On the evening of April 29, BYD released its results for the first quarter of 2024.
In the context of the price war, BYD's performance in 24Q1 still achieved a profit growth rate exceeding the revenue growth rate.
In addition, since BYD's price reduction promotion in the first quarter mainly drove the sales of low-end models in the Dynasty and Ocean series, the revenue and profit of a single car will inevitably decline, and whether the follow-up can return to the right track of growth depends on whether high-end brands can occupy a larger proportion in the sales structure.
In the first quarter of this year, BYD achieved operating income of 124.944 billion yuan, a year-on-year increase of 3.97% and a decrease of 30% month-on-month, a net profit attributable to the parent company of 4.57 billion yuan, a year-on-year increase of 10.62% and a month-on-month decrease of 47.3%, a non-net profit of 3.75 billion yuan, a year-on-year increase of 5.24% and a month-on-month decrease of 59%, and a gross profit margin of 4 percentage points year-on-year and a quarter-on-quarter increase of 0.66 percentage points to 21.88%.
Sales outpaced production, but profitability was slightly affected
In the first quarter of this year, BYD's new energy vehicle production and sales reached 612,000 and 626,300 respectively, a year-on-year increase of 8% and 13%, achieving sales exceeding production and reducing BYD's inventory pressure.
It can be seen that BYD's price reduction promotion strategy has indeed worked, but it has also had a slight impact on BYD's profitability. In the first quarter of this year, BYD's bicycle revenue and bicycle profit declined to varying degrees in the first quarter.
Among them, the revenue of bicycles was 141,000 yuan, a year-on-year decrease of 28,700 yuan and a month-on-month decrease of 9,500 yuan. However, the decline in bicycle profit was not large, at 6,300 yuan, a year-on-year decrease of 0.04 thousand yuan, and a month-on-month decrease of 2,400 yuan.
According to Wall Street Insight Research, there are several reasons for this:
First, BYD's implementation of price reduction promotions mainly drove the sales of low-end models in the Dynasty and Ocean series, and the overall operating income growth rate (3.97%) was much lower than the sales growth rate (13%), so the price of a single car declined.
Taking March as an example, the sales of the Dynasty and Ocean series reached 286,700 units, up 47% year-on-year and 151% month-on-month, much higher than the high-end brands Formula Leopard and Yangwang (up 54% and 44% month-on-month, respectively).
BYD's high-end brand sales have stabilized after a wave of rapid growth in the fourth quarter of last year. In the first quarter of this year, the sales volume of Denza, Equation Leopard and Yangwang brands were 31,000, 11,000 and 3,500 respectively, accounting for about 7% of the overall total.
Second, BYD's price reduction promotion targets are mainly plug-in hybrid models of about 100,000 yuan, and the same product, BYD's plug-in hybrid models are about 20,000 yuan cheaper than pure electric models, which also further lowers the price of single vehicles.
In the first quarter of this year, due to the price reduction and promotion, the sales and growth rate of BYD's plug-in hybrid models surpassed that of pure electric vehicles. Among them, the sales of pure electric models were 300,100 units, a year-on-year increase of 13%, and the sales of plug-in hybrid models were 324,300 units, a year-on-year increase of 15%.
Third, BYD's single-vehicle profits have declined much less than single-vehicle profits, mainly because of the decline in costs. The decline in the price of raw material lithium carbonate has reduced BYD's cost pressure to a certain extent. In the first quarter of this year, BYD's operating costs decreased by 1.1 billion yuan year-on-year and 44.2 billion yuan quarter-on-quarter to 97.6 billion yuan.
High-end and intelligence have become important labels this year, and expenses have begun to grow rapidly
After BYD clearly accelerated the research and development of high-end brand models and investment in the field of intelligent driving, this year's research and development and other expenses have also increased significantly.
BYD expects to launch seven high-end brand models in 2024, including the Denza 3 models, the Formula Leopard 8 and 3, and the Yangwang U7 and U9.
More high-priced models are expected to move the revenue center upward.
In addition, in order not to fall behind in the era of intelligent driving, BYD's intelligent driving system, the "Eye of the Gods" high-end intelligent driving assistance system, still needs to be continuously updated to shorten the distance between Tesla and Huawei, which are in the first echelon, and the related R&D investment is also increasing.
In the first quarter of '24, BYD's R&D investment reached 10.61 billion yuan, a year-on-year increase of 70.1%.
The opening of overseas markets has accelerated, and the proportion of exports has continued to increase
Strengthening the export of new energy vehicles has become a consensus among car companies, and BYD's overseas market development speed is significantly faster.
As of the end of the first quarter of this year, BYD's new energy models such as Yuan PLUS, ATTO3, Dolphin and Song PLUS EV have successfully entered more than 70 countries and regions on six continents, with a total of more than 250 overseas stores.
In terms of export growth, in the first quarter of this year, BYD's exports reached 99,000 units, surpassing Tesla for the first time to become the No. 1 domestic NEV exporter.
This export volume increased by 153% year-on-year, much higher than the 13% growth rate of domestic sales.
Overseas markets are expected to be the key to BYD's continued sales and profit growth. BYD has confirmed that it will build plants in Thailand (production capacity of 150,000 units, expected to start production in 2024), Brazil (production capacity of 150,000 units, expected to start production in 2024), Uzbekistan (total production capacity of 300,000 units, the first phase has already been started), Szeged (production capacity is expected to start production in 2025), and Mexico (production capacity of 150,000 units, site selection).
In summary, export acceleration, high-end and intelligence have become important labels for BYD this year, and are expected to become the key to BYD's continuous growth in automobile sales and profits in the future.
Source: Jianzhi Research Pro Author Wu You
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