On December 26th, the new model of Siles' new energy vehicle, the Wenjie M9, was released, with Huawei Vice President Yu Chengdong attending the event. This SUV, touted as the best under ten million, was officially unveiled.
The vehicle features Huawei xPixel intelligent headlights with adaptive lighting and a 1.5-million-pixel projection function combination, Huawei Excellent Speakers, Huawei Immersive Head-Up Display System, Huawei Whale 800V high-voltage platform, and Huawei Tuling Intelligent Chassis. On the software side, it is equipped with the advanced Huawei autonomous driving system and HarmonyOS 4.0 cockpit, making it seem like a Huawei-branded car to the uninformed.
The M9 is available in pure electric and extended-range versions, with prices ranging from 468,000 to over 500,000 RMB. In the domestic new energy vehicle price range of 400,000 to 600,000 RMB, the main competitors are NIO ES8, Ideal L9, Mercedes-Benz EQE, Audi e-tron, and a few others. Specifically, the M9 is positioned against the domestic newcomers NIO ES8 and Ideal L9.
The newly released Wenjie M9 Max extended-range version is very similar in wheelbase and exterior dimensions to the Ideal L9 Pro, with both having a wheelbase of 3.1 meters and a length of 5.2 meters, and similar pricing.
The Wenjie M9 pure electric version Ultra targets NIO ES8, with a slightly larger wheelbase (3.1 meters) but an overall length of 5.23 meters, exceeding the ES8's 5.1 meters. Despite its larger size, the M9 uses a full aluminum alloy chassis, with 80% of the white body made of aluminum alloy, resulting in a total vehicle weight of only 3.01 tons, lighter than NIO's 3.19 tons. The two cars are also priced very close, both in the 550,000 to 560,000 RMB range.
Interestingly, during the launch event, a video of M9 testing was played, showing that even under impact from two heavy trucks, the A, B, C, and D pillars of the M9 did not deform, raising comparisons to a recent incident involving the Ideal L9 where all A and B pillars broke. Although the Ideal L9 was not explicitly mentioned, the implication was clear.
1、Product Upgrade and Release: Siles' Rebirth with Huawei's Support
Huawei's collaboration with Siles dates back to 2017 when Xiaokang Group (formerly Siles) saw a decline in sales of its traditional fuel vehicles. Zhang Xinghai, the chairman of Xiaokang Group at the time, sought to transition towards new energy vehicles. Over the next three years, Xiaokang Group invested over 6 billion RMB in new energy vehicles, with minimal success. The first electric vehicle, SF5, sold only 732 units in 2020.
In April 2021, Siles and Huawei collaborated for the first time, incorporating Huawei's three-in-one motor into the existing SF5 model. With the strong endorsement of the Huawei brand, SF5's sales exceeded 8,000 units that year, giving Zhang Xinghai hope. Capitalizing on the boom in the new energy vehicle market in 2021, Siles quickly modified the SF5, releasing the M5, and shortly after, the M7. Thus, Xiaokang Group repackaged its old SF5 into three new models: SF5, M5, and M7.
The strategy of converting traditional fuel vehicles to electric faced challenges due to insufficient technological accumulation, leading to quality defects. In November 2022, the Wenjie M7 faced criticism for potential deformation in the A-pillar during the China Insurance Research Institute's collision test, casting doubt on its safety.
Leveraging Huawei's widespread terminal stores, Wenjie automobiles gained rapid sales after their launch. However, the downsides of chaotic sales channels became apparent, with mobile phone sales staff lacking automotive sales expertise, unclear distribution of interests between sales and after-sales, and poor coordination between the direct sales team and franchisees.
The combination of product quality issues and chaotic sales channels quickly impacted sales. In October 2022, Siles reached a sales peak of 12,047 units, but afterward, sales declined. Despite the ongoing growth in the new energy vehicle market in 2023, Siles fell behind, with monthly sales hovering between 3,000 and 4,000 units, dropping below 3,000 units in April, representing less than 30% of the previous peak.
The declining sales also reflected in the financials, with Siles' operating income continuously halving for three consecutive quarters since the peak in the fourth quarter of the previous year. Quarterly net profit remained at a high loss, with an asset-liability ratio exceeding 80% and a current ratio below 100%.
Data Source: Wind
However, the situation began to reverse after the National Day holiday this year. The upgraded M7 was launched, and within two months, sales exceeded 90,000 units. According to the latest official data, the cumulative total of the new Wenjie M7 has exceeded 120,000 units. In November, AITO delivered 18,827 new vehicles in the Wenjie series, including 15,242 units of the new Wenjie M7.
In terms of production capacity, according to He Liyang, president of Siles Automobile, it is expected to deliver 23,000 new vehicles in December, and starting from 2024, monthly delivery capacity is expected to reach 30,000 units. With the hot sales and stable delivery of the new M7 and M9, the financial situation is expected to significantly improve in the fourth quarter and next year.
2、Short-term Overvaluation Triggers Correction, Long-term Prospects Remain Promising
After the release of the M9, Siles' stock price fell for two consecutive days, resulting in a market value drop of over a hundred billion RMB. However, the total market value still stands at 1100 billion RMB, with XPeng's market value just over 1000 billion RMB and NIO's market value at 1200 billion RMB, indicating relatively small differences among the three.
As of the end of November, NIO and XPeng had sales of 140,000 and 120,000 units, respectively, while Siles Automobile sold only 75,000 units, including non-Wenjie brands Blue Whale and SF5. The market had placed overly high expectations on the new models.
Recently, Huawei established an automotive component company in cooperation with Chang'an Automobile and others, injecting relevant technology, personnel, and assets into the joint venture. This has raised concerns in the market about the potential weakening of Huawei's support for Siles.
After several years of high growth in the new energy vehicle sector, competition in the car market is expected to intensify next year. The growth rate of new energy vehicle sales in 2020, 2021, 2022, and the first 11 months of this year was 16.47%, 168.79%, 88.14%, and 30%, respectively, showing a step-by-step decline. However, industry capacity expansion is still accelerating.
In the long term, the new energy vehicle industry remains vast, and Siles' products, supported by Huawei technology, are competitive. However, the excessively high valuation needs time to digest, and high sales expectations also require time for verification.
