On March 30, FAW Jiefang released its 2023 annual report. In 2023, FAW Jiefang will achieve revenue of 63.905 billion yuan, a year-on-year increase of 66.71%, and a net profit attributable to the parent company of 763 million yuan, a year-on-year increase of 107.66%.
The cyclical characteristics of the heavy truck industry are significant, and the recovery in 2023 is only the beginning of a new cycle, and the industry prosperity is expected to further rebound in the next 2-3 years.
Leading the recovery of the heavy truck industry
FAW Jiefang's net profit increased by 107.66% year-on-year
In 2023, driven by factors such as the recovery of the transportation scene and the steady improvement of the domestic economy, the heavy truck industry will usher in a recovery. According to the statistics of the China Association of Automobile Manufacturers, in 2023, the mainland heavy-duty truck market will sell a total of 911,000 units, a year-on-year increase of 35.6% and a net increase of 237,000 units year-on-year.
In the context of the recovery of the heavy truck industry, FAW Jiefang, as the industry leader, has achieved a strong rebound in sales and performance.
In terms of sales, in 2023, FAW Jiefang will achieve vehicle sales of 241,700 units, a year-on-year increase of 42.11%, of which the sales volume of heavy trucks will be 184,400 units, a year-on-year increase of 46.84%, and the sales growth rate will lead the industry by 11 percentage points.
Among them, FAW Jiefang's sales performance in natural gas heavy trucks and overseas exports is particularly eye-catching. In 2023, FAW Jiefang will sell 51,000 natural gas heavy trucks, with a market share of 33.6%, ranking first in the industry, while in terms of overseas business, FAW Jiefang will continue its high growth trend, with overseas sales reaching 45,000 units in 2023, an increase of more than 60% for three consecutive years, achieving "continuous growth". Specifically, in terms of China VI products, the company launched nearly 140 new products, accounting for more than 60% of the sales volume of new products, and the product competitiveness was greatly improved; in terms of new energy products, the company comprehensively switched to the new architecture (cab, motor, electronic control and other upgrades) to build product differentiation competitiveness in the "three low and one high" aspects, and further reduced costs, weight and power consumption, and achieved annual sales of 7,200 new energy products, a year-on-year increase of 164.5%; The L2 product test and operation, with a cumulative operating mileage of 39,000 kilometers, and the completion of the port ICV L4 product wire-controlled commissioning, the full coverage of expressways and trunk roads in sanitation operation scenarios, and the cumulative operating mileage of 160,000 kilometers, etc., continue to accelerate the implementation of intelligent network products.
Based on sales performance and performance, FAW Jiefang's core financial data such as revenue, net profit, and cash flow from operating activities have been fully restored.
In 2023, FAW Jiefang achieved operating income of 63.905 billion yuan, an increase of 66.71% year-on-year, net profit attributable to the parent company of 763 million yuan, an increase of 107.66% year-on-year, and net cash flow from operating activities of 4.202 billion yuan, a year-on-year increase of 181.82%.
At the same time, FAW Jiefang adheres to the idea of high-quality development and promotes the further optimization of the company's expenses. In 2023, the company's sales expense ratio will be 2.51%, down 0.76 percentage points year-on-year, and the administrative expense ratio will be 3.02%, down 2.3 percentage points year-on-year.
According to the financial report, in 2023, FAW Jiefang plans to distribute a cash dividend of 1.5 yuan (tax included) to all shareholders for every 10 shares, with a dividend payout ratio of 91.15%.
"Time, place, people"
FAW Jiefang ushered in a good opportunity for development
If the cyclical recovery of the heavy truck industry is regarded as the "natural time" for the rebound of FAW Jiefang's performance, then the policy support received by the heavy truck industry and the advantages of FAW Jiefang's transformation in the new four modernizations can be regarded as "geographical advantages".
According to Xinhua News Agency, the State Council has reviewed and approved the "Action Plan for Promoting Large-scale Equipment Renewal and Trade-in of Consumer Goods" in March this year. The industry generally believes that the implementation of this policy will help boost the demand for replacement in the commercial vehicle market and drive commercial vehicle sales.
The short-term "geographical advantage" lies in policy support, while the long-term "geographical advantage" depends on the prospect of FAW Jiefang's transformation of the new four modernizations.
In the field of new energy transformation, FAW Jiefang has built a first-mover advantage. In 2023, FAW Jiefang will continue to promote the implementation of the "15333" new energy strategy, while continuously breaking through core technologies and upgrading new energy products, it will also improve the "circle of friends" of new energy and further consolidate its leading position in new energy transformation.
At present, FAW Jiefang has mastered 39 core technologies in the field of new energy, and has completed the technical development of independent batteries and the market launch of light truck electric drive axle technology. In 2023, the ammonia-hydrogen fusion direct-injection zero-carbon internal combustion engine developed by FAW Jiefang will be successfully ignited, and new energy 2.0 products will be launched. According to the financial report, in 2023, the sales volume of FAW Jiefang's new energy products will be 7,200 units, a year-on-year increase of 164%, a record high.
The industry expects that the sales of new energy heavy trucks will increase to about 35,000 in 2023, more than 50,000 in 2024, about 100,000 in 2025, and about 600,000 in 2030. FAW Jiefang is expected to take the lead in achieving a breakthrough in sales and opening up growth space by virtue of its first-mover advantage in new energy transformation.
In the field of intelligent connected vehicles, in 2023, FAW Jiefang will officially launch the brand of intelligent power domain, release the world's first intelligent power domain product GD300, and launch the "Xingqi" intelligent cockpit, leading the new direction of intelligent experience of commercial vehicles, including high-speed L4 automatic driving, low-latency remote driving, predictive intelligent diagnosis and repair, and more than 20 key core technologies have made major breakthroughs.
In addition, in terms of aftermarket business, in 2023, FAW Jiefang will focus on the "Ecological Four Musketeers" products and value-added services to guide users to pay attention to TCO operating costs. Among them, there are more than 20,000 fuel card service vehicles nationwide, saving customers 30 million yuan in fuel costs, the fleet management system covers more than 12,000 vehicles throughout the year, and the annual operation of the safety butler insurance business exceeds 2,500 vehicles, reducing the accident rate by 30%, making a positive contribution to the win-win situation of the industry. The aftermarket service business is also considered to be the core profit growth point of the medium and heavy truck industry in the future.
In addition to the right time and location, FAW Jiefang has also ushered in the update of the senior management team, the company's chairman Wu Bilei, general manager Li Sheng and other "post-70s" cadres have officially taken the helm of FAW Jiefang, and the new senior executives will inject new vitality into the company's development.
It is reported that most of the new leadership team of FAW Jiefang is a "veteran" of the truck industry with a deep technical background, and most of them have been working in the FAW system for decades, are familiar with the company's various business departments, and can deeply analyze and solve the problems encountered by FAW Jiefang in the development, which also makes the market have high expectations for the future development of FAW Jiefang.
The industry expects that the recovery momentum of the heavy truck market will continue in 2024. According to the research report of Changjiang Securities, in 2024, the "National IV" heavy truck will enter the natural elimination period, superimposed by policy stimulus such as trade-in, the demand for natural gas heavy truck replacement is expected to exceed expectations, and the sales volume of the heavy truck industry is expected to reach 1 million in 2024.
Under the strong recovery expectation of the heavy truck industry, FAW Jiefang, which occupies the "time, place, and people", is also worth looking forward to.