Introduction: New energy subsidies of more than 5.8 billion yuan, government subsidies of 2.26 billion yuan, behind the record-making financial report, can not be separated from the contribution of taxpayers.
Lately, Wang Chuanfu has been very busy!
In the past month or so, BYD has made a bit of a lot of moves, and they are all big things, such as: disclosing the 2021 financial results, announcing the latest March sales, and announcing the suspension of the production of fuel vehicles.
A series of news superimposed on the impact of the epidemic and the international situation, in just a few trading days, BYD's A+H dual stock price has risen and fallen. As of the close of trading on April 14, BYD A/H shares closed at 241.29 yuan per share and 239.8 Hong Kong dollars per share, respectively.
So, how exactly will BYD's financial performance in 2021 be? After "bidding farewell" to traditional pure fuel vehicles, what will BYD face?
1) Earn more and spend more
In 2021, BYD's cumulative sales of automobiles were 740,100 units, up 73.34% year-on-year. Driven by the sharp rise in sales, BYD's total operating income hit a record high of 216.142 billion yuan, up 38.02% year-on-year.
From the financial report, BYD's main business is three major parts: automobile business, mobile phone components and assembly business, secondary rechargeable battery and photovoltaic business.
According to the financial report, in 2021, the revenue of BYD's automobile business was about 112.489 billion yuan, an increase of 33.93% year-on-year; the revenue of mobile phone parts and assembly business was about 86.454 billion yuan, an increase of 43.99% year-on-year; and the revenue of the rechargeable battery and photovoltaic business was about 16.47 billion yuan, an increase of 36.27% year-on-year. The three major businesses accounted for 52.04%, 40% and 7.62% of the Group's total revenue respectively, while the three major businesses accounted for 53.64%, 38.34% and 7.72% of the Group's total revenue in 2020, respectively.
From the perspective of revenue composition, the proportion of contributions of the three sectors has not changed much, and the automobile business still contributes half of bydir.
Unfortunately, while sales and revenue have risen sharply, BYD's net profit and investor income have not risen with it.
In 2021, BYD's net profit attributable to shareholders of listed companies was 3.045 billion yuan, a sharp decline of 28.08% year-on-year; net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 1.255 billion yuan, down 57.73% year-on-year; basic earnings per share fell from 1.47 yuan per share in 2020 to 1.06 yuan per share. This means that BYD's sales growth rate is greater than the revenue growth rate, and the revenue growth rate is greater than the significantly reduced net profit growth rate.
In this regard, many people are questioning, the revenue exceeded 200 billion yuan, dumped the Great Wall and Geely street BYD, in the end which link is the problem, measuring one of the important indicators of the company's net profit fell off the chain? In a way, for a business that has been growing for more than two decades, this is not a positive signal.
According to the financial report, while BYD's sales volume and revenue have risen sharply, many of its expenses have also risen to varying degrees, which has led to BYD's total operating cost of up to 213.848 billion yuan, an increase of 41.74% year-on-year, and the increase is significantly higher than the total revenue growth rate of 3.72 percentage points.
Among them, the operating cost was 187.998 billion yuan, an increase of 48.91% year-on-year; the business tax and surcharge were 3.035 billion yuan, an increase of 40.87% year-on-year; the sales expense was 6.082 billion yuan, an increase of 20.3% year-on-year; the management expense was 5.71 billion yuan, an increase of 32.13% year-on-year; ANDD's research and development expenses were 7.991 billion yuan, an increase of only 7.05% year-on-year.
Of course, the growth of research and development expenses is what the author likes to hear, after all, the investment in research and development is related to the hard power of a company's future development. To some extent, the amount of R&D investment also directly affects the strength of R&D capabilities, and even how far the company can go in the future.
It is worth mentioning that although BYD's R&D investment accounts for 3.7% of the total revenue, it is not prominent among listed automobile companies, but its expenditure on R& D expenses is among the best, far higher than many enterprises represented by Geely and the Great Wall, whose R&D expenses are 5.518 billion yuan and 4.49 billion yuan respectively.
However, compared with R&D expenses, operating costs, sales expenses, management expenses and other expenses have increased significantly more, which also indicates to a certain extent that BYD's cost control capabilities need to be strengthened.
After all, selling well and not making money does not conform to business logic.
2) Take the money to get soft, subsidies + subsidies 8.13 billion!
On the question of where BYD's profits have gone, we should first see where BYD's profits come from. In 2021, BYD's new energy subsidy revenue reached 5.867 billion yuan, while the government subsidy included in the profit and loss of the current period was about 2.263 billion yuan. This may mean that last year, BYD relied on government and taxpayer subsidies and subsidies, up to 8.13 billion yuan, while BYD's net profit attributable to shareholders of listed companies in the same year was only 3.045 billion yuan.
This means that excluding subsidies and subsidies, BYD's net profit is somewhat negative. In other words, the reason why BYD was able to achieve profitability last year was that the subsidies for new energy vehicles were indispensable. It is no wonder that as chairman, Wang Chuanfu has said on many occasions that the state will continue to subsidize new energy vehicles that have been commercialized and popularized. However, relying on subsidies is not a long-term solution.
As we all know, if there are no special circumstances, China's new energy vehicle subsidy policy will be terminated on December 31 this year, when new energy vehicle companies led by BYD may have no subsidies to take.
By the end of 2021, there is no new energy vehicle company in the Chinese market to make money, and car companies have launched new energy vehicles, mostly for IPOs, or "double integral" pressure, and policy subsidies can only be regarded as a drop in the bucket. But for BYD, this is a considerable income.
Nowadays, the subsidy has not been cancelled, just the slope, new energy vehicle companies have increased prices, coupled with the soaring price of raw materials, now the pressure on pure electric vehicle manufacturers is very large. If subsidies are fully abolished, enterprises will inevitably face new choices and pressures.
Since the beginning of this year, due to the increase in the price of chips and battery raw materials, including BYD, Tesla, Weilai, Ideal, Xiaopeng and other new energy vehicle brands have raised the price of their models, and do not rule out the possibility of continuing to raise prices.
When the price rises to a certain extent, it may have a certain impact on consumers of new energy vehicles. So, for BYD, the real test may be the uncertainty of next year and policy.
3) "Broken arm" to survive?
In the past, BYD has insisted that it "walk on two legs.". But now, although there are still many problems in the new energy vehicle market to be solved, BYD is still announcing the suspension of (pure) fuel vehicles at this time.
On April 3, BYD released its March production and sales report and announced that it will stop the production of fuel vehicles from March 2022 according to the needs of strategic development. In the future, BYD will focus on pure electric and plug-in hybrid vehicles in the automotive segment. This marks that BYD has become the first car company in the world to officially implement the suspension of fuel vehicles.
Affected by this, although BYD's stock price has risen, it has not continued to rise against the trend, and I am afraid that it is also related to the current market environment and the return of new energy valuations to rationality.
According to the announcement, BYD's automobile production in March was 106,700 units, an increase of 416.96% year-on-year; sales were 104,900 units, an increase of 422.97% year-on-year; and "0" in the fuel vehicle production and sales column, that is, BYD's sales in March were all derived from new energy vehicles.
In fact, BYD's move is not difficult to understand, starting in 2020, BYD's new energy vehicle sales began to climb, while its pure fuel vehicles are gradually declining, entering 2022, it will fall to the level of more than 2,000 vehicles. However, the PHEVs (plug-in hybrid vehicles) that combine fuel engines with batteries seem to perform well, allowing BYD to continue the gasoline flavor.
Therefore, BYD's decisive abandonment of fuel vehicles (more accurately, pure fuel vehicles) seems to be following the trend. In a sense, BYD's suspension of fuel vehicles seems to be somewhat flattering.
In the first quarter of 2022, BYD's cumulative sales volume was 291,400 units, up 179.78% year-on-year, of which 141,500 plug-in hybrid vehicles, up 857.4% year-on-year. However, in the field of PHEV, China's other two national brands, Great Wall Motors and Geely Automobile, will also begin to exert their strength, and their product strength may be better than BYD. At that time, it is difficult to make a conclusion on how to compete.
On the other hand, in the face of The warning of Tan Guangxu, chairman of Weichai Power, "China's new energy automobile industry is more lively, rushing to the top, and then disorderly competition, new energy vehicles, especially passenger cars, will have a catastrophic overcapacity." At the same time, the expansion of wealth through the capital market has led to the disorderly capital expansion of the capital market for new energy. "New energy automobile enterprises should pay attention to it."
Previously, the auto K line had sorted out the sales plans of many automobile companies for new energy vehicle production capacity, approaching 15 million vehicles by 2025.
Therefore, BYD should also take precautions, accelerate the layout of emerging industries, and develop real high-tech technology in addition to mobile phone OEM, so that Wang Chuanfu can make BYD become Tesla in minutes, rather than the two getting farther and farther away, always thinking of subsidizing themselves with taxpayers' money.