Can JAC Motor be optimistic about its market value exceeding 100 billion yuan for the first time?

11/15 2024 537

In recent years, Huawei has become a key driving force in the Chinese market, and even in the automotive market, any company that cooperates with Huawei sees its share price soar. Recently, JAC Motor's market value exceeded 100 billion yuan for the first time. Can JAC Motor be optimistic about its future?

I. JAC Motor's market value exceeds 100 billion yuan for the first time

According to Jiemian News, JAC Motor's share price in the A-share market has continued to rise, hitting the daily limit at one point, with its total market value exceeding 100 billion yuan for the first time during the trading session, and the trading volume exceeding 4.9 billion yuan. In the past one and a half months, JAC Motor's share price has doubled.

On the news front, Zunjie Auto officially opened an official account on the Douyin platform and was certified as "Huawei Terminal Co., Ltd.", attracting 18,000 followers in just one day without publishing any content. Additionally, the Zunjie brand logo was also unveiled.

At the 2024 World Intelligent and Connected Vehicles Conference, Yu Chengdong revealed that the first vehicle of the Zunjie brand, a collaboration between Huawei and JAC Motor, will be unveiled at this year's Guangzhou Auto Show and will be launched in the spring of next year.

MAEXTRO Zunjie is the fourth smart selection vehicle brand created by Huawei in collaboration with an automotive company, following AITO Wenjie (in partnership with Thalys), LUXEED Zhijie (in partnership with Chery), and STELATO Xiangjie (in partnership with BAIC).

In May of this year, Yu Chengdong stated that the products in collaboration with JAC Motor will compete with luxury brands such as Maybach and Rolls-Royce Phantom, offering a more premium, luxurious, and comfortable driving experience.

The popularity of the Wenjie brand under HarmonyOS Intelligent Driving has fueled optimism in the capital market towards Zunjie. Coupled with the strongest "Golden September and Silver October" period for the entire automotive market this year, automotive stocks have recently performed well, with Thalys and BAIC Blue Valley both seeing their share prices increase by over 50% in the past one and a half months.

JAC Motor's recently released third-quarter report shows that in the first three quarters of 2024, the company achieved operating revenue of 32.206 billion yuan, a year-on-year decrease of 5.06%; net profit attributable to shareholders was 625 million yuan, a year-on-year increase of 239.86%, but the non-deductible net profit was -231.2 million yuan, showing a reduction in losses compared to the same period last year but failing to achieve profitability.

II. Can JAC Motor be optimistic about its future?

JAC Motor's market value has exceeded 100 billion yuan for the first time, a milestone achievement that not only marks a significant increase in the company's recognition in the capital market but also generates expectations for JAC Motor. How should we view this matter?

First, JAC Motor's market value exceeding 100 billion yuan for the first time is closely related to its soaring share price and collaboration with Huawei. In recent years, Huawei's layout and development in the automotive field have flourished. The Huawei automotive brand represented by Wenjie has achieved remarkable results in the market. With its strong technical expertise in communication technology, intelligent systems, and other areas, Huawei has injected new vitality into the automotive industry.

Huawei has unique advantages in automotive intelligence. Its research and development of intelligent driving systems, intelligent cockpits, and other technologies have greatly enhanced the user experience of automobiles. The success of Wenjie in the market is largely attributed to Huawei's technical support. The collaboration between JAC Motor and Huawei undoubtedly allows JAC Motor to ride on this high-speed train of development. Huawei's brand influence, technical strength, and marketing resources are expected to bring new development opportunities for JAC Motor.

Second, driven by Wenjie's success, Thalys' share price has soared. As an automotive company with deep collaboration with Huawei, Thalys' development trajectory can provide certain reference value for JAC Motor. After collaborating with Huawei, Thalys' brand awareness rapidly increased, and the competitiveness of its products in the market was significantly enhanced. This is mainly because Huawei provided it with support in technology upgrades, channel expansion, and other aspects.

For JAC Motor, having Huawei's support is like having a key to unlock a new stage of development. Huawei's technology can help JAC Motor optimize the power system of its vehicles, enhance their intelligence level, and thereby increase the added value of its products. At the same time, Huawei's resources in marketing and channels also help JAC Motor expand its market share.

Third, although the Huawei model appears to have a clear path to success, it is not easy to replicate in practice. Despite Huawei's current achievements in the automotive field, it still faces considerable pressure. Competition in the automotive industry is fiercely intense, with traditional automotive giants and emerging electric vehicle brands constantly vying for market share. For JAC Motor to stand out in this highly competitive market through the Huawei model, it needs to fully commit to collaborating with Huawei and fight alongside it.

Looking back at JAC Motor's previous collaboration with NIO, there are some concerns. Although JAC Motor has accumulated certain experience in its collaboration with NIO, there are fundamental differences between NIO and Huawei in terms of collaboration models and technical requirements. Collaborating with Huawei may require JAC Motor to make in-depth adjustments in multiple aspects such as production, research and development, and sales.

Fourth, for JAC Motor to achieve a true qualitative leap, breaking free from the constraints of the traditional model is crucial. In terms of technological innovation, JAC Motor cannot solely rely on Huawei's technology input but must also increase its own R&D investment. On the one hand, it needs to continue to delve into traditional automotive technology fields and improve the basic performance of vehicles, such as safety, reliability, and comfort. On the other hand, it should actively collaborate with technology companies like Huawei to achieve breakthroughs in cutting-edge areas such as intelligent driving and intelligent connectivity.

JAC Motor's market value exceeding 100 billion yuan for the first time is an important milestone in its development, but this does not mean that its future development will be smooth sailing. Collaboration with Huawei represents a significant opportunity for its development, potentially bringing improvements in technology, brand, and market aspects. However, for JAC Motor, whether it can truly devote itself to collaborating with Huawei and focus on product development may be the key to leveraging Huawei's strength to achieve a leap forward.

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