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馃敶 NIO gets Billions in Debt Financing. Here's how (I think) they will spend it. $NIO 钄氭潵鑲＄エ - YouTube
Channel: 馃嚚馃嚦 East West Investment Opportunities - D艑NGXii
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Hey guys today Nio secured
billions, before we start,
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make sure to hit that subscribe button
and gift a video like this really goes a
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long way. Thank you very much. Yes.
Neo just held a press conference.
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Announcing that six local banks were
put up a credit line of 1.4 billion us
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dollars here is why this
extremely bullish for NIO.
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NIO Has just completed an equity
deal with Hefei Anhui local
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government forming a
new entity near China.
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The investors will be investing
an aggregate of 7 billion RMB or
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1 billion us dollars.
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Now that entity NIO China
has successfully gotten 10.4
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billion UN or 1.5 billion us
dollars in credit today don't
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listen to the beers and a short
seller dare would tell you,
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taking on debt is something bad for NIO.
The truth couldn't be more far from it.
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My perspective is NIO is
entering an aggressive growth
mode and has just secured
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an additional war chest for it to
timing couldn't be any better NIO.
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Actually it is a legacy OEM that are
drowning in debt. Look at this chart.
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Do we hear anything about this
in the news or the media? No.
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All we hear is fear, uncertainty and
doubt, but NIO and Tesla. Whereas in fact,
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it is to old OEM that are billions in
debt with their current business model at
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risk, a really bad combination.
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Legacy OEM have been
laughing about EV players,
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such as NIO and Tesla burning
cash. For years in contrast,
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NIO and Tesla were smart enough
to go all in and invest this money
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into their technology, into their
brand and into region early adopter.
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In contrast legacy auto OEM's
plan was first to delay and then
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fund a transition to electric mobility.
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When the market is ripe by subsidizing
it through, selling an old technology,
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internal combustion engine cars,
then something unexpected happened.
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Tesla didn't go bankrupt. NIO did
not go bankrupt and "Roni" hit.
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The lockdown has hit legacy. OEM where
it hurt most with distribution centers.
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Shut down, they not able
to sell during a lockdown.
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And the cars are losing value overnight,
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worldwide government programs
to revive to economy.
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I excluding ICE (Internal Combustion
Engine) from funding schemes, car rentals,
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like Hertz went bankrupt. Flooding
the markets with cheaped used cars,
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eating into the new car sales who is
buying an ice car that is losing a resale
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value instantly. That is
not future-proof electric.
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That is not getting a nice government
discount and a car that needs to be
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serviced all the times
because it's burning fossil
fuels and a car that doesn't
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get better via software updates.
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After you purchased it to our two major
players that can deliver over the air
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software updates connected to
your wifi, making things possible,
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like improving self-driving
capabilities, improving range,
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increasing acceleration, adding new
games to your screen. You guessed it.
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It's Tesla and NIO now with the cash
lined up NIO can aggressively expand.
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My best guess what they are
doing with it? Hitting big auto,
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where it hurts the most:
car financing. For years,
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this has been the profit center of big
outdoor financial services have been the
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Cash Cow and profit pool for
OEMs. What many do not know?
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Most OEMs are not really making a lot
of money from actually manufacturing.
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The margins can be as low as 1%
instead they printed money by
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leasing the costs out. And
this is a big business at risk.
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It is a ticking time bomb. Look
at how many financial receivables,
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those companies have on their
balance sheet from leasing out. Now,
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NIO will come in and just do this for EVs,
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enabling customers to
lease a car in NIOs case,
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even leasing the batteries separately,
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NIO calls this battery
as a service or BaaS.
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It is a smart way to bring down the
initial purchase price of a car,
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buy the shell of a car, lease a battery,
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change and swap it as you like with
this NIO can undercut the price of
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competitors in the market and make the
offering more attractive. And believe me,
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Chinese companies really know what
it means to survive in a challenging,
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competitive environment. Besides all the
ways that NIO can spend this new money.
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There's other reasons why
this is extremely bullish.
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NIO was just on the verge of bankruptcy
and now they're suddenly securing a
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1.5 billion us dollar credit
line. Usually for startups,
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it is IMPOSSIBLE to get a credit line.
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It shows you how much trust there is
that NIO will survive as a business.
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And it shows the difference of NIO
compared to failing startups like BYTON.
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NIO has a CEO that is able to raise cash.
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This is an invaluable asset because it
may not be the last time that NIO needs
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to tap into the markets to
finance its growth. I must admit,
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I freaked out when Li Bin cancelled
the earning call last year,
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when he promised new
funding and it never came,
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but he proved the skeptics wrong.
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He put in millions of his own net worth
in a time when NIO almost went bankrupt,
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he raised convertible
bonds out of nowhere,
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possibly making his opponents
in fundraising crazy
because they were hoping to
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picking up NIO on the cheap. This
puts leap in on a level of Elon Musk,
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both are heavily invested
in their companies.
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Their personal wealth heavily depends
on how their company is doing and both
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managed to convince capital markets to
open their wallets for them in times of
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uncertainty. I know, I know it
sounds a little bit one sided,
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and I'm telling you this,
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despite the fact that our company's
actually doing China related projects with
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clients like Audi and
Daimler from time to time,
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it is my honest and straightforward
view that I'm sharing.
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Despite the fact that some of our clients
maybe even watching this. No offense,
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we still love you! But it's a story
that needs to be told. So Hey,
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drop us a line.
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If you want to do a project with us
before I retire early with my NIO stock.
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So with that enjoy the weekend,
give this video a like,
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subscribe to the channel,
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consider supporting us on Patreon.com
And stay tuned for more videos on
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NIO and other Chinese
stocks. Thank you very much.
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