Header image source | Geely Auto Official
Gross margin recovered slightly.
On March 23, Geely Automobile released its 2021 financial report. According to the financial report, in 2021, the listed company achieved revenue of 101.6 billion yuan, an increase of 10.3% year-on-year; profit attributable to shareholders after deducting share payment was 6.06 billion yuan, an increase of 9.4% year-on-year; profit attributable to shareholders was 4.85 billion yuan, a decrease of 12.4% year-on-year; net profit was 4.35 billion yuan, down 22% from last year's net profit of 5.57 billion yuan.
For the decline in net profit, Geely Automobile explained that it was mainly due to the shortage of global chip supply during the year.
On the sales side, Geely Automobile also failed to achieve the set sales target for 2021. According to official data, Geely Automobile's sales target for 2021 is 1.53 million units, and the actual sales volume is 1.328 million units, with a completion rate of 86.8%.
But it's not all bad news. In the past year, Geely's new energy model sales accounted for a record high. According to the financial report, in 2021, the sales volume of Geely Automobile's new energy products exceeded 100,000 units, accounting for 7.5% of the overall sales volume. And Geely Automobile Group CEO Gan Jiayue said on the earnings conference call: In 2022, Geely will continue to make full efforts in pure electricity, super electric hybrid, alcohol-electric hybrid, power exchange and other tracks.
As a result, despite falling short of last year's sales forecast, Geely is confident in this year's market performance, setting a target of 1.65 million vehicles a year at the beginning of the year.
In the face of unfavorable factors such as subsidies declining, sharp increases in the price of battery raw materials, and still shortage of chips, how will Geely make moves in 2022?
Gross margin picked up
Judging from the financial report, Geely Automobile's "two blue Geely actions" have begun to show results. In 2021, Geely Automobile's total sales of new energy electrification models reached 100126, up 47% year-on-year. Since its delivery in October 2021, The Kr 001 has delivered a total of 12,453 units in four months, and Geometry Auto's Geometry A, Geometry EX3 and Geometry C have sold 29,000 units in 2021.
Extreme Kr adopts a direct sales model to sell products Source: Geely Automobile official
The sales performance of Geely's new energy sector is not inferior to that of Great Wall Motors and Changan Automobile. In 2021, according to the official data of Great Wall Motor, the cumulative sales of New Energy models of Great Wall Motor were 136,000 units; although Changan Automobile next door did not publish specific sales data, it also said on the investor relations platform that Changan New Energy's sales exceeded the 100,000 mark in 2021.
Regarding the improvement of the new energy sector, Geely Automobile said: The emphasis on self-developed science and technology has rapidly promoted the development of Geely Automobile's comprehensive intelligence and electrification. According to Geely Automobile's financial report, Geely Automobile's R&D investment in 2021 will total 5.5 billion yuan, an increase of 16.1% year-on-year; in the past five years, Geely Automobile's total R&D investment has totaled 25.6 billion yuan, and in 2022, Geely Automobile will continue to increase R&D investment in new energy products.
According to the financial report, from 2017 to 2020, Geely Automobile's revenue was 92.761 billion yuan, 106.6 billion yuan, 97.4 billion yuan and 92.1 billion yuan, respectively; the gross profit margin of automobile sales was 19.46%, 18.32%, 14.74% and 16% respectively. By 2021, Geely Automobile's gross profit margin will increase slightly, to 17.13%.
Source: Future Automotive Daily
Gan Jiayue explained in the conference call that the new energy business has improved, which has promoted the improvement of product structure and profitability, and thanks to this, Geely's gross profit margin has rebounded.
In fact, Geely Automobile's gross profit margin has declined before 2020, which is also one of the main concerns in the Inquiry Letter of the Shanghai Stock Exchange when it applies for listing on the Science and Technology Innovation Board. In this regard, Geely Automobile once explained in the reply letter that the decline in the gross profit margin of the main business was mainly affected by the fluctuations in the automobile sales business; the overall gross profit margin was due to the increase in the proportion of manufacturing expenses in the cost of automobile sales business year by year.
However, it is not easy to continue to maintain the gross profit margin, especially this year's new energy vehicle market environment is not optimistic, subsidies decline, raw material prices rise, chip shortages and other factors have led to pressure on the operation of most car companies.
In order to cope with the rise in raw materials, new energy vehicle companies such as BYD, Tesla, and Xiaopeng have raised product prices to balance manufacturing costs. On March 19, Ideal Auto CEO Li Xiang predicted on Weibo, "At present, brands that have signed contracts with battery manufacturers and determined the price increase of batteries in the second quarter have basically announced price increases immediately." If there is no price increase, most of them have not yet been negotiated, and the price will generally increase immediately after waiting for the negotiation. ”
Sure enough, it wasn't long before the ideal also compromised to the price increase. According to official sources, from April 1, the price of ideal car will be adjusted for ideal ONE, and the national unified retail price will be raised from the current 338,000 yuan to 349,800 yuan.
Ideal Auto released a price adjustment statement Source: Ideal official Weibo
The rising cost has also embarrassed Geely Automobile. On March 18, Geometry Auto adjusted the price of Geometry A Pro, Geometry C, geometry EX3 models, with an increase of 3000-7000 yuan.
How to play in 2022?
According to official sales data released by Geely Automobile, Geely Automobile sold 146,300 units in January and February, respectively, compared with 224,700 units in the first two months. If the target of 1.65 million units is to be completed, it means that geely will maintain a single-month sales level of 140,000 units in the remaining 10 months.
This requires Geely to maintain its existing competitive advantage.
From the perspective of sales structure, Geely's "China Star" series, Emgrand cars and Boyue family will sell more than 200,000 vehicles in 2021, and Geely Binyue will also hand over a report card of 150,000 vehicles in 2021. Sales of the four series account for half of Geely's total sales in 2021.
In order to maintain the existing advantages, in 2022, Geely's Boyue, Binyue, Binrui and other models will undergo a "big blood change" upgrade. The new generation of Boyue will usher in a replacement this year and upgrade to the CMA architecture; the new Binyue will adopt a new design and replace the 1.5T four-cylinder engine.
The field of new energy, especially the hybrid market segment, will be the focus of Geely's efforts.
Geely Automobile's 2021 financial report shows that in 2022, Geely plans to put more than 8 models of Thor Hi · X-oil hybrid and super hybrid products are launched on the market. Compared with the minimum fuel consumption of 3.8L/100km in BYD's DM-i hybrid technology, Ray's He· X-powered NEDC consumes slightly better fuel at 3.6L/100km.
Although Thor's Mind Ishi · X-powered has lower fuel consumption, but from the current pattern of the hybrid market, BYD DM-i models have covered multiple market segments, and in the face of preconceived BYD, how geely automobile can make up for the time difference in 2022 is a major challenge.
In 2021, Geely Automobile launched the Ray God Intelligence Engine Hi· X Hybrid System Source: Geely Auto Official
The pure electric field is also Geely's highlight in 2022. Extreme Kr, which has previously relied on Geely's "blood transfusion", has gradually begun to bear more pressure for Geely Automobile in the field of new energy. In Geely Automobile's earnings call, An Conghui, CEO of Extreme Kr, admitted that there is currently a lack of intelligence in software at Extreme Kr. In order to make up for the shortcomings, "At present, Extreme Kr is increasing capital investment in intelligence, and the proportion of software developers has increased from 35% last year to 65%, and software developers will increase to 70% at the end of this year, and the total number will increase." ”
According to the plan of Extreme Kr, Extreme Kr will launch an MPV model in the fourth quarter of this year. By the end of this year, the scale of Extreme Kr stores will exceed 300. With the dual approach of product and channel, it is expected to hit the sales target of 70,000 vehicles this year. In the next 3 years, Extreme Kr will launch 6 new products. By 2025, Extreme Kr will hit the annual sales target of 650,000 vehicles, ranking among the top three in the world in the high-end electric vehicle market.
In addition, Geely's new power exchange travel brand Ruilan Automobile also plans to launch a new flagship replacement SUV model this year, fully opening up the private user market. In the third quarter of this year, Geely will achieve mass production of the 7-nanometer vehicle-level intelligent cockpit multimedia chip "Dragon Eagle One", which will be the first to be installed on Geely's popular models.
Geely's many plans have given the capital market more confidence. Huaxi Securities released a research report saying that maintaining Geely Automobile's "buy" rating, it expects its revenue from 2021 to 2023 to be 1100.09, 1628.4 and 197.63 billion yuan, and the net profit attributable to the mother is 81.2, 134.2 and 18.15 billion yuan.
The author | Su Peng
Edit the | Li Huanhuan