Since October of this year, the A-share auto stocks have been shining brightly in the market, with certain individual shares frequently hitting the daily limitA notable performer among them is the once-leading New Energy Vehicle (NEV) stock, BAIC Blue Valley New Energy Technology Co., Ltd(referred to as "BAIC Blue Valley", 600733.SH), which has also demonstrated impressive price movements.

As of the closing on October 17, the stock price of BAIC Blue Valley stood at 6.21 RMB per share, representing a remarkable increase of 18.06% since October 9. The company's total market capitalization is valued at 34.611 billion RMB.

However, this forceful price performance may be more influenced by the overall sales growth in the automotive sector and favorable factors such as the rise of Huawei’s automotive conceptsFrom a fundamental perspective, BAIC Blue Valley still shows a net loss in its financial baseline.

In recent days, there has been a significant uptick in BAIC Blue Valley's stock price, and since October 9, it has surged by 18.06%, catching the attention of the market.

A report from Wind indicated that from early October to October 16, the overall A-share automotive sector rose by 4.43%, the highest increase among 31 major industry categories in the Shenwan listing

Notably, BAIC Blue Valley's stock performance has outpaced that of the broader automotive market.

From the company's highlights, there has been a substantial uptick in car sales this yearOn October 10, BAIC Blue Valley released a production and sales report for September 2023, indicating that the company sold 8,325 vehicles in that month alone; for the period of January to September, its total sales reached 54,753 vehicles, signifying an impressive year-on-year growth of 90.81%.

The sales surge in BAIC Blue Valley mirrors the industry's overall growthAccording to data from the China Association of Automobile Manufacturers, in September, the production and sales figures for NEVs in China reached 879,000 and 904,000, respectively, reflecting year-on-year increases of 16.1% and 27.7%, resulting in a market share of 31.6%. Cumulatively, from January to September, the total sales of NEVs amounted to 6.278 million units, a 37.5% growth compared to the previous year, along with a market share of 29.8%.

Perhaps influenced by the overall growth in NEV sales, Wind reported that the electric vehicle concept sector saw an increase of 3.89% as of October 17 over the past week.

On the other hand, BAIC Blue Valley's recent announcements regarding contract orders and collaborations with foreign companies have also fostered a positive sentiment among investors.

On October 9, BAIC Blue Valley’s subsidiary, BAIC Blue Valley Arcfox Automobile Technology Co., Ltd

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(referred to as “Arcfox”), signed a cooperation agreement with UAE’s Bin Omeir Holding GroupThe two parties plan to jointly explore the UAE and Saudi markets, with Arcfox's brand of vehicles serving as key products for this venture.

Currently, Bin Omeir Group intends to procure Arcfox vehicle products to complete regional certifications, develop a regional emergency call system, and conduct adaptability validation for high-temperature environments, thereby laying the groundwork to formally introduce the company's productsThey have confirmed an initial order of 600 Arcfox vehicles.

Additionally, there have been recent conversations indicating that BAIC Blue Valley is also discussing production matters with Xiaomi AutomobilesReports suggest that cooperation discussions between Xiaomi and BAIC Blue Valley are advancing, with both parties seemingly interested in exploring deeper negotiations, though specifics remain undisclosed.

Furthermore, BAIC Blue Valley’s stock price rise may also be attributed to the influence of Huawei’s automotive concepts

Over recent years, BAIC Blue Valley has collaborated with Huawei, utilizing the "Huawei Inside" (abbreviated as HI model) to develop the Arcfox brand, becoming one of the first Chinese car manufacturers to enter the intelligent driving spaceUndeniably, BAIC Blue Valley is considered a player in the group of Huawei automotive stocks, which have been leading in market performance since October, where multiple stocks have seen shares soarIn the secondary market, Wind statistics show a 2.42% increase in Huawei's automotive concepts over the past week, while the Shanghai and Shenzhen 300 index witnessed a drop of 0.66% during the same period.

Notably, BAIC Blue Valley appears to be under restrictions on share reductionsAs per data from Wind, as of October 17, based on the most recent guidelines for share reduction behavior released by the Shanghai and Shenzhen Stock Exchanges, BAIC Blue Valley has not issued cash dividends in the past three years, and major shareholders or actual controllers are prohibited from selling shares in the secondary market.

Public records reveal that BAIC Blue Valley serves as the main platform for BAIC Group's efforts in the new energy vehicle landscape

The company's main operations and assets come primarily from its subsidiary, BAIC New Energy, focusing on NEVs.

Founded in 2009, BAIC New Energy underwent significant growth phases, listing in September 2018 through a reverse merger with Fengxing Group, entering the A-share market as the first NEV stock and renaming itself BAIC Blue Valley New Energy Technology Co., LtdBy 2022, BAIC Blue Valley reported total revenues of 9.514 billion RMB, of which revenue from vehicle sales accounted for 61.43%.

However, in recent years, BAIC Blue Valley's performance has not been particularly favorableFinancial figures indicate fluctuations in annual revenues from 2019 to 2022, with amounts of 23.589 billion RMB, 5.272 billion RMB, 8.697 billion RMB, and 9.514 billion RMB respectivelyDuring the same period, net profit attributable to shareholders showed stark losses of 0.92 billion RMB, -6.482 billion RMB, -5.244 billion RMB, and -5.465 billion RMB.

For the first half of 2023, the company reported revenue of 5.77 billion RMB, while net profit attributable to shareholders indicated a loss of 1.98 billion RMB

Over the timeframe between 2020 and the first half of 2023, BAIC Blue Valley's cumulative net loss has reached a staggering 19.1 billion RMB.

The transformation from being heralded as the "first NEV stock" to racking up nearly 20 billion RMB in losses has sparked considerable interest among investors regarding the timeline for BAIC Blue Valley to turn a profit.

It is worth noting that amidst ongoing losses, BAIC Blue Valley continues to engage in substantial fundraising effortsIn the first half of 2021, they raised 5.45 billion RMB through a private placementSubsequently, in the first half of 2023, they completed another round of fundraising, amassing 6.03 billion RMB, bringing the two-year total to over 11 billion RMB.

In reality, such financing measures merely alleviate short-term liquidity concernsIf BAIC Blue Valley aims for long-term viability, it must boost the market competitiveness of its products

Examining gross margins, BAIC Blue Valley had negative gross margins in its NEV business of -55.54%, -32.16%, and -18.08% over the period from 2020 to 2022. These figures serve as indicators of the overall competitiveness of their products in the market.

Currently, BAIC Blue Valley’s automotive portfolio consists primarily of two brands: Arcfox and BEIJINGNotably, Arcfox is the company’s main brand driving its transition toward high-end intelligence, yet it has faced challenges in sales performanceVarious sources have indicated that BAIC Group had set ambitious sales targets for Arcfox, aiming for 12,000 units in 2021, yet only achieving 4,993 unitsThe following year, Arcfox aimed for a target of 40,000 units but only realized 11,900 units, marking two consecutive years of disappointing sales performances.

In November 2022, the resignation of Arcfox CEO Wang Qiufeng was interpreted by the public as a reflection of the unsatisfactory sales performance.

Nevertheless, since the beginning of this year, Arcfox's sales have shown a positive trajectory

Data from Chezhujia indicates that from January to September 2023, Arcfox accumulated total sales of 15,056 units, up 53% compared to the same period last year when sales stood at 9,829 units.

Currently, BAIC Blue Valley has disclosed that Arcfox is actively refining its product range and is focusing on breaking new ground in the pure electric vehicle market priced between 150,000 RMB to 300,000 RMBIn the coming years, Arcfox is expected to employ a scenario-based approach to vehicle manufacturing, launching several new products that shift strategies from merely benchmarking competitors to creating products applicable to specific usage scenarios.

This year, BAIC Blue Valley has introduced the Arcfox Koala model, and by the end of 2023, plans to release the Arcfox N50 (SUV model), with the Arcfox N51 (sedan) set for 2024, alongside collaborative models curated with Huawei.

Among these, the Arcfox Koala is marketed as the "world’s first intelligent family vehicle," which has garnered significant pre-sale orders, with 5,206 units pre-ordered between its announcement at the Chengdu Motor Show on August 25 and its official release on September 20.

BAIC Blue Valley is also aggressively enhancing its sales channels