text: Original by Dongchedi Weiwei
[Original by Dongchedi Industry] 84 euros! At around 9:15 am local time on September 29, 2022, Porsche stock made its debut with an unexpected performance. Previously, Volkswagen Group offered a price of 82.5 euros for Porsche stock, which was the highest point within the expected range (76.50-82.50 euros). Unexpectedly, after its official listing, Porsche still gave the outside world a big surprise. This is also Germany's largest initial public offering (IPO) in 25 years. It is estimated that this listing will bring at least 19.5 billion euros (approximately 135.752 billion yuan) in revenue to Volkswagen Group .
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00 09:15 am local time on September 29, 2022, Porsche stock officially started trading
Before going public, the valuation of Porsche IPO was as high as 75 billion euros. This valuation enables Porsche to set the record for the third largest IPO in the European stock market and the largest German stock market as soon as it was listed.
ignores the "cold winter", Volkswagen insists on letting Porsche go on the market
Although Porsche still shows its huge brand appeal, many European analysts believe that going public may not be the best time at this time.
Is it a good time for Porsche to choose to go public at this time?
Energy crisis, inflation , parts supply shortage... At this stage, the European capital market is regarded as the worst year since 2009 . Many companies have postponed their listing plans, and the stocks of many listed car companies are also continuing to decline, such as Ferrari , Mercedes-Benz , etc.
Ferrari's stock price trend in the past month
Mercedes-Benz's stock price trend in the past month
Take the recent energy crisis as an example. The recent price of European natural gas has doubled several times compared with 2021, while aggravating inflation, which in turn puts unprecedented pressure on residents' lives and energy-intensive enterprises' production. How to overcome difficulties, especially solving problems such as heating and power production in winter, has become an urgent need for all Europe.
European automobile factories led by Volkswagen have to face the problem of possible supply of natural gas
Porsche's parent company Volkswagen Group recently warned that if natural gas is still in short supply after this winter, it is possible to transfer production bases from Germany. At present, Volkswagen's factories in Europe are mainly established in Germany, Czech and Slovak , but these countries are also the European countries that rely most on Russian natural gas.
. Another European automobile giant, Mercedes-Benz, has begun to accelerate the stockpiling of parts produced using natural gas. Once Germany implements a strict fuel rationing system, it can also ensure that subsequent production work will last for several weeks. In addition, BMW Group is stepping up preparations for possible energy shortages, with BMW operating 37 natural gas-powered power generation/thermal facilities at its factories in Germany and Austria.
In addition, the threat of natural gas supply cuts has also made the already tight supply problem worse...
In the context of the chill, Volkswagen still insists on letting Porsche go on the market. What is the main reason behind this?
Volkswagen needs to raise money for electrification transformation
The most realistic consideration is that Volkswagen raises funds to promote electrification transformation.
Since 2015, Volkswagen Group has begun a vigorous and unswerving electrification and digital transformation to . To this end, Volkswagen has launched the ID. series of models and has also independently introduced the digital department, which is just the beginning.
Volkswagen needs electrification transformation, electrification transformation requires money
Volkswagen's determination to transform to electrification is the largest among traditional fuel giants. The reason for Volkswagen to do so is very simple, that is, it is that it recognizes that the global automobile industry will transform to electrification. The proud Volkswagen will never allow itself to fall from the throne in the new era. Therefore, it is planned in advance and vigorously, all in electrification, and vows to continue the glory of its global automobile overlord to the new era.
But behind such a firm action, huge financial support is needed.According to Volkswagen Group's plan: it is necessary to develop the General Electric Vehicle platform SSP, establish 6 battery super factories in Europe, transform the original traditional fuel vehicle factory, achieve a 50% share of pure electric models by 2030, and fully realize carbon neutrality by 2050...
Volkswagen's ambitious electrification factory renovation/construction plan
In order to achieve the above goals, Volkswagen has prepared a special allocation of 73 billion euros, but this is only enough for the technology investment in the five years from 2021 to 2025.
Landlords will also have no surplus food. In the past few years, radical investment in electrification is far from bringing rich returns to the public. Every investment at present can be said to be burning money and burning money.
As the most profitable car brand under Volkswagen Group, Porsche has a profit margin of up to 16.5%, and has always been regarded as the group's profit "cow". If you have no idea about this 16.5% figure, let’s briefly compare: in 2021, the Volkswagen brand profit margin of 3.3%; the Skoda brand 6.1%; the Audi brand profit margin of 10.5%; the Bentley profit margin of 13.7%. That is to say, Porsche's profit margin is higher than that of Bentley, which costs three to four million.
Porsche is the "cow" of Volkswagen Group's profit
Let's go further to compare, and you will know how important Porsche is to Volkswagen. According to public statistics, Volkswagen Group's total sales in 2021 were 8.6 million vehicles, and Porsche's global delivery volume in 2021 was 302,000 vehicles. The latter's delivery volume only accounts for 3.5% of the group, but its profit share exceeds 26%. Porsche's sales profit reached 5.3 billion euros in 2021, while Volkswagen Group's pre-tax profit for the same period was 20.1 billion euros.
Volkswagen Group and Porsche CEO Oliver Blume
The new Volkswagen Group and Porsche CEO Oliver Blume said proudly in a telephone interview: "We have shown great resilience, especially during the crisis... Looking back on the epidemic crisis, the semiconductor crisis, and the Russian-Ukrainian conflict, we have been able to achieve very high profit margins, which is enough to say everything."
holds such a hot commodity in hand, and Volkswagen is of course going to sell it quickly to monetize it to raise more funds for electrification.
is written at the end:
is the cold winter and the overture of spring. I'm afraid we can only understand this way why Porsche chose to be launched at this time. After all, for all of Europe, the gas reserved can survive this winter, but if the situation does not turn around in the beginning of next spring, the situation will be even more serious.
If Porsche had not yet been launched at that time, it might mean that it had missed the best time to go public. Therefore, Volkswagen chose to let Porsche go public at this time. Although the valuation of stock is quite far from the market's highest expected 85 billion euros, it is probably the safest choice that Volkswagen Group and Porsche can make.
Porsche's boots have finally been put into use. How much confidence can its launch boost European market in the cold winter? Can Volkswagen's electrification path bring the expected benefits? We will also continue to pay attention to its performance after its launch.
