Abstract: Make up for the shortcomings may have a chance, and instead fall into the abyss (welcome to pay attention to the leverage game)
Written by | Zhang Yinyin & Editor| was pleased
The automotive industry is the field of Industry and Economics that leverage games has long liked and paid attention to, and I have written a lot about self-media in the past 6 years. Later, every week I set up a column "Leverage Car Viewing".
Recently, it is the earnings season again, and Lever Game has launched the corporate financial report dismantling as usual this year - the "Yearbook" column, which has successively paid attention to the pole friends and the companies that I am personally interested in.
Geely Automobile just released the 2021 performance announcement, today's article is a double eagle with one stone, both columns are counted.
Pole friends have a special desire to see the company's annual report, especially welcome to leave a message to tell me.
1. Revenue growth, profit decline, sales growth outperformed the market
First, Geely Automobile's 2021 performance report disclosed sales of 1.328 million units in 2021 and 1.3202 million units in 2020, an increase of 1% - the leverage game had been written when the sales were simply released.
What is the view of this growth rate?
According to data released by the China Association of Automobile Manufacturers (CAAM), China's auto sales resumed growth in 2021, ending three consecutive years of decline since 2018.
In 2021, mainland new vehicle sales increased by 3.8% y/y to 26.275 million units.
Passenger car (PV) sales increased 6.5% y/y to 21.482 million units.
According to the data disclosure of the Federation of Passenger Vehicles, the retail sales of passenger cars in the mainland in 2021 totaled 20.146 million units, an increase of 4.4% year-on-year, down 1.7 percentage points from the growth rate from January to November 2021.
Anyway, no matter which caliber of data, the leverage game is not much to say, rod friends should understand that Geely Automobile's sales growth rate is outperforming the market. Of course, the overall growth rate of the whole industry is not high, and the leverage game believes that Geely Automobile cannot be said to be bad.
By the way, Geely Automobile announced that this sales figure only completed 87% of the annual sales target of 1.53 million units, which is very honest.
Geely's 2022 sales target for 1.65 million units (including the sales target for Lynk & Co brands) is set by Geely's Board of Directors, which is about 24% higher than total sales in 2021.
Although sales have only increased slightly, because the price of bicycles has increased, the brand upgrade has been effective. In 2021, Geely Automobile's revenue reached 101.611 billion yuan, an increase of 10% over the previous year.
Breaking 100 billion yuan of sales is really not easy.
The performance announcement said that geely automobile's bicycle price increased by 8% in 2021.
After taking into account the sales of Lynk & Co brand cars of the 50% joint venture, the combined average selling price increased by 9%.
However, the results announcement bluntly said:
In 2021, the Group's financial performance was lower than originally expected by management, mainly due to the global chip supply shortage during the year.
The main reason was that profit fell by 22%, from nearly 5.6 billion yuan in 2020 to about 4.4 billion yuan.
Similarly, net profit attributable to it fell 12% to $4.8 billion from $5.5 billion in 2020.
Of course, Geely Automobile also said that the net profit attributable to shareholders after dividing the payment by shares was 6.06 billion yuan, an increase of 9.4%.
Diluted earnings per share decreased by 15%, from $0.56 to $0.48.
By the way, although the earning power has declined a little, the proposed dividend has increased by 5%, from 0.20 yuan to 0.21 yuan. This is a good company in China, but...
Chart source| Oriental Fortune (thanks)
As shown in the chart above, if we look at the average share price of Geely Automobile in the past year, this dividend yield seems to be low enough.
Not to mention the dividend that is expected to increase by 1 cent, even if it is doubled, it will not cost much money.
2, if you want the horse to run, you must give the horse more grass: the cost has increased
Revenue is growing well, but profits are declining, what are the reasons?
In the results announcement, Leveraged Games saw significant increases in distribution and sales expenses, administrative expenses, impairment losses on trade and other receivables, and payments in shares.
As shown in the figure below, administrative expenses have increased from more than 5.7 billion yuan in 2020 to more than 7.9 billion yuan in 2021.
Similarly, distribution and sales expenses also increased from more than 5 billion yuan to more than 6.3 billion yuan in 2021.
There are not many examples of other leverage games, and the above figure is very clear. So we can think that development pays money. Of course, it is obviously a pipe dream to have the horses run without feeding the horses.
Let's look at it next, at the end of 2021, Geely Automobile's inventory reached more than 5.5 billion yuan, and at the end of 2020, it was 3.7 billion yuan.
At the same time, trade and other receivables also increased from a small of $27.9 billion in 2020 to about $31.5 billion in the chart below.
These 2 fees can not be said to be much more, but the leverage game believes that this trend should not be overdeveloped.
By the way, Geely Automobile's current liabilities at the end of 2021 increased from a small 41.9 billion yuan in 2020 to more than 60.3 billion yuan. This increment is still a bit large.
In the chart below, trade and other payables rose from $41.5 billion in 2020 to about $57.4 billion.
Yes, the main thing is that the increase in trade and other payables is a bit too much, so to speak.
In addition, the leverage game noted a small detail, in 2021, Geely Auto's financial expenses were 265 million yuan, compared to 167 million yuan in 2020.
Financial revenue -545 million yuan, -375 million yuan in 2020. Taken together, net financial income in 2021 was -$280 million and -$208 million in 2020.
After talking about the above financial expenses, we look at the cost of staff, and it is obvious that the expenditure of this part has increased more.
In the chart below, the cost of employees in 2021 is as high as 7.7 billion yuan, and in 2020, it is more than 5.8 billion yuan.
It is normal for enterprises to develop and become bigger and stronger.
The performance announcement discloses that the number of employees in geely automobile's entire group as of the end of 2021 is 44,000, compared with 38,000 in the same period of 2020, which can be said to have increased significantly.
Of course, it is necessary to create benefits in the long run, otherwise it is meaningless. We'll see and talk about it in the future.
3. How does Geely make up for shortcomings?
In 2021, the total sales of new energy and electrified models (including hybrid, mild hybrid, plug-in hybrid, and pure electric) were 100,100 units, an increase of about 47% year-on-year, accounting for only 7.5% of Geely's total sales.
This growth rate and absolute volume do not seem to be too bad, but according to the latest data of the Association of Passenger Vehicles, in December 2021, the retail sales of new energy passenger cars reached 475,000 units, an increase of 128.8% year-on-year and 25.4% month-on-month. In 2021, the retail sales of new energy vehicles were 2.989 million units, an increase of 169.1% year-on-year.
Geely New Energy actually lost the market.
Of course, Geely is also actively working hard to make efforts to this layout. Previously, the leverage game said that the pattern of independent top 3 in 2022 may be a historic change. The change may be caused by the performance of new energy.
Car Wars in 2022, there are 2 opinions about Geely, the leverage game.
First, it has become more difficult for Gilly to defend the Iron Throne. In the past few years, the general pattern of Geely, Chang'an and the Great Wall has basically not changed, mainly the ups and downs between the 3 giants.
In 2022, will more challengers continue their momentum in 2021 and will they be able to reach the top 3?
For example, in 2021, BYD's sales of new energy vehicles have sprung up, and the growth rate of passenger car sales of the entire company is also very gratifying. The first two months of 2022 will continue to soar.
Not only that, SAIC Passenger Cars and Chery actually performed well.
This trend of BYD has a great challenge to the stability of the top 3 in 2022. Geely, Chang'an, the Great Wall, BYD, who can rank among the 3 champions in 2022, is very suspenseful.
Second, Geely has also ushered in an opportunity, can it be seized? The scenery that belongs to the new forces of car-making may come to a strong independent brand. In 2021, the new forces of car-making have really caught fire, and this trend is generally expected to continue until 2022.
The Ministry of Industry and Information Technology said that it will expand the consumption of new energy vehicles in 2022.
Chart source| Shanghai Securities (thanks)
Many industry institutions and studies have expressed that the sales of new energy vehicles are expected to reach more than 5 million in 2022.
This is the benefit of all car companies, the big factories are not idle, Geely has engaged in extreme krypton, etc., and wants to do a big job.
Changan has engaged in two new energy vehicle tracks of Changan New Energy and Avita Technology.
The low-end Euler of Great Wall New Energy has performed well, and new brands are also being nurtured.
GAC Aean does not say how successful it is, and the initial battle is at least not bad.
Huawei and Xiaokang are also further cooperating, as detailed in the leveraged game "There is not much time left for Huawei and Xiaokang" (December 29, 2021).
Can Geely kill it?
In the coming years, it will be almost impossible for mainland passenger cars to grow at a high rate, with an overall of 20 million units going up and down. In the context of the total dividend space is no longer there, and the new energy reshuffle, who can seize the historic change?
In 2021, some of the new forces of car manufacturing have been killed, and those who are still alive and can be seen basically enjoy the dividends of the rapid growth of the penetration rate of new energy vehicles.
In this trend, can Geely become a quality player? Making up for the shortcomings may give you a chance, and instead fall into the abyss.
All unsubscribed financial charts in this article are derived from geely automobile's 2021 results related announcements, which are hereby explained and acknowledged
Copyright & Disclaimer: This article is a leveraged game creation, unauthorized reproduction is prohibited! If you need to reprint, please obtain permission. In addition, when authorizing reprinting, please also indicate the source and author at the beginning of the article, thank you! The views of any article in the game of leverage are for learning and exchange, not investment advice. All investments made by users accordingly are responsible for themselves. If there are any omissions or errors in the article, you are welcome to criticize and correct them.