In the trade-off between joint venture and autonomy, GAC Group has been in a state of pulling and fission.
The two-level differentiation of the joint venture brand has made GAC Group passive. In order to refine its autonomous capabilities, GAC has finally made a big move in the past two years.
It can be seen from the 2021 financial report released by GAC that in this upward "pull" process, the independent fission of GAC Group has progressed and there is also pressure.
After two years, net profit returned to growth
At the end of March, GAC Group announced its 2021 financial report. According to the report, the annual consolidated total revenue of GAC Group in fiscal 2021 reached 75.676 billion yuan, an increase of 19.82% year-on-year, reaching a high point in the past five years. Although the revenue is high, due to the low profitability, the company's gross profit margin in 2021 is only 7.92%, which remains in the single digits.
At the same time, after two years, the net profit of GAC Group returned to growth in 2021. The net profit attributable to shareholders of the listed company was 7.335 billion yuan, an increase of 22.95% year-on-year.
Judging from the financial report data in recent years, GAC Group achieved net profits of 10.79 billion yuan, 10.903 billion yuan, 6.618 billion yuan and 5.966 billion yuan from 2017 to 2020, respectively. The net profit of 7.335 billion yuan achieved in 2021 increased by nearly 1.37 billion yuan over the previous year, but it has not yet returned to the high point of more than 10 billion yuan in 2018 and 2017.
At a media briefing on March 31, Zeng Qinghong, chairman of GAC Group, said that if employees are excluded from exercising equity, GAC's annual management expenses will actually decline. In terms of R&D expenses, GAC Group invested 5.108 billion yuan in R&D for the whole year, an increase of 0.66 billion yuan over the same period of the previous year. In terms of cash flow, its cash and cash equivalents were about 17.235 billion yuan, an increase of 1.444 billion yuan year-on-year.
It is worth noting that the accounting link seems to be facing some pressure. Compared with 4.583 billion yuan in 2020, GAC Group's accounts receivable in 2021 increased to 7.515 billion yuan, an increase of 63.98% year-on-year; accounts payable increased from 11.802 billion yuan to 15.079 billion yuan, an increase of 27.77% year-on-year.
Back to the double rise in revenue and net profit, behind the actual increase in production and sales of GAC.
GAC Group's production and sales reached 2,138,100 units and 2,144,400 units in 2021, up 5.08% and 4.92% year-on-year, respectively, and its market share in China reached 8.16%. According to data from the China Association of Automobile Manufacturers, in 2021, the annual production and sales of automobiles were 26.0822 million and 26.2748 million vehicles, respectively, an increase of 3.4% and 3.8% year-on-year, ending a three-year continuous decline.
In other words, the changes in the production and sales and profitability of THE GAC Group have remained at the same level as the overall trend of the automotive industry to a certain extent.
Removing the "Dependency Joint Venture" tab?
Although among the joint ventures of the GAC Group, the sales of GAC Honda, GAC FCA and GAC Mitsubishi have declined to varying degrees. However, the sales volume of the joint venture still occupies the majority, and GAC Honda and GAC Toyota were the main sales and revenue of GAC Group last year, and the overall sales are still highly dependent on the joint venture.
GAC Group's largest sales last year was GAC Toyota, with sales of 828,000 units, up 8.23% year-on-year. The operating income reached 129.464 billion yuan, an increase of about 16.89% year-on-year.
Guangfeng Honda followed, with sales down 3.17% year-on-year, but still reaching 780,300 units. Achieved operating income of 114.810 billion yuan, a year-on-year decrease of 3.05%. Zeng Qinghong said that Guangqi Honda's sales in 2021 are expected to hit 900,000 vehicles, but due to chip supply problems, sales are greatly limited.
In addition, GAC FCA and GAC Mitsubishi are still in a state of loss in sales decline in 2021, falling behind in the joint venture brand.
Compared with the joint venture, GAC Passenger Cars and GAC Aeon, the two independent business subsidiaries of GAC Group, still have a small proportion of sales.
In 2021, GAC Motor's passenger car sales were 324,200 units, an increase of 10.35% year-on-year, and the operating income was 52.885 billion yuan, an increase of about 26.02% year-on-year; GAC Eian's sales volume was 120,100 units, an increase of 101.80% year-on-year, and the operating income was 17.265 billion yuan, an increase of about 84.27% year-on-year.
Although the proportion of independent sales is small, a new change is that independent sales and revenue are growing faster than joint ventures.
In terms of capacity utilization, Guangben, Guangfeng and Eian all performed better, while the capacity utilization rate of the Trumpchi brand was only 45.31%, and GAC Mitsubishi and GAC FCA fell into a more serious capacity utilization dilemma, with a capacity utilization rate of 30.55% and 5% respectively.
Whether it is sales, revenue, or capacity utilization, the "two-level differentiation" of GAC's joint venture in 2021 has become more and more obvious. Although the joint venture has brought sales scale and profits, ITC clearly needs more than that.
For the sake of self-fission, Aehan had no room to lie flat
According to Zeng Qinghong's projected target, in 2022, GAC Group will challenge the goal of 15% year-on-year increase in automobile production and sales for the whole year, and the group's sales growth rate in the first quarter will reach 20%.
According to GAC's product plan, 15 or more new, replacement or medium-term remodeled models will be launched this year, including GAC Trumpchi EMKOO mass production models, M8 replacement models, Shadow Leopard Hybrid Edition, GAC Aion AION LX Plus, AION YPlus, GAC Honda Jipan 1, GF Bz4x, Weisa, Fenglanda and GAC Mitsubishi's first pure electric model Atuka.
In order to develop high-end, GAC Group also plans to launch a pure electric supercar model this year, with zero hundred acceleration of 1.9 seconds, which is expected to be delivered at the end of the year or early next year.
It can be seen from the outbreak of product planning that the joint venture and autonomous matrix of GAC Group are accelerating the electrification transformation. However, in the short term, the supply problems of production capacity and industrial chain still lead to many uncertainties.
The financial report shows that the capacity utilization rate of GAC Aean, GAC Honda and GAC Toyota has reached its limit. In addition, Zeng Qinghong mentioned that due to the shortage of supply chain, the group's production capacity of 42,000 vehicles in the first quarter was affected, and trumpchi has 32,000 orders and 50,000 orders for EIAN to be delivered. This means that capacity and chip issues can pose challenges.
In terms of chips, GAC Group has successively invested in chip companies such as Horizon, Yuexin Semiconductor, and Changxin Storage, but the problem of independent control still exists.
In order to expand production capacity, GAC Toyota New Energy Expansion Project Phase I production capacity of 200,000 units, has been completed in July 2021, is currently expanding the second phase of the project year, production capacity of 200,000 vehicles, is expected to be completed and put into operation in 2022; GAC Aian is also increasing production, in February this year its first plant completed expansion, the annual production capacity increased to 200,000 units, while the second 200,000-year production capacity plant will also be completed and put into operation at the end of this year; GAC Honda new energy vehicle production capacity is expanding construction, with an annual production capacity of 120,000 units, is expected to be put into operation in 2024. The three major plants are expected to invest more than 13.8 billion yuan.
The big investment is obviously aimed at getting a longer-term return. Especially for Aeon, who is fully committed to GAC, the expectations are higher.
From brand independence and rebranding, to mixed reform and expansion of production capacity, GAC has been blunt about the purpose of launching E-An - to achieve an IPO and then empower the group.
According to the plan, GAC Aeon expects to complete the A round of financing in September this year and carry out an IPO in 2023. At the media communication meeting, Zeng Qinghong bluntly said that at present, there are more than 250 potential investors and institutions in Aian, and it is expected to choose 30 companies, exchange 30% of the equity for 50 billion yuan of financing, or will all invest in research and development.
Interestingly, GAC has also targeted Ae-an to the new car-making forces. Feng Xingya, general manager of GAC Group, mentioned that one of the purposes of mixed reform is to change "Wei Xiaoli" into "Ai Xiaowei".
From the perspective of sales, Aian's total sales reached 120,000 vehicles last year; from January to March this year, Aian's sales were 16,031 vehicles, 8,526 vehicles and 20,317 vehicles, respectively. Aeon's sales have actually surpassed that of Wei Xiaoli.
Therefore, the "Ai Xiaowei" mentioned by Feng Xingya may be the catch-up of the degree of "explosive style" and the degree of topic. After all, what GAC needs more urgently at present is a new energy explosive product and the side view of capital.