Today, we will talk about BYD, a company that recently announced that it will stop selling traditional fuel vehicles, from relying on fuel vehicles to make money to subsidize pure electric vehicles, to losing this relatively profitable business, BYD spent 20 years. So why lose a fuel car? Many friends, including BYD itself, have interpreted it as an all-out transformation, in short, it is all praise, but I see some clues from its financial reports.
As we can see from the above figure, its production capacity of new energy vehicles has been fully saturated, and the utilization rate of passenger cars has reached 99.5%, while commercial vehicles are more than 100%. That is to say, the hot sales of new energy vehicles in 2021 have exhausted production capacity, and new production capacity is urgently needed to supplement the expected continuous sales growth.
Judging from BYD's sales, 77.8% of passenger cars are new energy vehicles, and 100% of commercial vehicles are new energy vehicles. In this case, the original rely on new energy vehicles for publicity, the traditional fuel vehicle volume and profit-making practices, has no longer been applicable, traditional fuel vehicles have become a chicken rib product that needs to be determined to cut.
From the bubble chart, BYD's operation in 2021 is quite good, and the revenue volume and revenue growth rate have hit a record high in ten years, with the largest bubble in the chart, the highest position; while the net profit performance is average, in the middle right position, lower than 2016, 2017 and 2020.
BYD's revenue is not small, under such a large volume. Growth was rapid, with only a slight correction in 2019 and then a return to rapid growth, doubling revenue in just 5 years compared to 2021 and 2016.
The growth of net profit is general, affected by the industry, there are increases and decreases, 2021 and its 6 years ago in 2015, can only be regarded as almost the same.
Speaking of BYD, there must be friends who think of Tesla, I saw a video some time ago, when the host asked Musk what he thought of BYD, Musk smirked with bad intentions and made sarcastic remarks.
Is Musk qualified to satirize BYD? I think comparing the performance of the two companies will have the answer.
Tesla's revenue is simply converted using the market exchange rate as of April 11, 2022
I think there may be that qualification, because Tesla's revenue scale in 2017 is not as good as BYD, but it has grown faster every year, and it has been equalized in 2018, and has exceeded BYD by 50% in 2021. We need to know that 82% of Tesla's business is car sales, and BYD's proportion is 52% as we will talk about later, which means that Tesla's new energy vehicle revenue is more than twice that of BYD.
If you compare the net profit, Tesla is more than 10 times that of BYD; the net profit margin on sales is also more than 6 times that of BYD. We can only say that the revolution has not yet succeeded, and comrades still need to work hard.
In 2021, BYD's gross profit margin is also declining, and this decline has fallen to the lowest level in nearly 10 years, although in 2021 by the price increase of raw materials, especially the price of chips, but this somewhat makes people worry about its subsequent performance. Its return on net assets is also relatively low, which is mainly related to its financial strategy, that is, its financial leverage is not used much.
In addition, bydir's other products are deducted
In 2021, 52% of BYD's products are automobiles and related businesses, down two percentage points year-on-year, and the proportion of these two percentage points has increased in mobile phone components and assembly business. BYD may need to complete the business of spinning off mobile phone components as soon as possible, and spend its main energy into the increasingly incentivized competition for new energy vehicles, so as not to affect each other between the two less synergistic businesses.
Although overseas business has declined, there is still a 30% proportion, which is not bad. Here I would like to say that among the hundreds of companies I analyzed, BYD is the only company that has incorporated Hong Kong, Macao and Taiwan into its domestic business, which may be to reflect its patriotic approach, in fact, other companies are not unpatriotic, but the business model of Hong Kong, Macao and Taiwan is relatively close to other overseas business, so it is put together, who is the right approach? I don't want to evaluate.
From the perspective of gross profit margin comparison by product and region, the gross profit margin of the automotive and related businesses is down, but still as high as 17.4%, while the gross profit margin of its mobile phone parts and assembly business has dropped to 7.6%, which once again shows the necessity of its spin-off of the business. The gross profit margin of its overseas business is low, but considering the impact of export tax rebates and the like, the 7% level is not too low.
BYD's fastest-growing business is not automotive and related businesses, but the lowest among the three core businesses, and the main growth is also in China. It seems that opening up the international market is still an important problem facing it, if the international market can also compete with Tesla and the like, it is estimated that Musk will not be so bad smile.
Looking at its cost and expense composition and revenue ratio, although the total cost of operation in 2021 is the same as that of 2019, the structure has undergone a major change, when the gross profit margin is as high as 16.3%, the operating cost (cost of sales) accounts for only 83.7%, and the proportion of expenses during the period is relatively high; and in 2021, it is obvious that the scale effect is played out, and the operating cost (cost of sales) accounts for 87%, still maintaining the same level of total cost and 2019. But it is inevitable that it will be higher than 2020.
During the period, the proportion of expenses and so on decreased significantly, a total of 2.9 percentage points, mainly due to the largest decline in financial expenses, but we see that the proportion of its research and development expenses is also declining, fortunately, the amount is still slightly increased.
Only the growth of operating costs and "taxes and surcharges" exceeds revenue, and the others are relatively slow, it seems that reducing costs is still the next step for BYD to work hard, although it is already better at this work. But now that its opponent is Tesla, which does not play by the rules, many of its previous advantages may need to be re-evaluated and improved.
I predicted many years ago that BYD may be a first-line brand in China after the transformation of pure electric vehicles, and now it seems that there is such a trend. However, it may be that I have been ostracized by various parties in previous years, and some of the marketing methods I have chosen now make me feel a little uneasy. I still think that doing a good job of the product carefully, not bundling with other unrelated things, may be more conducive to its sustainable development. Putting aside this problem, it still has practical problems such as high cost, and I hope that its follow-up can be successfully solved!