Revenue exceeds 100 billion yuan in 2021 Changan Automobile's multi-brand attack on new energy

"I hope you will notice that Changan Automobile no longer defines itself as a traditional manufacturing enterprise, but transforms itself into a smart and low-carbon travel technology company." Recently, Chongqing Changan Automobile Co., Ltd. (000625. Zhu Huarong, chairman of SZ, hereinafter referred to as "Changan Automobile"), said at the 2021 annual performance briefing.

In the past 2021, Changan Automobile achieved operating income of 105.142 billion yuan, an increase of 24.33% year-on-year; net profit attributable to shareholders of listed companies (hereinafter referred to as "net profit attributable to the mother") was 3.552 billion yuan, an increase of 6.87% year-on-year.

In terms of sales performance, in 2021, Changan Automobile Group achieved wholesale sales of 2.301 million units, an increase of 14.8% year-on-year, achieving growth for three consecutive years; the wholesale sales volume of Changan Chinese brand passenger cars was 1.204 million units, an increase of 23.1% year-on-year.

The reporter of China Business Daily noted that since the disclosure of the 2021 annual report and the first quarter report of 2022 on April 28 and April 29, the trading price of Changan Automobile's stock has accumulated more than 20% on the day of the disclosure of the above two reports and the closing price increase on May 5 for three consecutive trading days.

On May 6, in response to the abnormal fluctuations in the company's stock price, Changan Automobile also issued an announcement that the company's current operation is normal and there is no violation of fair information disclosure regulations.

Improved profitability

In the face of repeated epidemics, lack of cores and lack of electricity and other industry challenges, Changan Automobile handed over a "report card" of operating income exceeding 100 billion yuan in 2021.

According to the 2021 annual report, Changan Automobile achieved operating income of 105.142 billion yuan, an increase of 24.33% year-on-year; and achieved a net profit attributable to the mother of 3.552 billion yuan, an increase of 6.87% year-on-year. Changan Automobile pointed out in the annual report that "the net profit is good year-on-year, mainly due to the increase in sales volume of the company's independent sector, the improvement of operating quality, the substantial increase in profit year-on-year, and the overall profitability of the joint venture sector." ”

The reporter noted that among the main participating companies of Changan Automobile, Changan Ford Automobile Co., Ltd. (hereinafter referred to as "Changan Ford") achieved a net profit of 2.284 billion yuan in 2021, while Changan Mazda Automobile Co., Ltd. achieved a net profit of 860 million yuan in 2021.

In terms of vertical comparison, in 2020, Changan Automobile's long-term equity investment income calculated under the equity method from Changan Ford was 8.71 million yuan, while in 2021, this investment income has increased to 1.143 billion yuan. Changan Automobile also said in its 2021 annual report that "Changan Ford's profit has increased significantly due to improved product structure, rising sales, and material cost reduction." ”

From a product point of view, the growth of Changan Automobile's operating income in 2021 is also closely related to its sales performance in that year. In 2021, Changan Passenger Brand and Auchan Brand achieved sales of 966,000 and 228,000 units, respectively, an increase of 20% and 49% year-on-year, respectively; new energy vehicle sales exceeded 100,000 units for the first time, an increase of more than 200% year-on-year, and the sales scale of Auchan brand returned to 200,000 units. In addition, Changan Ford achieved sales of 305,000 vehicles in the whole year, an increase of 20.3% year-on-year, achieving "two consecutive increases" year-on-year.

Following the breakthrough in operating income and sales scale in 2021, Changan Automobile achieved operating income of 34.576 billion yuan in the first quarter of 2022, an increase of 7.96% year-on-year; and achieved a net profit attributable to the mother of 4.536 billion yuan, an increase of 431.45% year-on-year.

Referring to the sales volume in the first quarter of 2022, Changan Automobile Group sold 650,000 units in batches, an increase of 1.6% year-on-year, and Changan Chinese brand vehicles sold 529,000 units, an increase of 1.3% year-on-year. In contrast, in the first quarter of 2022, the year-on-year increase in sales of Changan Automobile's autonomous sector was not large, how to achieve efficiency improvement in the first quarter of this year?

Zhang Deyong, director, chief accountant and secretary of the board of directors of Changan Automobile, also explained several reasons at the 2021 annual performance briefing. "The first is the continuous optimization of the product structure. In the first quarter of this year, under the condition of tight resources, we took the initiative to adjust the product sales structure and tilted limited resources to high-value products. ”

Secondly, Zhang Deyong mentioned that Changan Automobile's sales scale of new energy vehicles continued to rise, reducing the cost of points to zero year-on-year. "In 2021, the points realized by Changan Automobile in the sale of new energy vehicles can not only cover the points of the autonomous sector in 2021, but also the positive points of wealth can cover the point gap of the joint venture sector."

In addition, Zhang Deyong also pointed out that in the first quarter of 2022, in the face of adverse effects such as raw material price increases and material shortages, Changan Automobile actively promoted cost reduction actions to reduce the impact of raw material price increases; and promoted the optimization of cost resources and cost saving actions, so that management expenses, financial expenses and other operating expenses were reduced year-on-year.

Optimize the layout of new energy

Since launching its third entrepreneurship - innovation and entrepreneurship plan in 2017, Changan Automobile has proposed to transform into an intelligent and low-carbon travel technology company.

At the Global Partner Conference held in mid-April, Changan Automobile released a new digital pure electric brand "Changan Deep Blue", plus the new high-end brand Avita that has been launched, to comprehensively lay out the new energy track.

On the one hand, Avita and Changan Deep Blue compete for the new energy track with the posture of "new force"; on the other hand, Changan Automobile will further optimize the brand strategy and positioning of Changan UNI, Changan Passenger Vehicle, Auchan and Kaicheng, and comprehensively transform to electrification - PHEV, HEV and REEV.

From the above brand planning, it is not difficult to see that Changan Automobile will come up with multiple brands to deal with changes in the automobile industry. However, with multiple brands in hand, how will Changan Automobile achieve the differentiation of its respective brands?

Zhu Huarong pointed out at the 2021 annual performance briefing, "According to the trend of electrification, intelligence and high-end presented by the industry, Changan Automobile develops Avita and Changan Deep Blue for different target markets and users respectively, to meet the needs of different user groups for electric vehicles and intelligent experience to achieve full coverage and complementarity." ”

In terms of product planning, 2022 is the year of Changan Automobile's new energy products. Changan Automobile revealed that the Avita brand will debut Avita 11 this year, and proposed to plan a total of 4 products by 2025. The Changan Deep Blue brand is also expected to debut C385 and C673 products this year, and a total of 5 products are planned by 2025.

In addition, in Changan Automobile's classic series, it is expected to launch CS75PLUS electrification products in the first half of 2023. Changan UNI will also expand the full spectrum to electrification products, and it is expected that by 2025, the number of electrified products will reach 10, with sales of more than 900,000 vehicles.

The reporter noted that in June 2021, Changan Automobile officially released the Blue Whale iDD hybrid system. The system is called "exploring the best power solution between fuel and pure electricity" by Changan Automobile, and is a global hybrid solution that meets the needs of users in "full speed domain, full field domain, full temperature domain and full time domain".

In March 2022, the Blue Whale iDD hybrid system was officially installed on the UNI-K iDD model. According to Changan Automobile, the Blue Whale iDD hybrid system can be applied to all models of class A to C on a platform, and after UNI-K, hybrid technology will be equipped with unIV, second-generation CS75PLUS and other models.

In response to the creation and operation of the above-mentioned brands, Zhu Huarong also said, "We share common resources when building these brands. For example, after the brand reform of Changan Auchan, product definition, user research, and market brand development have been really carried out, while the research and development and manufacturing of basic technologies are provided by the headquarters platform. In the future, Changan Deep Blue and Avita will also adopt the same approach to accelerate the transformation of Changan Automobile and comprehensively enhance the scale, effect and value of the brand. ”