Today, the Hainan Provincial People's Government issued a blockbuster document: the "Hainan Province Carbon Peak Implementation Plan." The plan clearly states that by 2025, 100% of new and replaced vehicles in public services and social operations will use clean energy.

Today, Hainan Provincial People's Government issued a blockbuster document: " Hainan Province Carbon Peak Implementation Plan ". The

plan clearly proposes that by 2025, the proportion of new and replaced vehicles in public services and social operations will use clean energy to reach 100%. By 2030, the sale of fuel vehicles will be completely banned on the island.

At the same time, the State Council executive meeting held recently decided to postpone the implementation of the new energy vehicle purchase tax exemption policy until the end of next year, and it is expected that an additional tax exemption of 100 billion yuan will be added.

It can be said that it is a double blessing. The new energy vehicle sector was also stimulated by the good news to surge throughout the day.

In addition, the Passenger Car Association recently announced that it will raise its sales forecast for this year by another 500,000 units to 6 million units.

Behind the popularity of new energy vehicles, the market competition landscape is also quietly changing.

The July sales data just released show that BYD surpasses Volkswagen, Tesla is halved, "Wei Xiaoli" is overtaken by second-tier new forces, and dark horse Cyrus is rising strongly.

once promised to sell 300,000 vehicles this year, why should Cyrus? Having been looked down upon many times, can Cyrus continue to be "slapped in the face" in the future?

A major change in the domestic new energy vehicle landscape

Stimulated by continuous favorable policies, the high prosperity of new energy vehicles is being continuously verified.

National passenger car market analysis for July 2022 released by the Passenger Car Association shows that although July is the traditional off-season for car sales, wholesale sales of new energy passenger cars still reached 564,000 units, a year-on-year increase of 123.7%. Although the month-on-month decrease was 1.1%, if the special factors of Tesla's production expansion are excluded, the number of new energy passenger vehicles in July still increased compared with June, and did not reflect the seasonal decline pattern that the auto market should have.

The Passenger Car Association stated that the overall progress of new energy vehicles this year has exceeded the forecast of 5.5 million units at the end of last year. Therefore, raised the original sales forecast by 500,000 units to 6 million units, and said that the forecast may still be raised at the beginning of the fourth quarter.

Compared with the overall popularity of the industry, competition among specific brands has become increasingly fierce, and the competitive landscape is also quietly changing.

BYD sold 162,200 new energy passenger vehicles in July, an increase of 29,700 units from June, continuing to top the sales list. Especially in terms of retail sales, BYD has surpassed the former overlords FAW-Volkswagen , including fuel vehicles, and reached the top of the Chinese passenger car market with new energy vehicles alone.

SAIC-GM-Wuling and Geely Automobile sold 59,300 units and 35,000 units respectively, ranking second and third in sales of new energy passenger vehicles.

Tesla sold only 30,000 vehicles in July, a sharp decline from 77,900 vehicles in June, and was squeezed into fourth place.

It is true that Tesla’s sharp decline in sales in July may be related to the upgrade of Tesla’s Shanghai factory. But Tesla’s former dominance in China’s new energy vehicle market has indeed been shaken.

Throughout 2021, Tesla achieved retail sales of 320,700 vehicles, accounting for approximately 10.73% of China's new energy passenger vehicle market. But in the first half of this year, although Tesla's retail sales were still as high as 197,600 vehicles, its share had dropped to 8.79%.

is even more obvious in the SUV segment. In 2021, the sales volume of Model Y is unparalleled, far ahead. But in the first half of this year, Model Y sales have been overtaken by BYD Song .

Behind the shake of Tesla’s dominance is the rapid rise of independent brands. Data from the Passenger Car Association shows that the wholesale penetration rate of new energy vehicle manufacturers was 226.4% in July, an increase of 9.8 percentage points from the penetration rate of 16.6% in July 2021. Among them, the penetration rate of independent brand new energy vehicles is as high as 45.9%, while the penetration rate of mainstream joint venture brand new energy vehicles is only 5.2%.

"Wei Xiaoli" has lost its advantage, and a dark horse has emerged. While

's independent brands are making rapid progress, the internal competition landscape has also undergone major changes in July. "Wei Xiaoli", a new front-line car-making force that has always been in the spotlight, was overtaken by second-tier new forces such as Nezha and Leappo in sales in July.

What is even more eye-catching is the rise of Thalys (formerly Xiaokang Shares).

not only created the single-month new energy sales record of Thalys (formerly Xiaokang Co., Ltd.), but also left the "Wei Xiaoli" behind.

It is worth mentioning that in January this year, Cyrus only sold 3,520 new energy vehicles, which was only a fraction of July. What made Thalys (formerly Xiaokang Co., Ltd.) turn around?

The answer is obvious, it is to rely on and Huawei . According to

data, 7,228 units of the Wenjie series of vehicles cooperated by Cyrus and Huawei were delivered in July.

Since its release in December last year, sales of Wenjie M5 have been steadily rising. In the first month after its release, Wenjie M5 only sold 815 units. But by March, sales of the Wenjie M5 had reached 3,045 units. In April, affected by the epidemic, the national auto market faced a cold winter. However, the sales of Wenjie M5 still bucked the trend and grew to 3,245 units, and for the first time it ranked among the top 10 sales of new energy SUVs. In May and June when the auto market recovered, Wenjie M5 continued its efforts and reached the 5,000 and 7,000 mark respectively.

The Wenjie M5 is selling like crazy, and Cyrus and Huawei are also striking while the iron is hot and launching the more high-end Wenjie M7. Just 4 hours after the car was released, the number of pre-orders exceeded 20,000. On the third day after its release, orders exceeded 50,000 units. Compared with the competing Lili L9, which sold 30,000 units in 72 hours after its release, the Wenjie M7 is no less impressive.

boasts annual sales of 300,000 vehicles. Why does Cyrus?

Huawei Smart Car Solution BU CEO Yu Chengdonghtml announced at the beginning of 2020 that the target sales volume of Wenjie M5 this year is 300,000 units.

Many people scoffed at this, thinking that "Yu Dazui" was bragging again. After all, "Wei Xiaoli" and other pioneers who created new forces have not yet passed the annual sales mark of 100,000 in 2021.

Judging from the actual sales data, Yu Chengdong is indeed bragging. As of the first half of this year, a total of 20,220 Wenjie M5 vehicles have been sold. To reach the target of 300,000 vehicles, an average of 93,000 vehicles need to be sold every month in the second half of the year. Unless each of the 200,000 Huawei employees buys one, it will be an almost impossible task.

However, behind the seemingly unrealistic goal, Cyrus is not completely without confidence.

At the press conference of the Wenjie M7, Yu Chengdong revealed that the Wenjie brand currently has a new Phoenix factory and a Liangjiang smart factory built with Industry 4.0 standards. The annual output of the two factories will reach 300,000 vehicles. This shows that, at least in terms of production capacity, Cyrus has made full preparations.

More importantly, Cyrus has been deeply bound to Huawei.

As we all know, Huawei has publicly stated that it will not build cars itself, but will help customers build and sell good cars. On this basis, Huawei's automotive business has developed three models:

1 and Tier1 model

. The Tier1 model is the simplest supplier model. Huawei supplies various hardware and software developed by Huawei to OEMs. At present, Huawei has launched more than 30 smart car parts, and products such as lidar , head-up display, and all-in-one powertrain have been gradually implemented in mass production.

2, HI mode (Huawei Inside mode)

HI mode provides Huawei’s full-stack smart car solution, including hardware and software. Car companies currently adopting Huawei's HI model include three OEMs: BAIC Jihu, Changan Avita and Guangzhou Automobile Group . Among them, the Extreme Fox Alpha S HI version was officially launched in May, and the Avita 11 was just officially released on August 8.

3, Smart Selection Mode

Compared with the HI mode, the cooperation model between Huawei and car companies goes further in the Smart Selection mode. Huawei will not only be deeply involved in product definition and vehicle design, but more importantly, Huawei will also provide sales channels.

Cyrus is currently the only partner of Huawei Smart Selection Mode. This also means that Cyrus has the deepest bond with Huawei. The benefits of

being deeply bound to Huawei are obvious:

First of all, Huawei's latest and best technology will be given priority to be first launched in Cyrus.

For example, the Cyrus SF 5 released in the first half of last year was the first model to be equipped with Huawei's DriveONE three-in-one electric drive system; the Wenjie M5 was the first model to be equipped with Huawei's Hongmeng OS smart cockpit.

Secondly, Cyrus can leverage Huawei's strong sales channels.The 2021 annual report of

shows that Huawei has established more than 5,500 experience stores around the world, most of which are located in bustling areas of city centers. Huawei plans to use 1,000 stores to sell cars by the end of 2022. Assuming that each store can sell 30 cars per month, monthly sales can reach 30,000 cars, and annual sales can reach 300,000 cars. This is how Yu Chengdong’s annual sales plan of 300,000 vehicles came about.

For comparison, Volkswagen (including FAW-Volkswagen, SAIC Volkswagen ) 4S stores only have about 2,000 in total, and BYD only has about 1,500, and most of them are far away from the city center.

According to the plan, Wenjie will have 1,000 experience centers and about 300 user centers this year, which is basically the same as BYD, which has been deeply involved in passenger cars for many years. For a car company like Cyrus, which does not have much experience in selling passenger cars, this number would be unimaginable without Huawei.

Finally, in the eyes of many loyal Huawei users, Wenjie is Huawei Auto, and Huawei Auto is Wenjie.

A blogger once conducted a field survey on Wenjie M5 and found that the customers who order Wenjie M5 cars are generally in the age range of 30-50 years old, and are generally engaged in careers related to technological innovation or the Internet.

This group is the main force in purchasing new energy vehicles in terms of available assets, consumption desires and consumption concepts.

More importantly, the characteristics of this user group are highly coincident with the user group of Huawei mobile phone . This also means that the number of Hongmeng users, which has exceeded 300 million, will become potential buyers of Cyrus cars.

In addition, the new super desktop function of Wenjie M7 allows Huawei mobile applications to be directly connected to Wenjie M7 car. With the continuous upgrading of the Hongmeng OS smart cockpit, different scenarios of Huawei's ecology such as cars, mobile phones, and smart homes will be further integrated. This will surely become a magic weapon to attract a large Hongmeng user group and help the sales growth of Cyrus Automobiles. .

holds Huawei’s thighs, can it have exclusive resources for a long time?

At the recent media briefing on the renaming of Xiaokang Shares to Thalys, Xiaokang founder Zhang Xinghai said with excitement that in the history of Xiaokang’s entrepreneurship, the company had used three names and had gone through three stages of development. But he was "looked down upon" three times. When

first entered the automobile industry, it was not favored by others; when it jointly built cars with and Dongfeng in 2003, it was still looked down upon; this time it was renamed Cyrus, it was still the same.

Although Cyrus has been in the limelight for a while after embracing Huawei's lap, the accompanying doubts have been rising one after another. The most questioned question is whether Cyrus will become a "foundry" for Huawei.

Such doubts are not unreasonable. In the cooperation between Xiaokang and Huawei, Huawei has absolute dominance from design to marketing, from smart cockpit to three-electric system.

Especially the three-electric system, which is second only to the battery in the importance of new energy vehicles, should be the strength of car companies. But in the cooperation between Huawei and Cyrus, Huawei's DriveOne three-in-one electric drive system is the real core, while Cyrus only provides a range extender.

Cyrus has strongly denied the question of "foundry". Thalys stated that both the intellectual property rights of the complete vehicle and the sales revenue of the Wenjie series belong to Thalys. Huawei only extracts corresponding sales and service fees from each car sold.

Obviously, such an explanation is weak, and the question of "foundry" will still hang over Thalys' head for a long time in the future. But in any case, the cooperation between Cyrus and Huawei has achieved great success.

, a once humble van manufacturer, has become a leading player in China's new energy passenger vehicle market.

Funds from all sources are also pouring in. Among the 7.13 billion private placement that has just been settled, 17 well-known domestic and foreign institutions participated in the subscription at a price of 51.98 yuan/share. Among them are securities firms and investment banks such as CITIC Securities and UBS, industrial capital companies such as Guoxuan Hi-Tech, and private equity tycoons Lin Yuan and Niu San Zhou Xueqin.

In the secondary market, Cyrus has become a 10-fold bull stock, with a market value of more than 100 billion. As a result, founder Zhang Xinghai's wealth has risen at a rocket speed, with his net worth soaring to 22 billion yuan, ranking 302nd on the list of China's richest people, an increase of 1,531 places from the previous year.

The biggest suspense now is whether Cyrus can turn the advantages provided by Huawei into a victory, and whether it can continue to "slap" those who look down on it.

can make a simple comparison between Sailis and "Wei Xiaoli".

In terms of sales, Wenjie only sold 202.2 million units in the first half of the year, which is still not comparable to Wei Xiaoli. However, it must be taken into account that Wenjie only started to exert its force in March, and it has already begun to approach "Wei Xiaoli" in June and July. At the same time, the Wenjie M7 was just released last month, and the Wenjie M5 pure electric version will be launched next month, and sales can be expected in the second half of the year. In terms of production capacity of

, has a production capacity of 300,000 vehicles according to data recently released by Yu Chengdong. Compared with "Wei Xiaoli", not only does it have no disadvantage, but it also has a slight advantage. In terms of

sales channels, Huawei-backed Thalys is simply a dimensionality reduction blow to "Wei Xiaoli". In terms of R&D investment in

, Sailis has much less investment than "Wei Xiaoli". This is largely because Cyrus's cooperation with Huawei is equivalent to outsourcing a lot of R&D to Huawei. These R&D expenses will eventually be reflected in Cyrus's sales expenses through the sales commissions collected by Huawei. In the first quarter of 2022, Cyrus' sales expenses reached 518 million yuan, a year-on-year increase of more than 200%.

In terms of net profit, Cyrus lost 839 million in the first quarter, which is not much compared to Weilai and Xiaopeng . However, considering that the sales of Wenjie M5 started in March, the loss may expand as sales increase. Facts have indeed confirmed this expectation. In the just-announced semi-annual report, Thalys' losses expanded to 1.727 billion.

In terms of debt ratio, Cyrus's asset-liability ratio is as high as 80%, which is much higher than the average level of "Wei Xiaoli" and car companies. It is an aspect worthy of vigilance. However, considering that NIO’s asset-liability ratio even exceeded 100% in the past few years, it seems that the temporary high debt ratio is not a big problem. However, looking at the financial reports of Cyrus over the past few years, we can find that before entering new energy vehicles, Cyrus's debt ratio has been at a high level for a long time, highlighting the company's weak long-term management capabilities. Next, we need to focus on the debt ratio. After appointing Huawei, can the company's operation and management capabilities be improved, thereby resolving the risk of an excessively high asset-liability ratio?

Finally, in terms of market value, the current market value of Cyrus is less than half of that of Ideal and NIO. Considering Huawei's support, this valuation is actually not high.

Generally speaking, with Huawei's support, the future sales prospects of Cyrus are worth looking forward to. With the support of various capital sources, the temporary high asset-liability ratio is not a big problem.

But there are still three aspects that need to be vigilant.

First, the management capabilities mentioned above. The high long-term asset-liability ratio of will cause great risks. Lifan , which is located in Chongqing together with Cyrus, is a lesson learned from the past.

The second is R&D capabilities. Although is deeply bound to Huawei, Cyrus still needs to have competitive technology that it can control. Unfortunately, according to Thalys' financial report, despite investing nearly 1 billion in research and development a year, all the intangible assets formed are non-patented technologies with zero patent rights.

The third is scarcity. mentioned earlier that Cyrus is currently the only smart choice partner of Huawei. It is this scarcity that makes the majority of Huawei's user groups regard Cyrus as Huawei's only "son". However, there is now news that Chery , JAC , and Jihu will also join Huawei Smart Selection. If there is no scarcity, there is a question mark as to how much recognition Huawei's user group will have for Cyrus.

In short, Cyrus's future is still promising, but whether it can become the backbone of China's new energy vehicles still has a long way to go. Can Cyrus bring us more surprises? Value Line will continue to track.

This article comes from value line