Yutong Bus: The new energy road of the leader of medium and large buses

Image source @ Visual China

Wen | Spirit Cat Finance

According to the "2020 Transportation Industry Development Statistical Communiqué" issued by the Ministry of Transport, the total length of highways in the country as of the end of the year was 5.1981 million kilometers, an increase of 185,600 kilometers over the end of the previous year.

The huge road network has bred a developed road transport industry, and with the support of strong infrastructure, the scale of the mainland freight market and passenger transport market is in a stage of rapid development.

In addition to basic road facilities, the road transport industry is also inseparable from the support of vehicles, and the strong market demand has also provided fertile soil for the growth of some enterprises. In the 2021 Fortune China 500 list, Yutong Bus Co., Ltd. was selected for the list, ranking 436th.

However, with the release of the 2021 annual report, there seems to be hidden worries under the grand scene of Yutong Bus.

Performance has picked up, and sales are in a dilemma

In recent years, affected by the epidemic, the demand at the end of the road passenger transport market has shrunk sharply, coupled with the new transportation substitution effect, the demand for buses at home and abroad is in a downward trend, which is also the main reason for the decline in Yutong bus sales year after year. In the long run, affected by the new transportation substitution effect, the demand for road passenger transport has shown a downward trend; in the short term, due to the emergence of the epidemic, the enthusiasm of residents to travel has been hit, and the total demand for passenger transport has decreased.

In the face of the impact of external unfavorable factors, Yutong Bus is not encountering a problem of a company, but an industry problem, with the change of domestic subsidy policy for new energy vehicles, as well as the contraction of market demand, the total demand for domestic large and medium-sized bus industry fell by 15.31% year-on-year.

Under the contraction of bus demand in the domestic market, the demand for overseas market seems to be gradually waking up. According to the financial report data, the domestic sales of Yutong Bus in 2021 were 36918 vehicles, compared with 37996 units in the previous year, an increase or decrease of -2.85% year-on-year; while overseas sales in 2021 were 4916 vehicles, compared with 3760 vehicles in the previous year, an increase or decrease of 30.74% year-on-year.

And the main demand in the overseas market is medium and large buses, in the domestic market in the case of large bus sales in trouble, the overseas market has become the main position for medium and large buses to open sales. According to the financial report data, the overseas sales of Yutong Bus large buses in 2021 were 3422 units, compared with 3076 vehicles last year, an increase or decrease of 11.25% year-on-year; the overseas sales of medium-sized buses in 2021 were 1489 units, compared with 676 units last year, an increase or decrease of 120.27% year-on-year. In the case of the decline in the domestic medium and large bus market demand, the overseas market seems to have become a key position for bus companies to take seriously.

New energy subsidies are retreating, and "double carbon" may become a new driving force

Affected by the policy, a large number of consumers choose to buy new energy vehicles, and with the withdrawal of new energy subsidy policies and the impact of the "double carbon" strategy, the prospects in the bus field are confusing.

Eliminating fuel vehicles and vigorously developing new energy vehicles, it seems that it has become a general consensus in the industry at present, and car companies have increased investment in research and development in the direction of new energy technology, which is affected by not only family car companies, commercial bus companies are also in line with new energy. Yutong Bus is also transforming into new energy in the case of declining sales of traditional buses.

For the layout of new energy technology, Yutong Bus also has certain technical reserves for automatic driving and intelligent safety assistance systems, as well as the core of new energy vehicles " three electric drives, electronic controls, batteries, Yutong also takes the independent research route.

As a leading enterprise in the industry, the hard power of Yutong new energy technology is still passed, but with the ebb and flow of new energy subsidies, the sales of new energy models will inevitably decline.

According to the financial report data, the sales volume of new energy models (including pure electric, plug-in and fuel cell models) of Yutong Bus in 2021 totaled 12571 units, compared with 16461 units sold in the previous year, the cumulative year-on-year increase or decrease was -23.63%, showing a sharp decline.

In addition to the decline in sales, Yutong has also adjusted the production of new energy models. The data shows that the output of new energy models of Yutong Bus in 2021 is 12765 units, and the production models are mainly pure electric, compared with the total output of new energy models in the previous year of 16449 units, an increase or decrease of -22.4% year-on-year.

The decline in the output of new energy models has a certain relationship with the revenue and subsidies of new energy vehicles. Yutong Bus in 2021 new energy vehicle revenue totaled 918303.31 million yuan, new energy vehicle subsidies amount of 598.3339 million yuan, subsidies accounted for 6.52%, with the new energy subsidies retreating, it is expected that the sales of new energy models and new energy vehicle revenue and subsidies will show a downward trend.

But the other side of the retreat of new energy subsidies is that the "double carbon" strategy is becoming a new driving force to promote the progress of new energy buses.

Double carbon is a two-stage carbon reduction goal proposed by the mainland, that is, carbon dioxide emissions strive to peak in 2030. The proposed dual-carbon strategy is not only to promote global climate governance, but also an important strategic goal to tackle a clean and beautiful world, and now the "double carbon" goal has become an important indicator of the development direction of the automotive industry.

And in the automotive industry, commercial vehicles emit far more carbon than other vehicles. According to relevant statistics, as of 2020, the number of commercial vehicles carrying goods accounts for about 10% of the total number of vehicles in the mainland, but it consumes 51% of the country's vehicle gasoline and diesel, carbon dioxide emissions account for 56%, and PM pollutant emissions account for up to 80%.

New energy of commercial vehicles is the key to whether the "double carbon" goal can be successfully achieved, and now the figure of new energy buses has appeared in many cities and towns, and it is expected that under the influence of the "double carbon" strategic goal, new energy buses may become the key point of Yutong bus performance growth.

R&D investment is strong, and long-termists can accumulate thick and thin

According to public data, Yutong Bus Company invested 1.774 billion yuan in research and development in 2019, accounting for 5.82% of the operating income of the year; in 2020, in the face of adverse factors such as the new crown pneumonia epidemic, the company's R & D investment was 1.552 billion yuan, accounting for 7.15% of the operating income of the year.

In the overall downward trend of the industry in 2021, Yutong Bus's annual report for the first half of 2021 shows that the R&D investment in the first half of the year was 630 million yuan, accounting for 6.42% of the operating income; the annual R&D expenditure was 1.561 billion yuan, accounting for 6.72% of the operating income.

According to 2021 enterprise data, the cumulative number of patents disclosed by Yutong Bus is 4,004, including core technologies such as the Internet of Vehicles, the "three electricity" of new energy vehicles, and road collaboration, which will burst out of great value when the new energy vehicle network is landed and the vehicle network road collaboration is truly commercialized.

With the gradual weakening of the impact of the epidemic, the steady recovery of the scale of passenger transport in the country in the future, the continuous optimization of the structure of the ordinary trunk road network, and the continuous expansion of the scale of the rural road network, the new energy buses that tend to be greener and more efficient and convenient may stimulate great vitality.