At the end of March, the three independent giants of Geely Automobile, Great Wall Motor and BYD successively released their 2021 financial reports. To sum up, Geely Automobile has the highest sales volume and continues to win the annual sales of Chinese brand passenger cars. BYD Auto had the highest gross profit margin and declined net profit. Great Wall Motors is standing at a high level in both operating income and net profit.
Among them, Great Wall Motors released its 2021 financial report to its investors a big "reassurance pill", on March 30, Great Wall Motors ushered in a large increase in A shares and Hong Kong stocks. The good financial report data reveals that Great Wall Motors' development strategy has achieved initial results, but industry insiders believe that the crisis of Great Wall Motors has always followed. The automotive market is changing rapidly, can Great Wall Motors continue to lead the industry? This article will focus on the interpretation of Great Wall Motor's 2021 financial report and look at the crisis and opportunity behind the soaring profits of Great Wall Motors.
Speaking with data, Great Wall Motor's 2021 financial report highlights are analyzed
Official data show that in 2021, Great Wall Motor achieved operating income of 136.4 billion yuan, an increase of 32.04% year-on-year; net profit of 6.73 billion yuan, an increase of 25.41% year-on-year. For reference, Great Wall Motor sold 1.281 million new vehicles in 2021, an increase of 14.79% year-on-year, and its sales exceeded one million units for the sixth consecutive year.
In the weak environment of the automobile market, the sales performance of Great Wall Motors is one of the best in the industry, and at present, Great Wall Motors has Haval, Euler, Wei brand, tank, Great Wall pickup truck, salon brand, facing different market segments to fully blossom, building a solid "Great Wall Empire". However, specific to the sales performance of each brand, it can be seen that Great Wall Motors is also facing some problems.
In 2021, the best performer is the Euler brand, with cumulative sales of 135,000 vehicles, an increase of 140% year-on-year, with the accurate "car brand that loves women more" positioning in the new energy market has been a great success, and all models are very out of the circle. The independent tank brand, under the premise of owning only 300 tanks, achieved cumulative sales of 85,000 vehicles, which also confirmed the success of great wall in the luxury hardcore off-road market.
However, the Haval brand, which has accumulated sales of 770,000 vehicles, an increase of 2.6% year-on-year, and the Great Wall pickup truck, which has accumulated sales of 233,000 units and increased by 3.6% year-on-year, are not outstanding in the overall performance of the two in 2021. On the one hand, the shortage of chips and other components leads to untimely production, on the other hand, it is also related to the increasingly fierce competition in the industry. In addition, Weipai, a high-end luxury brand, will have cumulative sales of 58,000 vehicles in 2021. Since the divestiture of the tank brand, Wei's high-end road has yet to expand.
It is worth noting that Great Wall Motors' performance in overseas markets is quite good. According to the official data, Great Wall Motor's overseas operating income reached 16.16 billion yuan, accounting for 11.85% of the overall revenue. According to Brother Rumble, the Great Wall has launched Haval H6, Haval F7, Great Wall Gun and other models overseas, and has landed in Thailand, Saudi Arabia, South Africa and other markets.
Overall, Great Wall Motors has occupied a certain right to speak in domestic and foreign markets, helping it achieve revenue of 136.4 billion yuan, ranking the leading position of domestic independent car companies. However, Great Wall Motors also has sales shortcomings and needs to step up to break through the high-end market.
Crisis and opportunity coexist: bicycle revenue increases, but gross profit margin declines
For a car company, the higher the average price of a bicycle, which means that the higher the brand premium ability and the higher the profit, which is also the best evidence of product strength and brand influence.
In 2021, the average selling price of Great Wall Motors' bicycles was 106,000 yuan, an increase of 15.02% year-on-year. Compared with Geely Automobile, its overall average bicycle revenue including the Lynk & Co brand is 87672 yuan, which shows that Great Wall Motors is slightly ahead. However, the soaring BYD is even better, and in 2021, it will not only achieve a surge in sales, but also the average price of bicycles has exceeded 150,000 yuan, which is very eye-catching among many car companies.
Although BYD's auto revenue (112.489 billion yuan) is not as good as the Great Wall, it is also quite close, considering that BYD has sold 730,000 new cars in the past year, the average bicycle price of the two is significantly shortening the gap in revenue. Therefore, the Great Wall still has a lot of room for efforts in the new energy vehicle market and the luxury high-end market.
According to the strategic deployment of Great Wall Motors, it already has three major brands in the high-end market, Weipai, Tank and Salon, and BYD will also rely on the Denza brand and a new high-end new energy brand to fully enter the high-end market. In fact, the Great Wall, BYD and Geely are still exploring the road of high-end brand, and it is difficult to say that they are successful, and whoever can take the lead in breaking through may be able to grasp the future of the automotive industry. Interestingly, both the Great Wall and BYD have set their sights on luxury hardcore off-road vehicles, will this be a breakthrough for Chinese luxury brands? Expect to see.
In addition, Great Wall Motors is also facing the problem of declining gross profit margin. In 2013, Great Wall Motor's gross profit margin reached a peak of 28.61%, but in the past 2021, its gross profit margin fell to 16.16%. Officially, the decrease in gross margin was due to the report's recording of transportation costs in accordance with regulatory regulations.
Compared with BYD and Geely, the gross profit margin of the latter is 17.39% and 17.1% respectively, and Geely's gross profit margin is the only one of the three car companies to be improved, mainly due to the upgrade of the model structure. Brother Reel learned from the relevant information that in 2021, the proportion of Geely Automobile's models of more than 150,000 yuan will increase to 22%, which will greatly promote its revenue growth. If you compare Tesla, which has a gross profit margin of 30%, and Weilai and Ideal Automobile, which has exceeded 20% gross profit margin, then the gross profit margin of Great Wall Motors needs to be improved.
According to Great Wall Motor's 2025 strategy, by 2025, it will achieve annual sales of 4 million vehicles and operating income of more than 600 billion yuan, which is a difficult challenge. For today's measures, Great Wall Motors can only further increase R & D investment, starting from electrification, intelligence and high-end, to enhance product competitiveness and seize market advantages.
"The road is obstructed and long, and the line is coming.". For Great Wall Motors, the double harvest of operating income and net profit shows that the strategic deployment in the early stage is correct, and the performance of its brands is also relatively outstanding. However, the crisis revealed in the financial report can not be ignored, the average price of bicycles and the low gross profit margin, which means that the Great Wall still has room for improvement in terms of brand premium, and it is also necessary to strengthen the sales proportion of high-end models.
In addition, it is not difficult to find that the financial reports of Geely and BYD also have bright spots. In particular, BYD, as the leader in the domestic new energy vehicle market, is now standing on the outlet of electrification and enjoying industry dividends. The second quarter of 2022 is coming, which is the outbreak period of new cars throughout the year, and it is also the stage of the vigorous development of major car companies. What big moves will Great Wall, Geely and BYD release to lead the development of the industry? The excitement continues.