narrowed to -26.6% in the first quarter of this year, there is still a long way to go before the gross profit margin turns positive.