This is not the best day for the capital market, but it still can not stop the overestimation of Porsche.

It has become a common practice for many automobile enterprises to separate high-quality assets and list them on the stock market independently to obtain high valuations.

At the end of August, Porsche, a German luxury sports car brand under Volkswagen Group, attracted investors' interest in its IPO, with a valuation of up to US $85 billion.

01. The market value of Porsche and its parent company Volkswagen Group is about the same

It is worth paying attention to the figure of US $85 billion, which is slightly lower than the valuation of US $100 billion at the end of last year. However, this shows that despite the adverse wind facing the market, the largest IPO in Europe's history will continue.

After the approval of the board of supervisors, Porsche plans to announce the plan of listing in Frankfurt in the first week of September, unless there is an unexpected shock in the market.

It is understood that the unexpected shock here mainly refers to the unpredictable emergencies caused by the conflict between Russia and Ukraine, and the depreciation of core assets caused by the US dollar interest rate increase. Another factor is that the current market for new energy vehicles is far from as high as the previous two years.

Since last year, Volkswagen Group has been trying to optimize some of its brands, including promoting the independent listing of Porsche, and the rumors of stripping Lamborghini, Bugatti and other brands have been heard more than once.

In February this year, the German Volkswagen Group and Porsche drafted a preliminary agreement on the independent listing of Porsche, hoping to release the value of this luxury car brand. At that time, it was considered that it might become one of the largest listing transactions in the world this year.

Last month, Oliver Blume, chief executive officer of Volkswagen Group, said that Porsche would be able to explain in more detail the contents of some of the listing structure agreements reached with Volkswagen Group in the next few weeks.

Oliver Blume said at the capital market day of Porsche: "we are working hard to reach an industrial cooperation agreement with Volkswagen Group. In the next few weeks, we can further release more details (IPO)."

Now, it seems that the independent listing of Porsche has been put on the agenda. If Porsche can be successfully listed, it will also be a record IPO of Volkswagen Group.

Last Friday, Volkswagen Group's preferred shares soared 4.4% in the Frankfurt trading market, the largest intraday increase in more than a month. As of Friday's closing, Volkswagen Group's stock price was 140.94 euros, and its current market value was 83.347 billion euros.

It can be said that after the IPO of Porsche at the current valuation level, the market value of this subsidiary will be equal to that of the parent company.

02. Why is Porsche so valuable?

The value of the brand seems to have unlimited potential.

We can see that Ferrari, which sells only more than 10000 cars a year, has also achieved amazing performance in the capital market.

In October 2015, Ferrari, an Italian luxury sports car, was successfully listed on the New York Stock Exchange (Stock Code: Race). The issue price was US $52 per share, which was at the upper limit of the pricing guidance range. The IPO Financing scale was US $893 million and the initial market value was US $9.8 billion.

In fiscal year 2021, Ferrari completed a year-on-year increase of 22.3% to 11155 vehicles, the highest ever; The annual sales volume was 4.27 billion euros, an increase of 23.4% over the previous year; The net profit was 833 million euros, which was 609 million euros in the same period of 2020.

As of the closing of the New York stock market today, the latest market value of Ferrari is close to $40 billion.

Let's look at the performance of Porsche.

Although the model is not as high-end as Ferrari, Porsche has found a balance between sales and profits.

Porsche previously announced that its sales volume in 2021 was 33.1 billion euros, an increase of 4.4 billion euros over 2020. Porsche's operating profit in 2021 increased by 27% compared with 2020 to € 5.3 billion.

Even at the current 1:1 conversion between Euro and US dollar, Porsche's revenue is eight times that of Ferrari and its profit is six times that of Ferrari.

So, no matter according to the price earnings ratio or the price to book ratio, the current valuation is only 2 times that of Ferrari, which is absolutely undervalued.

In addition, the annual sales volume of Porsche is 300000, which is nearly 30 times that of Ferrari. Although the profit of a bicycle is lower than that of Ferrari, it is still 3.7 times that of Mercedes Benz and 18 times that of Volkswagen.

According to the data, in 2021, the delivery volume of Porsche in all the markets for sale increased.

Among them, the delivery volume of the US market in 2021 increased by 22% year-on-year to 70025 vehicles, while the overall sales volume of the Americas was 84657 vehicles, an increase of 22%; The sales volume in the Chinese market increased by 8% year-on-year to 95671 vehicles, while the total delivery volume in Asia Pacific, Africa and the Middle East was 131098 vehicles.

In other words, nearly one-third of them were sold to China.

In 2021, the operating profit of the whole Volkswagen reached 19.275 billion euros, selling 8.88 million cars, while Porsche contributed 27% of the profit with 3.3% of the sales volume, becoming the most profitable brand of Volkswagen.

In addition, Porsche is also the most radical brand of Volkswagen brand electrification. Since its debut, taycan has been a highly popular electric vehicle. This year, many vehicles have been equipped with 800V technology, and taycan completed mass production two years ago. Up to now, it is the model with the highest warranty rate of second-hand electric vehicles in China.

It is worth mentioning that the sales volume of the Porsche pure electric sports car taycan has exceeded that of the Porsche 911 in Europe.

In addition, there is a more important factor for the high profit rate. Volkswagen Group shares technology and shares a large amount of R & D costs.

03. The model update is a little perfunctory, but it can stand the test

At the Chengdu auto show just now, the most speculative press conference was Porsche.

It just released all kinds of new color cars.

The eight exhibition vehicles at the scene all reproduce the classic colors of Porsche. These special paint decorations have been throughout the brand history of Porsche for more than 70 years and are one of the important symbols of Porsche. Today, these custom colors can be reborn through Porsche exclusive manufacturing.

As part of Porsche's deepening personalized service, the legendary paint color in Porsche history has now officially returned. Through the "personalized refined colors" service, the current Porsche models can also wear these classic colors.

According to the vehicle series and production location, there are many colors available.

For the 911 series and 718 series, more than 100 new paint colors are available. For Panamera, Macan and cayenne, there are more than 50 new optional colors, while for taycan customers, there are 65 new optional colors.

The service has been added to the Porsche car configuration system and can also be ordered through Porsche centres.

Yes, making money is that simple.

For a long time, it has been difficult for Porsche to have a relatively large update even if it is a major update, but every update will become a classic.

Horizontal opposition and PDK have become synonymous with stable high performance, and Porsche has also used quality to refresh what the first hedge rate should be.

This is the long-term quality precipitation and brand belief, which is priceless in the capital market, just like coca cola and apple.

In the future new energy planning, Porsche said at the Chengdu auto show that by 2030, the proportion of pure electric vehicles in the global new vehicle delivery is expected to reach more than 80%. It is not enough to rely on this car alone. In the future, like Macan's successor is an electric car, Porsche will electrify more car lines and models. Meanwhile, Porsche will build and expand its own charging service network.

Therefore, US $85 billion is the largest IPO in Europe. But Porsche is worth this price. Compared with the new forces with high valuation, its brand value, R & D capability and quality system are all gaps that new players cannot cross.