Beiqi Blue Valley's high-end intelligent transformation has a long way to go: a loss of 11.7 billion yuan in two years, and sales of only 26,000 vehicles

"Investor Network" Ge Fanmei

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Although the new energy vehicle market is booming, the first stock of new energy vehicles in the past, Beiqi Blue Valley New Energy Technology Co., Ltd. (hereinafter referred to as "Beiqi Blue Valley", 600733.SH) has accumulated losses of more than 10 billion yuan in the past two years, and its high-end intelligent transformation does not seem to be ideal.

On March 26, Beiqi Blue Valley released its 2021 annual report. In 2021, Beiqi Blue Valley achieved operating income of 8.697 billion yuan, an increase of 64.95% year-on-year; net profit attributable to the mother of 5.244 billion yuan, a loss of 19.11% year-on-year; net cash flow from operating activities of 4.985 billion yuan, compared with -6.621 billion yuan in the same period last year, achieving a negative to positive; basic earnings per share of -1.3 yuan.

In the face of adverse factors such as the epidemic, "lack of core" and price increases of parts, Beiqi Blue Valley has lost money for two consecutive years. At the time of its commitment to high-end intelligent transformation, car sales performance is flat, with total sales of only 26,100 vehicles in 2021, with a market share of 0.74%. In this case, it is still unknown whether Beiqi Blue Valley can strive to achieve the annual sales target of 100,000 vehicles in 2022. Beiqi Blue Valley's high-end brand ARCFOX (or "Extreme Fox") seems to be the key to the company's intention to break the game.

From the perspective of the secondary market, the stock price of Beiqi Blue Valley has fluctuated significantly since 2021, and the lowest value of the stock price during the period is 6.95 yuan / share, which is 19.87 yuan / share compared with the highest value, down 65%. As of the close of trading on April 7, Beiqi Blue Valley's stock price was 7.19 yuan per share, with a market value of 30.8 billion yuan and a price-to-earnings ratio (TTM) of -5.9 times.

Beiqi Blue Valley stock price trend chart since 2021 (unit: yuan / share)

(Source: Oriental Fortune Network)

The cumulative loss in two years exceeded 10 billion yuan

According to public information, BAIC Blue Valley is the main carrier of BAIC Group's new energy vehicle business layout. The main business and assets of BAIC Blue Valley are composed of subsidiary BAIC BJEV, which is mainly engaged in new energy vehicles.

BAIC BJEV was founded in 2009. After years of development, in September 2018, BAIC BJEV became the first A-share new energy vehicle through the listing of backdoor forward shares, and changed the company's Chinese name to "BAIC Blue Valley New Energy Technology Co., Ltd."

After the listing, the performance of Beiqi Blue Valley was not ideal. Wind data shows that from 2019 to 2021, the company's operating income was 23.589 billion yuan, 5.272 billion yuan and 8.697 billion yuan, and the performance fluctuations were more obvious; the net profit in the same period was 0.04 billion yuan, -6.476 billion yuan and -5.17 billion yuan, and the net profit attributable to the mother was 0.92 billion yuan, -6.482 billion yuan and -5.244 billion yuan, respectively, and the cumulative loss of the net profit attributable to the mother in 2020 and 2021 reached 11.726 billion yuan.

Beiqi Blue Valley has suffered a large loss after listing, or it is caused by a reduction in government subsidies. In 2018 and 2019, the net profit attributable to the mother of Beiqi Blue Valley was 0.73 billion yuan (adjusted) and 0.92 billion yuan respectively; of which the government subsidies included in the profit and loss of the current period were 918 million yuan and 1.042 billion yuan, respectively, so the net profit attributable to the mother after deducting non-recurring gains and losses was -729 million yuan and -874 million yuan, respectively.

In 2021, Beiqi Blue Valley received subsidies for new energy vehicles of 268 million yuan, and the net profit after deducting non-recurring gains and losses was -5.544 billion yuan.

For the 2021 performance loss, Beiqi Blue Valley said in the announcement that the main reason is that the production and sales of Beiqi Blue Valley have not met expectations and continuous marketing and research and development investment.

According to the 2021 pre-loss announcement previously released by Beiqi Blue Valley, due to the impact of the new crown pneumonia epidemic and the supply of raw materials, the production and sales of Beiqi Blue Valley have not reached expectations, and the existing gross profit cannot cover the inherent costs, and the impact on the performance of Beiqi Blue Valley is about 2-2.5 billion yuan.

In addition, in order to realize the transformation of products to high-end and fully promote the promotion of the Jihu brand and the construction of channels, Beiqi Blue Valley has increased its brand communication efforts, and sales expenses such as advertising and operation have increased, which has an impact on the performance of Beiqi Blue Valley by about 1.7 billion yuan. Beiqi Blue Valley continued to build independent technical capabilities, increase R&D investment, and the impact of R&D expenses on the company's performance was about 1.1 billion yuan.

According to the annual report, in 2021, the sales expenses of Beiqi Blue Valley were 1.672 billion yuan, an increase of 65.83% year-on-year, mainly due to the increase in advertising exhibition fees and operating expenses compared with the previous period.

It is worth mentioning that, according to the announcement of the provision for impairment, in 2021, Beiqi Blue Valley made a total impairment provision of 1.307 billion yuan for fixed assets and intangible assets, and a provision for bad debts of 213 million yuan; in 2021, the company's total consolidated profit for the year decreased by 1.094 billion yuan.

Sales are not as fast as peer growth rates are lower than the industry

As the "first stock of new energy vehicles" in the domestic capital market, Beiqi Blue Valley has been based on the new energy automobile industry for more than ten years, and its sales performance has been eye-catching.

According to public data, beiqi Blue Valley's new energy vehicle sales have increased from 1623 in 2013 to 158,000 units at its peak in 2018, and from 2013 to 2019, it has won the domestic new energy vehicle championship for seven consecutive years.

The so-called "got up early in the morning, rushed to a late set." Taking 2019 as an example, Beiqi Blue Valley ranked first in domestic pure electric vehicle sales with an annual sales volume of 150,000 vehicles, but about 70% of the sales volume came from the B-end market, and sales channels included online car-hailing, official car, taxi, etc.

As the B-end market tends to saturate, the sales volume of Beiqi Blue Valley has been seriously frustrated. By 2021, the annual sales of new energy vehicles in Beiqi Blue Valley will only be 26,100 units, compared with 2020, only 0.82% year-on-year, and the sales volume in two years will be almost flat. According to the annual report, the sales volume of BAIC Blue Valley includes some cooperative models jointly developed by BAIC BJEV and BAIC Motor, produced by BAIC Motor and sold by BAIC BJEV.

Compared with the new power enterprises of new energy car manufacturing, in 2021, Xiaopeng Automobile delivered 98,000 vehicles, Weilai Automobile sold 91,000 vehicles, and Ideal Automobile also delivered 90,000 vehicles.

In addition, BAIC Blue Valley, SAIC Motor Group and GUANGZHOUC Group are both state-owned assets, and they have all been transformed from traditional car companies to lay out new energy vehicle tracks, and the gap between the three is also more obvious. According to the data, in 2021, saicur group and GAC group's new energy vehicle sales were 732,600 units and 142,900 units, respectively, which were much higher than the annual sales of 26,100 units in Beiqi Blue Valley.

In 2021, Beiqi Blue Valley has less market share in new energy vehicles, and the sales growth rate is lower than the industry level.

According to the statistics of the Association of Automobile Manufacturers, the wholesale sales of new energy vehicles in China will reach 3.507 million units in 2021, an increase of 165.10% year-on-year. Among them, the production and sales of pure electric passenger cars were 2.76 million units and 2.73 million units, respectively, an increase of 179% and 174% year-on-year.

From this simple calculation, the sales volume of Beiqi Blue Valley will account for only 0.74% of the wholesale sales of new energy vehicles in China in 2021. In addition, the annual sales growth rate of 0.82% of Beiqi Blue Valley is also significantly lower than the growth rate of 165.10% in the industry.

In terms of automobile production, in 2021, Beiqi Blue Valley produced 6369 pure electric passenger cars, a year-on-year decrease of 51.84%.

Dai Kangwei, manager of BAIC Blue Valley and general manager of BAIC New Energy, said, "In 2022, the sales target of BAIC Blue Valley is 100,000 vehicles, of which 40,000 are Jihu. He also stressed, "This is the confidence brought by the foundation of the past year, and this year (2022) will also be a key year for the transformation of the Jihu brand from the initial recognition to high-quality development." ”

According to the February 2022 production and sales express, Beiqi Blue Valley sold a total of 3385 vehicles in that month, an increase of 62.43% year-on-year, and only 3.4% of the target was completed.

Increase the high-end intelligent transformation

At present, Beiqi Blue Valley has two brands, the high-end intelligent new energy vehicle brand ARCFOX and the economic intelligent new energy vehicle brand Beijing (BEIJING), of which The Pole Fox has now listed two high-end pure electric passenger cars, Alpha T and Alpha S.

The Beijing brand is an economic intelligent new energy vehicle brand built by the company based on 60 years of car manufacturing experience of BAIC Group, and currently mainly has EU series products, and the main models are EU5, EU5 PLUS and EU7.

The Jihu brand is the weight of Beiqi Blue Valley's breakthrough to the high-end market, and the company continues to innovate. In April 2021, the new HI version of the Polar Fox Alpha S was officially released, which is a high-end intelligent luxury pure electric sedan equipped with Huawei's full-stack autonomous driving solution, and the world's first mass-produced car with intelligent driving capabilities in urban areas.

According to the data, Beiqi Blue Valley is the only car company to sign an 8-year contract with Huawei to "give priority to each other", and Beiqi Blue Valley and Huawei jointly set up the "1873 Davidson Innovation Lab" to jointly develop intelligent networked electric vehicle technology.

In fact, in order to transform to high-end intelligence, Beiqi Blue Valley has also deeply bound and cooperated with Magna (an auto parts manufacturer) to win the first Magna joint venture high-end intelligent manufacturing base in Asia, bringing comprehensive and reliable high-end quality assurance to its products.

At the same time, Beiqi Blue Valley is also increasing investment in research and development. In 2021, its research and development expenditure was 1.208 billion yuan, an increase of 24.14% year-on-year. Among them, in May 2021, Beiqi Blue Valley will raise an additional capital of 5.5 billion yuan for the development and network construction project of high-end models of the Jihu brand, the upgrading project of 5G intelligent network connection system, the development project of power exchange business system and the supplementary working capital.

Among them, Beiqi Blue Valley plans to use the raised funds of 2.628 billion yuan to invest in the development of high-end models and network construction projects of the Jihu brand. The project includes the development of the N50AB model positioned in the mid-to-high-end A-class pure electric SUV, the development of the N60AB series of high-end A+ pure electric SUV, and the development of the N61AB series of high-end A+ pure electric slip-on crossovers. The project will be implemented by BAIC BJEV, a wholly-owned subsidiary of the Company.

Beiqi Blue Valley has stepped up research and development, and joined forces with Magna and Huawei to try to transform to high-end models, but the truth has not been as desired. The data shows that in 2021, the Jihu brand sold 6,006 vehicles throughout the year and delivered 4,993 vehicles throughout the year. This is obviously far from the annual target of 40,000 vehicles this year.

Beiqi Blue Valley Polar Fox positioning high-end brand, from the perspective of specific models, the sales of each model is not optimistic. Since its listing in October 2020, the Pole Fox Alpha T, which starts at 241,900 yuan per unit after subsidy, has sold more than 500 vehicles in a single month, with a cumulative total sales volume of only about 4,000 vehicles; the Pole Fox Alpha S, with a maximum sales price of 692 units in a single month, has sold a total of 3,590 units since its listing.

The new HI version of the Polar Fox Alpha S, which was jointly built with Huawei, was originally scheduled to be officially delivered at the end of 2021, but it is still in difficult production.

As early as April 2021, Liu Yu, chairman of Beiqi Blue Valley, told the media that the new HI version of the Jihu Alpha S jointly created with Huawei "Our large-scale delivery is in the first quarter of next year, and the end of this year (2021) is a small batch, around 500 to 1000 vehicles, depending on the supply chain situation." ”

The new HI version of the Polar Fox Alpha S was not delivered as scheduled. Some investors asked Beiqi Blue Valley on the investor interaction platform about the reason why as of the end of the first quarter of 2022, there was still no HI version of the owner to get the car. In this regard, Beiqi Blue Valley said on the investor interaction platform on April 6, "We are actively promoting the batch delivery to users in 2022, and please pay attention to the official release of relevant information." ”

At present, Beiqi Blue Valley is rapidly expanding the channel of the Polar Fox brand. By the end of 2021, Jihu Automobile has completed more than 120 authorized construction outlets. In particular, 15 key cities where sales account for more than 80% of the high-end pure electricity market have achieved 100% coverage; for 21 cities with potential, 35 stores have been completed.

Tianfeng Securities pointed out in the research report that Beiqi Blue Valley is one of the pioneers of the domestic new energy automobile industry, and in recent years, it has cooperated with many advantageous enterprises in the fields of "three electric systems" (that is, batteries, motors, electronic controls for electric vehicles), automobile intelligence, etc., and its car-making strength has been continuously enhanced. The company's high-end intelligent model Jihu Alpha S new HI version launched by the company in cooperation with Huawei is expected to open a new era of intelligent electric vehicles. (Produced by Thinking Finance)■