IPO plan outflow “dim” polar star re shine?



&With sales lagging behind in China and slow development, polestar has returned to public opinion with an IPO rumor. On March 31, it was reported that Jixing planned to start the IPO process and plan to go to Hong Kong or the United States for listing. As an electric vehicle brand jointly built by Geely and Volvo, Jixing was born with its own aura. Although the sales volume in many places of Europe is higher than that of its rivals, the performance of Jixing is hardly optimistic in the Chinese market where the shareholders have high expectations. In this context, how much help can landing in the capital market bring to Jixing, and whether Jixing can tell a new story, are becoming the focus of attention of the outside world.

Going to the United States and Hong Kong

On March 31, it was reported that polar star was considering listing plans including special purpose acquisition company (SPAC), seeking to list in the United States or Hong Kong, China. For the news, the relevant person in charge of polar star China told the Beijing business daily, “no comment.”.

But no matter whether the news is true or not, it’s time for Jixing to prepare for itself.

According to the information, as a Swedish company, Jixing cooperated with Volvo car in the field of motor racing as early as 1996, becoming the “Royal Refitting Factory” of the latter. In 2015, Jixing was wholly acquired by Geely’s Volvo car, becoming a new and independent high-performance electric vehicle brand.

Zhang Xiang, an auto industry analyst, believes that the new energy vehicle sector in the current capital market is hot. Jixing is backed by Geely and Volvo, and focuses on the field of electric vehicles. Relying on this tuyere, it should be relatively easy for Jixing to go public. However, the current performance of Jixing is not ideal, and the valuation of listed companies may be affected at this time.

Is polar star more suitable for US stock market or Hong Kong stock market? At present, it seems that the new car making forces that have been listed in China are all listed in US stocks. Dong Xiang, a financial market expert, said that from the perspective of financing alone, Jixing is more suitable for listing in US stocks. The quantitative easing policy of the United States has made a lot of funds flow into the stock market. In the past year, the market value of a large number of US stock companies (especially technology companies) has generally risen.

Listing in Hong Kong is not impossible for Jixing, but it may conflict with the restructuring plan of the parent company. The parent company of Geely star is Volvo. Last year, Volvo announced that it was planning to restructure its business with Geely Automobile. The restructured assets will be included in Geely Automobile’s Hong Kong listed company. After the integration, the new group will maintain the independence of Volvo, Geely, link and Geely star brands.

Minority and mainstream

Whether listed in Hong Kong or the United States, Jixing needs to let investors see its development potential. As an emerging electric vehicle enterprise, Jixing initially chose to enter the extremely small one million yuan high-performance vehicle market. In October 2017, polestar 1, the first model of Polestar 1, is a high-performance electric drive hybrid GT sedan. It is limited to 500 cars per year with a sales price of 1.45 million yuan. It will be delivered at the end of 2019.

“It’s an effective product line confirmed by Tesla and other auto companies to establish the brand image first through high-end models, and then launch volume models to expand the market. However, polestar 1 has neither helped polar star gain sales nor increased the visibility of its brand. ” Economist song Qinghui said.

Zhang Xiang believes that the main reason why polestar 1 fails to improve its brand awareness lies in the insufficient marketing investment of polar star. Previously, in order to establish a high-performance brand image, Weilai invested heavily in the international electric formula competition; in order to improve the exposure rate, Weilai and Xiaopeng also invested heavily in large-scale activities such as auto show, while Jixing didn’t make many such moves.

In March 2019, before the delivery of Polestar 1, polar star launched polestar 2 for the mainstream market. The car is positioned as a luxury pure electric medium-sized car, which is compared with Tesla entry-level car model 3. The official guide price is 298000-418000 yuan, far lower than polestar 1.

Not only polestar 1 is difficult to be successful, but also polestar 2 is a bit embarrassed. In Song Qinghui’s view, the product line of Jixing is risky. Instead of continuing to lay out the high-end performance car market, polestar 2 chose to lower the price threshold and enter the mainstream car market below 300000 yuan. Since polestar 1 is not successful, after the launch of Polestar 2, in the future, it will be more difficult for polar star to go back and lay out a more high-end market.

Overseas and China

Since the second half of last year, the sales volume of Jixing in many places in Europe has exceeded that of its competitor model 3, but the development of the Chinese market is not ideal. In Zhang Xiang’s view, this is another important reason why Jixing is suitable for listing in US stocks.

In fact, Geely’s support for the development of polar star in the Chinese market is not small. Mass production of Jixing automobile is in the charge of Luqiao factory in Taizhou, Zhejiang Province, China, which is invested by Geely and operated by Volvo.

However, last year, Li Shufu, chairman of Geely Holding Group, also said in private that Jixing’s voice was too small, so he should learn more from Geely in marketing and communication.

After Li Shufu’s statement, there were several rounds of adjustments in the top personnel of polar star last year. On March 2, Jixing announced that Gao Hong, a marketing veteran from Volkswagen Group (China), will replace Wu Zhenhao as the president of Jixing China. In April, Che Yanhua, vice president of marketing of Volvo Greater China sales company, was transferred to Jixing to be responsible for its brand building and marketing in China, reporting directly to Gao Hong.

In spite of a series of support measures such as building local factories and attracting external talents, the development of Jixing in the Chinese market is still tepid. According to the data released by the passenger car market information joint conference, Tesla Model 3 sold 137400 vehicles in China last year, winning the first place in China’s new energy passenger car sales list. According to the data of China automobile center, last year, the total number of cars insured by polar star was only 365, ranking at the bottom of the list of luxury brands.

Zhang Xiang said that the competition in China’s new energy vehicle market is extremely fierce, and Jixing can not meet the demand of competition in terms of channels and marketing, resulting in poor sales. At present, experience stores are the key contact point for emerging electric brands to attract users, while the number of off-line experience stores of Jixing is too small and the coverage is limited. In addition, other new car building forces generally focus on building communities and spend a lot of money on offline activities to gather brand fans, while Jixing lacks efforts in this regard.

Beijing Business Daily reporter Liu Yang Pu Zhenyu

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