Sales were not as good as expected, and Avita sent a new car.
On September 26, Avita 07, a smart urban SUV built by Avita Technology, was officially launched, after the model was successfully rolled off the production line at the Changan Digital Intelligence Factory.
According to Avita’s disclosure, the company delivered 36,400 vehicles in the first August of 2024. Previously, the company proposed to challenge the sales target of 100,000 vehicles again in 2024, but only 36.4% of the annual target was completed in the first August.
In terms of performance, in 2022, 2023 and the first half of 2024, Avita’s net profit was – 2.015 billion yuan, – 3.693 billion yuan and – 1.395 billion yuan respectively.
This also means that in the past two and a half years, Avita’s net profit has accumulated a loss of 7.103 billion yuan.
Not only that, as of the end of the first half of 2024, Avita’s total assets reached 12.746 billion yuan, net assets reached 706 million yuan, and the company’s debt ratio was as high as 94.46%.
The average monthly delivery is only about 4550 vehicles
On September 26, the Avita 07, a smart urban SUV built by Avita Technology, was officially launched after the model was successfully rolled off the production line at the Changan Digital Intelligence Factory. As a result, another member of the "Avita" family was added.
Avita Technology was founded in 2018. The company claims to be dedicated to exploring future-oriented humanized travel technologies and creating emotionally intelligent travel experiences for users.
In November 2021, Avita completed the first round of 2.42 billion yuan strategic financing, post-money valuation 788 million yuan, () participated in the shareholding of 28.99%, becoming the second largest shareholder.
In August 2022, Avita completed the 2.547 billion yuan A round of financing, () introduced China Merchants Group Capital, Weihao Chuangxin and other 6 war investment, after the financing is completed, Ningde era is still the second largest shareholder.
In August 2023, Avita received 3 billion yuan in B round financing, and investors included Changan Automobile, Southern Assets, etc. The post-money valuation was nearly 20 billion yuan.
After three rounds of financing, Avita’s total financing is close to 8 billion yuan.
In December 2022, CATL also signed a deepening strategic cooperation agreement with Arvita. The two sides will cooperate in lithium battery research and development, new material application and parts development for new energy vehicles, and build a battery supply system based on cutting-edge battery technology.
At the Guangzhou Auto Show on November 17, 2023, Avita made its debut on the same stage with its flagship models, Avita 11 and Avita 12, marking the official entry of Avita into the era of dual flagships.
It is reported that the new model will be equipped with Huawei’s high-end intelligent driving system HUAWEI ADS2.0.
Obviously, Avita has a high starting point. It was jointly built by Changan Automobile, Huawei, and Ningde Times. Zhu Huarong, chairperson of Changan Automobile, personally served as the chairperson of Avita.
According to the plan, Avita expects to achieve 100,000 sales targets in 2023. In fact, the company’s actual sales in 2023 are only 23,500, only 23.5% of the target.
Some industry insiders said that Avita takes the high-end route, and the price range is around 400,000 yuan, which is also one of the reasons for its "high and low".
2023 did not complete the plan, Avita 100,000 sales target extended to 2024.
According to the original plan of Changan Automobile, Avita Technology plans to complete the sales target of 90,000 vehicles in 2024.
The relevant person in charge of Avita revealed that after the compensation of the company’s management is linked to sales, the sales target in 2024 will be pressurized by an additional 10,000 vehicles. This means that Avita will once again challenge the sales target of 100,000 vehicles in 2024.
In March 2024, the 2024 Avita 12 was officially launched, and a total of four new models were launched.
Subsequently, Avita CEO Tan Benhong introduced that Avita 12 has a clear goal in the short term, and the average transaction price is expected to be about 350,000 yuan, and about 5,000 vehicles will be delivered per month.
Tan Benhong also publicly criticized some of his peers. He said that many new power companies are pursuing product variety, but ignoring product efficiency and investment efficiency. He pointed out that "we can see that the new power that has been doing it for a long time is only 10,000 or 15,000 vehicles per month, and seven or eight products (pure electric). I think the product efficiency and investment efficiency are worrying."
However, according to Avita’s disclosure, the company delivered 36,400 vehicles in the first August of 2024, only 36.4% of its annual target.
Apparently, the average monthly delivery of Avita is only about 4,550 vehicles.
Net worth 706 million
So, what about Avita’s product efficiency and investment efficiency?
According to the annual reports of Changan Automobile in 2022 and 2023, Avita’s operating income was 28.34 million yuan and 5.645 billion yuan respectively, and its net profit was 2.015 billion yuan and 3.693 billion yuan respectively.
In the 2024 semi-annual report, Changan Automobile introduced that Avita’s operating income reached 6.152 billion yuan and its net profit – 1.395 billion yuan.
This also means that in the past two and a half years, Avita’s net profit has accumulated a loss of 7.103 billion yuan.
Moreover, as of the end of the first half of 2024, Avita’s total assets reached 12.746 billion yuan, net assets reached 706 million yuan, and the company’s debt ratio was as high as 94.46%.
Chen Zhuo, president of Avita Technology, has announced that according to the requirements of the board of directors, Avita’s volume will increase three or four times this year, but the loss control must be consistent with the previous year, and strive to achieve break-even in the third and fourth quarters of 2025. This is the goal given by the board of directors.
In terms of IPOs, Chen Zhuo said that Avita will actively strive for them. "From Avita’s perspective, the IPO is to solve the problem of financing sources, but we also want to improve the governance structure of the entire enterprise through the IPO, through the listing of certain management requirements, to make it more compliant and more standardized. This is our primary purpose."
At the same time, Chen Zhuo revealed that the valuation of Avita is now less than 20 billion yuan, "This year we will also do C round financing, which is expected to be completed in the second half of this year, which is relatively certain, so the specific time of IPO is not limited, and it is flexible to consider according to market conditions according to sales."
However, at present, there is no new news on Avita’s Series C financing, but the company has indeed made major moves.
In August 2024, Changan Automobile announced that Avita, a joint venture of the company, planned to buy 10% of the shares held by Huawei, and the transaction amount was 11.50 billion yuan.
Changan Automobile said that the company will use this transaction as an opportunity to comprehensively strengthen its strategic cooperation with Huawei and help Changan Automobile transform into an intelligent low-carbon travel technology company.
In 2023, Avita’s annual revenue is 5.645 billion yuan, and the investment scale is more than twice its revenue that year.
Furthermore, in terms of total assets, Avita needs to bring in external capital to complete the deal.
Zhu Huarong, chairperson of Changan Automobile and chairperson of Avita Technology, said: "The next three years will be a critical period for Avita to build a’new luxury first brand ‘. As a milestone leap, Avita has become the first company to invest in Huawei. The industry-leading’HI’ model has further upgraded the new model of’HI Plus’. CHN’s optimal resources will empower Avita, so as to promote Avita to achieve leapfrog development and make every effort to build a new luxury Avita that participates in world competition."
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