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our reporter qin xiao reports from beijing

what yinwang intelligence and other car companies are doing may not just be a simple reconstruction of the car's architecture, but also an attempt to reconstruct the entire automotive industry's ecosystem in the form of a "capital alliance."

with the investment of avita and seres, the mystery of shenzhen yinwang intelligent technology co., ltd. (hereinafter referred to as "yinwang intelligent") has gradually been unveiled. on august 19 and 23, huawei sold 10% of yinwang intelligent's equity to avita and seres respectively. based on this calculation, yinwang intelligent's valuation has reached 115 billion yuan, which is twice the latest valuation of its domestic competitor horizon (60 billion yuan) and 6 times that of momenta (20 billion yuan).

huawei told the china business news reporter that yinwang intelligence has integrated many core technologies of huawei's smart car business, and huawei will fully support yinwang's continued leadership and serve the intelligent transformation of the automotive industry. in the future, yinwang intelligence will continue to open up equity to strategic partners and work together to promote the rise of the automotive industry and the comprehensive development of intelligence.

asset appreciation rate 1916.16%

in november 2023, changan automobile and huawei signed a "memorandum of investment cooperation". huawei plans to set up a company engaged in the research and development, design, production, sales and services of automotive intelligent systems and component solutions. the goal is to become a leader in the automotive intelligent system and component solutions industry based in china, facing the world and serving the industry.

in january 2024, huawei invested 1 billion yuan to register yinwang intelligent, with the registered address being the office building of huawei headquarters. its main business is summarized as engaging in the research and development, design, production, sales and service of automotive intelligent systems and component solutions, including automotive intelligent driving solutions, automotive intelligent cockpits, intelligent vehicle control, intelligent vehicle cloud, and vehicle-mounted lighting. after its formal establishment, in march 2024, yinwang intelligent established five wholly-owned subsidiaries in shanghai, dongguan, suzhou, hangzhou, and nanjing.

public information shows that yinwang intelligence’s legal representative, executive director and manager is zheng liying, and the supervisor is song liuping, both of whom are senior executives of huawei.

although it has made frequent moves in financing since its establishment, to the outside world, yinwang intelligence has always remained on "paper". huawei's automotive bu has been slow to be fully integrated into yinwang intelligence, which also makes it impossible for people to truly understand this unicorn with a valuation of over 100 billion yuan.

until this time, seres (601127.sh) announced the acquisition of 10% of the equity of yinwang intelligent for 11.5 billion yuan, it used more than 30 announcements in one go to unveil the mystery of yinwang intelligent to the outside world, and also showed the outside world the progress of huawei's automotive bu in recent years.

the financial data of yinwang intelligence was disclosed for the first time in the "major asset acquisition report" (draft) released by seres this time.

according to the audited simulated report of yinwang intelligent's proposed loading business, from 2022 to the first half of 2024, yinwang intelligent's operating income was 2.098 billion yuan, 4.7 billion yuan and 10.435 billion yuan respectively, and the gross profit margin of its main business was 17.73%, 32.13% and 55.36% respectively. from 2022 to the first half of 2024, yinwang intelligent's net profit attributable to the parent company was -7.587 billion yuan, -5.597 billion yuan and 2.231 billion yuan respectively, and the estimated net profit attributable to the parent company for the whole year of 2024 is 3.351 billion yuan.

the financial data disclosed this time is also consistent with what richard yu, huawei's executive director, chairman of the terminal bg, and chairman of the intelligent automotive solutions bu, revealed earlier. richard yu had previously revealed that huawei smart car had turned losses into profits in the first quarter of this year.

the above report shows that the book value of net assets of yinwang intelligent on the valuation base date was 5.717 billion yuan, the net asset valuation was 19.851 billion yuan, and the valuation appreciation rate was 247.25%. based on the market method, the net asset valuation on the valuation base date was 115.256 billion yuan, the appreciation amount was 109.54 billion yuan, and the appreciation rate was 1916.16%.

among them, the most valuable are intangible assets such as patented technologies and non-patented technologies, trademarks, technology licenses and purchased software. the patents and trademarks included in the scope of this assessment include 6,420 patented technologies and non-patented technologies, 74 registered trademarks, 25 purchased software and 1 technology license. after evaluation, the above-mentioned intangible assets are valued at 13.827 billion yuan, with an assessed value-added of 13.702 billion yuan and a value-added rate of 11,471.97%.

it is worth noting that while giving a high multiple of appreciation rate, the report pointed out that in comparison with six similar a-share companies including thundersoft, desay sv, and lanqi technology, the average price-to-earnings ratio was 46.4. overseas, the price-to-earnings ratios of tesla and mobileye were 78.91 and 112.64 respectively, while that of yinwang intelligent was 34.39.

firewire

half a year after its establishment, yinwang intelligence has begun to "call friends".

on august 20, changan automobile and huawei held a signing ceremony for comprehensive strategic cooperation and avita's investment in yinwang. according to this transaction, avita technology invested 11.5 billion yuan to hold 10% of yinwang intelligent's equity; the remaining 90% of the equity is held by huawei. the 11.5 billion yuan cash investment comes entirely from avita's own funds and will be paid in three installments, with corresponding payment prerequisites.

it is reported that after receiving the first transfer price, huawei will start the specific activities of this loading and transfer the technology, assets, personnel, etc. within the scope of this loading to yinwang intelligence in an appropriate manner agreed upon in the relevant documents of this transaction. the above scope includes the ownership and personnel of the technology and assets held by huawei and its affiliates that are dedicated to the target company's loading business, and can meet the needs of yinwang intelligence to independently and continuously carry out the loading business.

just five days later, yinwang intelligent welcomed its second "friend". on august 25, seres disclosed that seres auto would purchase huawei's 10% stake in yinwang in cash for rmb 11.5 billion. on the same day, seres auto signed a conditional equity transfer agreement with huawei and yinwang.

although both parties offered the same 11.5 billion yuan, the contents of the agreement were different. it is worth noting that in terms of the board nomination rights, seres has the right to nominate one director and one audit committee member to the board of directors of yinwang intelligent after the transaction, while avita technology, which signed the agreement earlier, has the right to nominate one director.

zhu huarong, chairman of changan automobile and avita technology, said: "avita's investment in yinwang fully reflects changan automobile's strategic intention. as changan's most important brand strategy carrier, avita represents the company's high-end development direction. changan supports avita to become the first company to invest in yinwang in order to build it into the most vivid example of an 'open platform for joint participation of the automotive industry'."

zhang xinghai, chairman of seres group, also said: "seres's firm cross-border cooperation with huawei has continued to bear fruit. the wenjie series of products jointly created by the two parties have continuously broken industry records and are deeply loved by users and recognized by the market. this investment in yinwang company marks the upgrade of seres and huawei to a comprehensive cooperation of 'business + equity', opening a new starting point for the sustainable development of the cooperation between the two parties from 1 to n."

yu fenghui, a special researcher at china financial think tank, said that compared with simple business cooperation, equity cooperation means a deeper strategic bond and more consistent interests between the two parties. this model helps to enhance trust between partners, promote technology sharing and optimal resource allocation, and is conducive to jointly facing market competition and risks.

who's next?

according to the information, the board of directors of yinwang intelligent is composed of 7 members, and the seats on the board are determined according to the shareholding ratio of shareholders. currently, avita and seres each hold 1 board seat, and huawei still holds 5 seats.

according to the proportion of equity participation, will the remaining seats be chery, jac, and baic behind huawei's "three realms" besides wenjie? so far, brands using huawei's intelligent solutions include changan avita and baic arcfox. huawei's smart car brands include wenjie, zhijie, xiangjie, and zunjie, which were created in cooperation with seres, chery, baic, and jac respectively.

in addition, dongfeng motor and faw group may also participate in yinwang intelligent's investment. in march this year, you zheng, deputy general manager of dongfeng motor group co., ltd., said that they were actively promoting the investment in huawei's automotive bu with faw group.

huawei's rotating chairman xu zhijun has emphasized more than once that "yinwang intelligent will continue to open up equity to strategic partners" and that new shareholders will continue to enter in the future. previously, huawei had issued equity opening invitations to chery, baic, jac and other automakers, and faw group and dongfeng group, two central enterprises, had also sent signals to promote equity participation.

yu chengdong also said in november last year that in addition to avita and seres, huawei has issued equity opening invitations to chery, jac and baic, and hopes that china's more powerful car manufacturers will join the construction.

will chery (zhijie), baic (xiangjie), jac (zunjie) and even faw and dongfeng, which were previously rumored to be involved in the investment? the reporter contacted the above companies, but no response was received as of press time.

in the eyes of the outside world, huawei's goal is to become the "bosch" of china's smart electric vehicle era. bosch is making a comprehensive layout to accelerate the transformation to electrification. in the chinese market, bosch will maintain growth in 2023, with sales reaching 139 billion yuan (about 18.2 billion euros), a year-on-year increase of 5.2%. among them, the smart travel business has become the main growth engine, and its sales in china have increased by 8.2%, reaching 112.1 billion yuan (about 14.6 billion euros).

a research report previously released by ping an securities believes that after huawei's automotive bu operates independently, it is expected to become the "bosch" of the smart car era. when huawei's automotive bu business reaches a mature state, the revenue scale will be between 127.5 billion and 165 billion yuan. assuming a net profit margin of 15%, the corresponding annual net profit will be between 19.1 billion and 24.8 billion yuan.

however, an industry insider told reporters: "unlike bosch, few people cared whether the car used bosch parts when they bought it before. but now is the era of smart electric cars, and people buy cars sometimes just for the huawei brand. the more famous huawei is, the more confident it will be in the market."

in fact, huawei aims to build an "intelligent open platform for the automotive industry". unlike bosch's positioning as an "auto parts supplier", huawei has made it clear since entering the automotive industry that "huawei does not build cars, but helps car companies build good cars". huawei currently cooperates with car companies in three ways. the first is to only provide parts, such as motors and chips. for example, ideal mega is equipped with huawei's motors, some models of nezha s are equipped with huawei's mdc 610 chips, and feifan r7 is equipped with huawei's ar-hud. the second is the hi model such as avita and polar fox, which only provides solutions such as smart driving and smart cockpits. huawei's role is a supplier of both hardware and software. another is the smart car selection model such as wenjie and zhijie, which participates in the entire process from product definition to production process and even marketing, pricing, and after-sales.