Months of higher sales have not driven the growth of profits, in tan Xuguang after taking office put forward the "six must achieve" goal background, the first taste of revenue, net profit double decline of the bitter fruit of Sinotruk, how will face the increasingly fierce heavy-duty truck market?
In April this year, China National Heavy Duty Truck, a listed company in the Shandong heavy-duty truck industry, disclosed that the company's main revenue in 2021 was 56.099 billion yuan, down 6.4% year-on-year; the net profit attributable to the mother was 1.038 billion yuan, down 44.79% year-on-year.
Sinotruk's revenue and net profit have both declined or are expected. Based on the performance statement of 13.13% year-on-year decline in revenue in 2021 submitted by FAW Jiefang, the automobile group that ranked first in the domestic heavy-duty truck market began to study and judge after submitting a performance statement that was not ideal.
Sinotruk is the most important subsidiary of China National Heavy Duty Truck Group, which has brands and series models such as "Yellow River", "Shandeka" and "Howo", and is the most complete heavy-duty vehicle manufacturer with the most complete driving form and tonnage coverage in China's truck industry, and one of the largest heavy-duty truck manufacturing bases in China.
In the second half of 2021, when domestic heavy-duty truck sales fell sharply, Sinotruk's market share increased against the trend, surpassing Dongfeng Group to leap to the second place in the industry, which made many analysts have high hopes for the future development of Sinotruk. However, the swinging stock price, the pressure of China VI and the challenges brought by the new four modernizations to the heavy-duty truck market have a lot of challenge pressure for a heavy-duty truck brand that has changed coaches for more than three years.
The market fell, and the share price of Sinotruk fell
The impact of the epidemic on the automotive market is still intensifying. Since the suspension of Wuhan in early 2020 caused the Chinese auto market to usher in a cold spring, now another major domestic vehicle manufacturing region Jilin Province has not been able to fully restore normal operation under the influence of the epidemic, coupled with the overall economic changes and policy changes of the market economy, the mainland heavy-duty truck market continued to enter a downward trend in March this year - the data shows that the mainland heavy-duty truck market sales in March were 77,000 vehicles, down 67% year-on-year, falling to the lowest point of heavy-duty truck market sales in March since 2017. It was also the 11th consecutive month of decline.
The declining heavy-duty truck market has put operating pressure on OEMs and dealers. In the interview with regional heavy-duty truck brand dealers, many interviewees are worried about the intelligence of the heavy-duty truck market this year, and the problems of epidemic sealing, low supply, high oil prices, and low freight rates make it difficult for drivers to resume normal driving, and also directly lead to the normal sales of OEMs in the terminal market.
Sinotruk, which achieved good sales results last year, has not been able to get rid of this situation. In the second half of 2021, Sinotruk, which won the first place in the industry's sales volume for many consecutive months, sold only 16,000 vehicles in March this year; in the first quarter of this year, Sinotruk sold about 55,700 heavy-duty trucks, down nearly 40% year-on-year.
This performance is not surprising in the market, but it will undoubtedly bring more pressure to the group's revenue and net profit indicators this year. Last year, Sinotruk won the first place in the sales volume of the heavy-duty truck industry for several consecutive months in the second half of the year, but it still failed to reverse the decline in the group's net profit; and in the face of the continuous decline in sales this year, whether Tan Xuguang will deliver another decline in the fourth year of the helm has become the focus of everyone's attention.
It is worth noting that affected by the downturn in the heavy-duty truck industry, the stock price of Sinotruk has fallen all the way. When Tan Xuguang was the chairman of China National Heavy Duty Truck in 2018, the group's stock price soared from 12 yuan / share in September 2018 to 47.6 yuan / share, but as of the opening of the market on April 11, the company's stock price was only 12.51 yuan / share, which has returned to the level at the beginning of Tan Xuguang's tenure.
In a research report released by Xiaomo a few days ago, the bank predicted that the HDT industry will have another structural downward trend of about 20% after the heavy-duty truck (HDT) industry fell by 14% last year. It believes that the downward trend in Sinotruk's earnings is structural and will continue into 2022-23. As a result, The rating of Sinotruk was reduced from "neutral" to "reduced", the profit forecast for 2022-23 was lowered by 53% and 60%, which was about 46% to 55% lower than the consensus forecast, and the target price was lowered by 53% to HK$8 from HK$17.
Competition has intensified, and the electric layout of Sinotruk has been slow
The industry crisis has caused many heavy-duty truck companies to accelerate the upgrading of industrial structure. In addition to the latest implementation of the National VI standard, the transformation and upgrading of electrification and intelligence has also accelerated in the heavy-duty truck market.
The rise in oil prices caused by the Russo-Ukrainian war has magnified the prospect of pure electric vehicles; the regional isolation of drivers under the epidemic has made everyone think about the application and development of long-distance road driverless technology. In the heavy-duty truck market, faw Jiefang, a leading enterprise, is accelerating its transformation to electrification, saying that "the company has laid out five major vehicle product platforms for heavy, medium, light, micro and passenger in terms of new energy products, and laid out three technical routes of pure electric, hybrid and fuel cells," aiming to accelerate the transformation to new energy business.
In contrast, Sinotruk's layout in the pure electric market is slightly sluggish, and even at the annual performance conference of Weichai Power held earlier this month, Tan Xuguang, who is the chairman and CEO of Weichai Group, also made a multi-faceted comment on the current hot electrification and intelligent trend in the passenger car field.
Tan Xuguang publicly said: "In recent years, the new energy industry has been relatively lively, rushing to the top, and then disorderly competition, new energy vehicles, especially passenger cars, there will be a catastrophic overcapacity, through the expansion of wealth in the capital market, resulting in disorderly capital expansion of new energy in the capital market." At the same time, it believes that "assisted driving is hoped, and specific environments can be achieved." Driverless is currently only suitable for use in mines. ”
This remark has caused widespread discussion in the market, and behind the remarks is the fact that China National Heavy Duty Truck is taking the hydrogen energy route and is slow in the electric market. The hydrogen energy technology explored by Sinotruk was developed in cooperation with Weichai Power, and the first batch of steam-hydrogen fuel heavy tractors delivered to the Port of Shandong in January this year was supported by Weichai's self-developed hydrogen fuel cell system. However, compared with the electric vehicle market, the future development of hydrogen energy heavy trucks still has limitations. In the previous forecast of CITIC Securities, it said that the sales volume of hydrogen energy heavy trucks in 2022 is expected to reach 3,500 units, which is tantamount to a drop in the bucket for Sinotruk.
Tan Xuguang was born in China National Heavy Duty Truck, and later due to various problems within the group, he broke away from Heavy Duty Truck to print Weichai Power, and gradually made the latter bigger and stronger. In 2018, Tan Xuguang returned to Sinotruk and served as the chairman of the board, and under the story of a series of "grudges and grudges" with his old owner before, how Tan will balance the development between Heavy Duty Truck and Weichai Power is also the focus of industry insiders.
At the beginning of his tenure, Tan Xuguang proposed that Sinotruk "must realize the strategic vision of a full range of commercial vehicles in the forefront of China and the world, and build China's leading commercial vehicle group in 3-5 years". Now that it has reached the fourth year of his term of office, Sinotruk's sales have outperformed the market and the revenue and net profit are not ideal, the technology iteration is accelerating and the group's pure electricity layout is slow, coupled with the industry institutions' concerns about the future prospects of heavy-duty trucks, the future development prospects of Sinotruk are unpredictable.