Reporter | Tao Zhixian
Edit | Chen Feiyi
1
JAC Automobile (600418. SH) latest annual report appears to be "excellent" on the surface, but in fact it is difficult to say "passing".
The company's revenue in 2021 was 40.2 billion yuan, down 6.11% year-on-year; net profit attributable to it was 200 million yuan, up 40% year-on-year. However, under a closer look, the company deducted non-net profit of 1.884 billion yuan, which has been deducted for five consecutive years since 2017, and 1.884 billion yuan is also the highest loss in history.
After Volkswagen obtained 50% of the shares of jianghuai automobile controlling shareholder, jianghuai automobile continued to rise and fall. Who would have thought that the company, which the market had high hopes for, would hand over an embarrassing report card.
Missing product competitiveness
Jianghuai Automobile's passenger cars include Sihao passenger cars (including SUVs and cars), Ruifeng MPVs, Sihao new energy electric passenger cars and other products, and commercial vehicles include light trucks, heavy trucks, multi-functional commercial vehicles, buses and other products.
In 2020, Jianghuai Automobile completed the mixed reform at the level of controlling shareholders, Volkswagen obtained 50% of the equity of Jiangqi Holdings through capital increase, and the State-owned Assets Supervision and Administration Commission of Anhui Province held 50% of the equity and still controlled Jiangqi Holdings. At the same time, Volkswagen China increased its capital in its joint venture, JAC Volkswagen (which has been renamed Volkswagen (Anhui) Co., Ltd. After the completion of the capital increase, Volkswagen China holds 75% of the equity of JAC Volkswagen, forming a holding, while JAC Automobile only holds 25% of the equity.
After the completion of the equity reform, Jianghuai Automobile's sales seem to have improved slightly. In 2021, the company sold a total of 524,200 vehicles, an increase of 15.63% year-on-year, of which 134,100 pure electric vehicles were sold, an increase of 169.12% year-on-year. However, in the first two months of this year, Jianghuai Automobile showed signs of decline. The company sold a total of 86,655 units, down 5.76% year-on-year, of which cars and MPVs fell by 49.21% and 36.11% year-on-year, respectively, and only SUVs increased by 39.15% year-on-year. It can be seen that the sharp increase in sales in 2021 is not unrelated to the base.
In addition to the short-term decline in sales, jianghuai automobile's delay in launching a representative large single product is more worrying to investors.
In terms of passenger cars, as the core platform built by Jianghuai Automobile under the "benchmarking Volkswagen and learning From Weilai", the first product of the MIS Haoxue platform, Sihao QX, performed unspeakably well. According to the data of the association, only 21688 sales of the product will be sold in 2021, which is outside the 30th place in the annual sales ranking of compact SUVs. In addition, the sales scale of Jiayue A5 sedan listed at the end of 2019 is also lower than the sales level of mainstream models of independent brands.
In terms of new energy vehicles, unlike the new car-making forces that have begun to take the high-end route, Jianghuai Automobile's new products are still taking the low-end route, and the core product Sihao E10X (mini car) is priced between 40,000 yuan and 80,000 yuan. Sihao's first product, the E20X (pure electric A0-class SUV, sales guidance price of 129,800 yuan), also had dismal sales after listing and has withdrawn from market competition.
The backward competitiveness of products directly leads to insufficient capacity utilization. Among the four main factories of Jianghuai Automobile, only the capacity utilization rate of light commercial vehicle factories has reached 90%, the capacity utilization rate of the other three major factories is less than 70%, and the capacity utilization rate of bus factories is even only 31.67%.
Image source: Company Annual Report, Interface News Research Department
Backward new energy products
There are no core products and low-end products, so that Jianghuai Automobile has not been optimistic about the market in the early stage of competition in the new energy market.
In 2021, the production and sales of new energy vehicles in mainland China will be 3.545 million units and 3.521 million units respectively, and the top ten new energy passenger car sales include Hongguang MINIEV, Tesla Model 3, Tesla Model Y, Qin Plus DM, Ideal ONE and other models. From the overall perspective of the industry, the new energy market presents two large and small dumbbell shapes in the middle, and the market sales of high-end models such as ideal and Tesla and economic star products such as Wuling Hongguang MINI are hot.
Traditional car companies either rely on the new energy vehicle outlet to continuously promote their own product positioning, or rely on the low-price strategy to beat the explosive route. Geely's Lynk & Co series, Extreme Kr and Great Wall's WEY have all gained a foothold in the market of about 100,000 yuan or even 200,000 yuan; Wuling Automobile has also gained a place with explosive products. In contrast, Jianghuai Automobile, the mid-end products have not been recognized by the market, and the bottom-end route has not received explosive models for a long time, which cannot form a scale effect.
In addition, the gradual narrowing of the policy dividend is also an important reason for Jianghuai Automobile's annual deduction of non-huge losses. Since 2017, with the implementation of subsidies for new energy vehicles, the industry has entered a liquidation period, the subsidy policy has maintained high subsidies for models with long endurance and high energy density battery systems, and the subsidies for low-end models have been greatly reduced, and the tail car companies and their supply chains have begun to clear, and the gross profit margin of Jianghuai Automobile, which has taken the low-end route, has also shown a downward trend. In 2021, the company's gross profit margin was only 8.16%, a record low. And BYD (002594. SZ) (Automotive business, H1 data), Great Wall Motor (601633. SH) (data for the first three quarters of 2021) gross profit margin of 19.53% and 16.58%, respectively.
In 2018 and 2020, the mainland has abolished the foreign ownership restrictions on special vehicles and new energy vehicles and the foreign ownership restrictions on commercial vehicles, and in 2022, it will also cancel the restrictions on the foreign ownership ratio of passenger cars and the restrictions on no more than 2 joint ventures, at which time foreign investment in automobiles will be fully opened, and the competition faced by joint ventures represented by Jianghuai Automobile will be more intense.
The total non-loss deducted in the five years was 6.5 billion yuan
Jianghuai Automobile, which has deducted non-net profit losses for five consecutive years, has lost a total of 6.551 billion yuan, and the company has received a total of 6.305 billion yuan in government subsidies in the same period. It can be said that if there is no non-recurring profit and loss such as government subsidies, Jianghuai Automobile may have already entered the stage of "delisting and sorting".
In order to save itself, Jianghuai Automobile has begun to sell assets. In 2021, the company's non-current asset disposal income was 436 million yuan, mainly due to the impact of land collection and storage.
Image credit: WIND, Interface News Research Department
In addition to the continuous losses leading to debt, Jianghuai Automobile is also caught in a vicious circle in which profits are swallowed up by interest. In 2021, the company's asset-liability ratio is as high as 65.78%, and the current ratio and quick ratio are 1.14 and 1.02 respectively, and the debt pressure is huge. At the same time, the company's financial expenses in 2021 were 226 million yuan, which is nearly 1.13 times the net profit.
In order to alleviate the debt pressure, in addition to the blood transfusion of government subsidies, major shareholders have also begun to transfuse blood. Jianghuai Automobile completed the fixed increase in December last year, raising 2 billion yuan to supplement current assets to reduce the company's debt scale, reduce financial expenses and reduce financial burdens. The company's controlling shareholder, Jiangqi Holdings, increased its shareholding ratio while transfusing blood, further enhancing the stability of its control (Jiangqi Holdings took all the shares of this fixed increase at a price of 6.88 yuan per share). After the completion of the fixed increase, the shareholding ratio of Jiangqi Automobile Holdings increased from 17.15% to 28.18%.
In addition to the blood transfusion increase of major shareholders, the second and third largest shareholders of Jianghuai Automobile are all reducing their holdings and leaving. On January 29, China Construction Investment completed a 0.76% reduction, and the shareholding ratio after the reduction dropped to 4.49%; on February 23, Anhui State Holding Group completed a 1% reduction, and the shareholding ratio after the reduction dropped to 4.33%.
As of noon on March 25, Jianghuai Automobile's stock price was reported at 11.3 yuan / share, which was close to the waist cut from the previous high. Even if there is a public stake and the lack of excellent products, it is not necessarily a good thing.