Grizzly Research, a short-selling agency, released a short-selling report on Tuesday (28th), accusing NIO of playing an “accounting game” to whitewash the financial report data.
NIO, one of China’s most valuable electric car companies, is playing an “accounting game” to prettify its earnings, inflating revenue and profitability figures, the Grizzlies released a short-selling report on Tuesday.
The Grizzlies put Weilai’s financial report doubts on Weilai’s BaaS battery rental service, and the secret of accusing Weilai of false accounts lies in Wuhan Weineng.
Companies such as Weilai, Industrial Fund and CATL established Wuhan Weineng Battery Assets Co., Ltd. in August 2020. Since then, since the fourth quarter of 2020, Weilai’s performance has greatly exceeded market average expectations, such as fiscal year 2021. Wall Street expects NIO to lose 6 billionRMBbut the final data is only 3 billion.
Grizzly pointed out that according to the business model, Wei Neng, as an entity that provides BaaS battery leasing services, provides subscription services to car owners after purchasing batteries from Wei Lai, and Wei Neng will contribute 290 million to Wei Lai in the fourth quarter of 2020.RMB‘s revenue will soar to 4.14 billion in 2021RMB。
Weilai has three main purposes in splitting the battery pack zero business into an independent company. First, the subscription fee of the user for the next few years will be included in the current financial report at one time, and then it can create a third party that is willing to over-purchase batteries, and the last point Yes, removing battery impairment charges from the balance sheet. Grizzly estimates that the first point will make NIO inflated by 1.147 billion yuan in revenue in the first three quarters of fiscal 2021.
Grizzlies also reviewed the history of NIO’s management’s past entrepreneurial failures, as well as its indirect connection with Luckin Coffee at the investor level. Grizzly said that Li Bin, chairman of Weilai, has a close relationship with Liu Erhai and the Joy Capital founded by him, and Joy Capital and Liu Erhai are the core figures in the Ruixing fraud case.
NIO ADR (NIO-US) shares fell 2.57% to $22.36 per share.