Dongfeng Group shares are the most profitable, and Beiqi Blue Valley has the most losses
Author | Zhen Yao
Edit | Lee Kwok-jeong
Produced by | Bangning Studio (gbngzs)
On the last day of March 2022, GAC Group submitted the best report card in the past three years: revenue in 2021 was 75.676 billion yuan, an increase of 19.82% year-on-year; net profit was 7.335 billion yuan, an increase of 22.95% year-on-year; and sales of 2.1444 million units, an increase of 4.92% year-on-year.
The harvesters are not limited to GAC Group.
As of the close of trading on March 31, Great Wall Motor, BYD, GUANGZHOU Automobile Group, Dongfeng Group Shares, Geely Automobile and other listed car companies announced their 2021 annual financial reports. According to the statistics of 9 car companies in Bangning Studio, 8 achieved profitability, and 7 achieved double growth in sales and net profit.
Elongate the timeline. In 2021, China's automobile production and sales were 26.082 million units and 26.275 million units, respectively, ending a three-year decline since 2018, with a slight increase of 3.4% and 3.8% year-on-year.
Among them, the new energy vehicle market showed explosive growth, with production and sales of 3.545 million units and 3.521 million units, respectively, an increase of about 1.6 times year-on-year, and the penetration rate climbed sharply by 8 percentage points to 13.4%, and the single-month penetration rate in December alone was as high as 19.1%.
2021 is a year of both challenges and difficulties. As Jianghuai Automobile wrote in its financial report, the automobile market lacks core and less electricity, technology companies compete for cross-border, the market competition pattern is further intensified, and the company faces multiple challenges and pressures.
Great Wall Motors said in the financial report that the automobile market has changed from incremental to stock era, market competition has become more and more fierce, the era of lying win is over, the knockout race has been opened, the room for corporate fault tolerance has been greatly reduced, and a little carelessness may lead to a cliff-like decline.
Beiqi Blue Valley believes that the significant increase in the penetration rate of new energy vehicles in China not only brings opportunities for the development of enterprises, but also attracts many cross-sector companies and capital to enter the market, resulting in increasingly fierce market competition.
However, the increasingly accelerated iteration of technology has further shortened the production cycle and life cycle of new energy vehicle products, and brought certain challenges to the design, production and manufacturing capabilities.
"The covid-19 epidemic continues, the shortage of automotive chips, and the rise in raw materials for bulk commodities have had a great impact on the automotive industry." Zhu Yanfeng, chairman of Dongfeng Company, said.
In the context of the lack of core, repeated epidemics, and rising raw material prices, what opportunities and risks will these 9 listed car companies face in 2021, and how should they break through in 2022?
01.
LED by BYD
The revenue of 5 car companies exceeded 100 billion yuan
2021 is the year of the outbreak of new energy vehicles. In the case of a favorable market, BYD, as the top of China's new energy vehicle sales for 9 consecutive years, ranked first in the revenue of 9 car companies with an operating income of 212.642 billion yuan, an increase of 38% year-on-year.
The operating income of baic motor, great wall motor, dongfeng group shares and geely automobile has exceeded 100 billion yuan. Beiqi Blue Valley's operating income did not exceed 10 billion yuan, but the growth rate was the fastest, reaching 64.95%.
Statistics from the China Association of Automobile Manufacturers show that in 2021, China's auto retail sales reached 4.4 trillion yuan, an increase of 7.6% year-on-year. BYD, Great Wall Motor, Geely Automobile, GAC Group and Beiqi Blue Valley all exceeded the industry average.
Behind the revenue growth, it is inseparable from the continuous increase in delivery volume.
In 2021, the sales volume of Dongfeng Group and GUANGZHOUC Group will exceed 2 million units, Great Wall Motor, Geely Automobile and BAIC Motor will exceed 1 million units, and BYD and Jianghuai Automobile will exceed 500,000 units respectively.
In terms of growth rate, BYD saw the largest increase, with BAIC and Dongfeng Group falling.
BYD's new vehicle sales reached 730,000 units, up 75.4% year-on-year. Among them, the sales volume of new energy vehicles was 593,700 units, an increase of 231.6% year-on-year, and sales accounted for more than 80%. Sales of all-electric models and DM hybrid models were 320,000 units and 270,000 units, respectively, up 44.9% and 467.6% year-on-year, respectively.
While sales have been rushing all the way, the gross profit margin of BYD's auto-related business has fallen by 7.81% to 17.39% year-on-year. Although this figure is slightly better than Great Wall Motors' 16.1% and Geely Automobile's 17.1%, it is significantly different from Tesla's about 30%, and the new car-making force Weilai and Ideal 20%.
02.
Dongfeng Group shares are the most profitable
Beiqi Blue Valley lost the most
In terms of net profit, BYD has the highest operating income, but it is not the most profitable enterprise. With 11.387 billion yuan, Dongfeng Group's shares increased by 5.85% year-on-year, becoming the most profitable car company among the 9 car companies.
GAC Group and Great Wall Motors subsequently had net profits of 7.335 billion yuan and 6.726 billion yuan, respectively. Through data comparison, it can be found that 8 of the 9 listed car companies are profitable, and only 1 of Beiqi Blue Valley has a loss, and its loss amount exceeds 5 billion yuan.
In this regard, Beiqi Blue Valley said that mainly affected by the new crown epidemic and the shortage of raw material supply, production and sales did not meet expectations, and the existing gross profit could not cover the inherent costs, and the impact on the performance was about 2 billion to 2.5 billion yuan. At the same time, continuous marketing and R&D investment also affected performance.
From the perspective of growth rate, 7 of the 9 car companies have positive net profit growth, and BYD and Geely Automobile have declined, down 28.8% and 21.9% respectively.
As far as BYD is concerned, the situation of increasing revenue without increasing profit has always existed. In 2017, BYD's operating income was 102.651 billion yuan and net profit was 4.066 billion yuan, and after 5 years, its operating income doubled to more than 200 billion yuan, but the net profit remained unchanged, even reducing by 1 billion yuan compared with 2017.
BYD said that the decline in net profit in 2021 mainly stems from two aspects: on the one hand, with the effective control of the epidemic, BYD's epidemic prevention product business has shrunk rapidly; on the other hand, due to the soaring prices of raw materials, BYD has encountered unprecedented cost pressure.
Also increasing revenue and not increasing profits is Geely Automobile. Stretching the K-line chart, it can be found that Geely Automobile's net profit has fallen sharply for three consecutive years, from 12.553 billion yuan in 2018 to 4.847 billion yuan last year, shrinking by nearly 7.7 billion yuan.
"Profit pressures are coming from rising raw material costs, increased R&D investment, and operating costs from developing new businesses." Geely Auto explained.
For BAIC, Dongfeng Group and GUANGZHOU AUTOMOBILE Group, which have both independent brands and joint venture brands, although the revenue and profit in 2021 have shown outstanding results, for a long time, the pattern of over-reliance on joint venture brands and commercial vehicle business has not changed, and the independent passenger car business needs to be strengthened.
To this end, Beijing Benz is still the largest source of income and profit of BAIC Shares.
In 2021, the revenue related to BAIC and Beijing Benz reached 167.97 billion yuan, and the revenue related to Beijing Benz accounted for 95.5% of the total revenue of BAIC.
On March 25, Guotai Junan released a research report showing that although BAIC's performance in 2021 outperformed the market, it continued to maintain a conservative attitude towards it. The reason for this is that "the improvement in BAIC's 2021 performance is mainly driven by non-operating income and some cost reductions, which may not be sustainable."
Guotai Junan explained that Beijing Benz, the main growth driver of BAIC, is losing its growth momentum and will continue to outperform the market from January to February 2022.
Dragged down by chip shortages and aging models, Beijing Benz sales have performed poorly, and the addition of the EQ series has not yet provided growth momentum. As BMW Brilliance and FAW Audi are adding some strong models, their future growth is challenging.
03.
Two key words
New energy and intelligence
In the past year, with the accelerated evolution of the world's century-old changes and the century-long changes in automobiles, under the background of superimposing the double carbon target, China's new energy vehicles have ushered in the wind outlet and achieved explosive growth. At the same time, it has also entered a new stage of market-oriented development, and the transformation of China's automobile industry has pressed the acceleration button.
In 2021, new energy and intelligence have become keywords repeatedly mentioned in the financial reports of many car companies.
"Great Wall Motors' definition of green carbon neutrality is not the pressure of passive standards, but the driving force of active transformation; not to seek small survival in the cracks, but to seek great development in new opportunities." To this end, Great Wall Motors will unswervingly accelerate the intelligent transformation, focus on intelligent driving, intelligent cockpit, intelligent services, establish full-stack self-research capabilities, and realize the integration of three wisdoms.
Zeng Qinghong said at the media communication meeting that in the past year, GAC Group has continued to build a whole industry chain ecosystem, strengthening the research and development of key core technologies around the field of intelligent networking and new energy, promoting scientific and technological self-reliance and self-improvement, and achieving new breakthroughs in many scientific and technological fields.
In 2021, BYD ushered in the 1 millionth new energy vehicle off the production line. BYD said that it will adhere to the common development of plug-in hybrid and pure electric, and the strategic determination and technical strength of "two legs and walking in unison".
The Extreme Krypton brand, established in 2021, is Geely Automobile's effort to enter the high-end intelligent electric vehicle market. Since its delivery in October, The Extreme Kr 001 has delivered a total of 12,453 vehicles in four months, with an average order price of 335,000 yuan, making it one of the fastest new forces.
In the field of intelligence that must be contested by soldiers, Geely Automobile, Great Wall Motors, BYD, GAC Group and many other car companies have seized the forward-looking technology highland.
Geely Automobile released the intelligent Geely 2025 strategy to create a "Raytheon Power" intelligent power solution; invested in Yijiatong, and released China's first 7nm process vehicle specification SOC chip developed by its subsidiary Core Engine Technology.
In the view of Gan Jiayue, CEO of Geely Automobile Group, the company has made a comprehensive layout in three areas: software resources, hardware resources and technical data resources. This series of measures will promote Geely Automobile's accelerated transformation into the intelligent era, build a full-stack self-developed ecosystem in the core technology field, and become a technology-led global automotive enterprise.
Great Wall Motors, which aims at global intelligent technology companies, will invest 4.49 billion yuan in research and development in 2021, an increase of 46.36% year-on-year. Its three major car-making platforms of lemon, tank and coffee intelligence cover the value innovation technology system of automobile research and development, design, production and the whole industry chain of automobile life, representing the new car-making concept of Great Wall Motors.
"At present, GAC Group is accelerating its transformation into a science and technology enterprise, aiming at new energy, intelligent networking and other fields, continuing to exert efforts in scientific research and innovation, and striving to build a new development pattern." Feng Xingya, general manager of GAC Group, concluded. In 2021, GAC Group invested more than 5.2 billion yuan in R&D, with 2,580 new patent applications and a cumulative total of 10,620 patent applications.
AEP3.0 new electric vehicle platform, Guangzhou Automobile Cloud Integrated Centralized Computing Electronic and Electrical Architecture Xingling Architecture, ADiGo (Intelligent Driving Interconnection) ecosystem, etc. are the results of research and development.
"As early as 2020, the watershed of new energy vehicles has emerged, and with the entry of new car-making forces and world-class automobile companies, new energy vehicles have entered a new era of competition." Wei Jianjun, chairman of Great Wall Motor, once said that the automotive industry is not only a competition for new energy vehicles, but also a big competition for intelligent applications of automobiles, which is an unprecedented opportunity.
"Only by seizing market opportunities, quickly amplifying advantages, and achieving breakthroughs in brand value and market share can we lead the new track of new energy and intelligence." Wei Jianjun said.
04.
The core is still lacking, and the price is still rising
How to break through in 2022
Now, auto companies are looking to 2022 and beyond.
In 2022, Geely Aims to sell 1.65 million vehicles. Ganjiayue said that 2022 is a big year for products, Geely will launch 5 Raytheon super hybrid models, 3 Raytheon oil-electric hybrid models, 1 alcohol-electric hybrid model, the new luxury intelligent pure electric MPV of the Extreme Kr brand, two new Geely brand new SUVs and 1 geometric new pure electric SUV.
This product matrix means that Geely Automobile is accelerating the transformation and upgrading of new energy, and is making efforts on a variety of new energy tracks such as pure electricity, super mixing, hybridization, and power exchange.
Also launching multiple products is Great Wall Motors. Great Wall Motors will launch 8 products such as Haval Cool Dog, Wei Brand Dream, Euler Ballet Cat, Lightning Cat, Punk Cat, Tank 700, King Kong Cannon, Salon Mecha Dragon, etc., including new energy, SUVs, coupes and other multi-type product matrix.
BYD, which includes automobile business, mobile phone components and assembly business, rechargeable battery and photovoltaic business, and actively expands the urban rail transit business, seems to be busier in 2022. At present, BYD's cumulative undelivered orders have reached 400,000 units, and they are still increasing month by month. Accordingly, it is conservatively expected to sell 1.5 million vehicles in 2022; if the supply chain is good, it will hit the target of 2 million vehicles.
Dongfeng will focus on its autonomous passenger car business. In 2022, Dongfeng's sales target increased by 25% year-on-year. Among them, commercial vehicle sales increased by 10% and passenger car sales increased by 28% (up about 600,000 units).
In terms of passenger cars, Dongfeng will launch more than 13 new products, including 5 independent brands, including Lantu Dreamer, Fengshen Haoji and other models. 8 joint venture brands, including Dongfeng Nissan ARIA, Dongfeng Honda e· Models such as the NS1, the new generation CRV and the DPCA D78.
Dongfeng has increased its investment in the field of autonomous passenger cars. According to its 14th Five-Year Plan, by 2025, Dongfeng commercial vehicles, autonomous passenger cars and new energy vehicles will sell 1 million units each. The scale of Dongfeng's own brand passenger cars has entered the top three in the industry. In terms of R&D investment, Dongfeng Company increased to 100 billion yuan during the 14th Five-Year Plan period, of which the R&D investment intensity of its own brands was not less than 6%.
In 2022, the trend of electrification is becoming more and more obvious.
GAC's "Shuangtian" investment in new energy vehicles has increased significantly. Guangqi Honda unveiled its new electric brand, the Polar Pan (English name e:NP), the brand's first model, the Polar Pan 1.
Gac Toyota's pure electric SUV model, the bZ4X, debuted in November 2021 and will be released in 2022. The model is based on Toyota's new e-TNGA electric vehicle platform.
But for these auto companies, it is not easy to achieve the set goals. On the one hand, since the beginning of this year, the new crown epidemic has been repeated, and there is uncertainty in the global macroeconomic trend; on the other hand, the automotive industry is still facing difficulties such as rising raw material prices and chip shortages.
As Great Wall Motor said in its financial report, auto companies may face the following three risks:
First, in the post-epidemic era, international political and economic risks still exist, and the foundation for sustained domestic economic recovery still needs to be consolidated.
Second, the impact of chip supply problems on enterprise production is still prominent, and the sharp rise in raw material prices has further increased the cost pressure of enterprises.
Third, the scientific and technological revolution represented by 5G, AI, cloud computing, big data, communication equipment and other technologies has begun, and the deep integration of automobiles and technology requires traditional enterprises to accelerate change and transform to a clean and intelligent direction.
Beiqi Blue Valley said in the financial report that the new energy automobile industry continues to develop at a high speed and sales are growing rapidly, but the industry's high-quality core resources are limited, and the shortage of core resources such as chips is aggravated, which may have an impact on the ability to obtain core resources, thereby restricting sales.
On the other hand, the continuous high investment of products and the rise in the price of core components will test the company's capital reserves and profitability. In the case of the increasing popularity of intelligent driving, how to effectively maintain and absorb R & D talents will have a decisive effect on whether enterprises can continue to maintain their technological advantages.
For auto companies, the key is to find ways to deal with challenges and eliminate risks.
"Geely will strengthen the deployment of localization and self-developed chip routes, and solve the problem of chip shortage in a variety of ways through a variety of technical route solutions." Gan Jiayue said that based on years of industrial accumulation, on the one hand, it actively coordinates supply-side resources and makes feasible solutions in supply chain security; on the other hand, it strengthens the self-research capabilities of intelligent electric vehicles and increases investment in research and development.
In response to the shortage of chips, Xu Hui, secretary of the board of directors of Great Wall Motors, said that Great Wall Motors will increase chip procurement efforts and strive for more supply from suppliers. In addition, look for more chip suppliers.
For the lack of cores and the increase in the price of raw materials, industry insiders have made suggestions and suggestions: encourage chip and automobile companies to accelerate technology research and development and collaborative innovation. Actively expand the production capacity of automotive chips, improve the quality and level of supply, and effectively resolve the contradiction of shortage of automotive chips.
Lin Nianxiu, deputy director of the National Development and Reform Commission, said at the 2022 China Electric Vehicle 100 Forum that it is necessary to strengthen the construction of lithium, nickel, cobalt and other resource security systems, do a good job of ensuring supply and price stability, and accelerate the construction of a diversified supply system of development and procurement, domestic and international mutual assistance.