BAIC Blue Valley has a four-year loss of 22.6 billion yuan, and Jihu will have a debt of 9.6 billion yuan in 2023, which is 4.6 times the asset. Under the situation of continuous losses and insolvency, BAIC is seeking a new way out in further cooperation with Huawei, while Jihu has been slow to roll out the scale of sales.
On April 27, BAIC Blue Valley released its 2023 annual report, which showed that the company achieved operating income of 14.319 billion yuan, a year-on-year increase of 50.50%; net profit was -5.4 billion yuan, a year-on-year increase of 1.19%; The net profit after deduction was -6.018 billion yuan, a year-on-year decrease of 3.08%.
In the view of BAIC Blue Valley, the company is still in the stage of large investment, and the sales volume of its products is still in a period of rapid increase, and the scale effect has not yet appeared, resulting in a high product cost, which is the main reason for its continuous losses.
This may be true, but capital and the market will not buy into the rationale behind the company. Especially at present, the transformation of other traditional independent car companies has taken a sharp turn.
In the ranking of car companies with narrow wholesale sales in April released by the China Passenger Car Association, the top 10 include BYD, Chery, Geely, Changan and Great Wall. In contrast, BAIC Blue Valley, which "got up early" in the field of new energy, has lagged behind too much.
BAIC Blue Valley, get up early in the morning to catch the evening set
In 2009, BAIC Group initiated and controlled the establishment of BAIC Blue Valley, becoming the first new energy vehicle enterprise in mainland China to operate independently, obtain new energy vehicle production qualifications, carry out mixed ownership reform, and pilot the employee stock ownership reform of state-owned enterprises.
BAIC Blue Valley, which entered the market early, quickly got out of the circle with its cost-effective advantages and gained a firm foothold in the pure electric market segments such as taxis and online car-hailing.
In 2018, BAIC Blue Valley sold 158,000 new energy vehicles, ranking first in domestic new energy vehicle sales for seven consecutive years. In September of the same year, BAIC Blue Valley became the "first stock of new energy vehicles" in China through major asset restructuring.
However, after the listing, the sales of new energy from the B-end have gradually become a constraint for BAIC Blue Valley. In 2019, the company sold 150,600 new energy vehicles, a year-on-year decrease of 4.69%. In 2020, with the gradual saturation of online car-hailing demand and the decline of new energy subsidies, BAIC Blue Valley's new energy sales plummeted, with annual sales of only 25,914 units, down 82.79% year-on-year.
At the same time, new car-making forces such as "Wei Xiaoli" gradually mass-produced, BYD and other car companies also began to enter the game, and China's new energy vehicles entered a stage of rapid development.
In 2021, the production and sales of new energy vehicles in mainland China will be 3.545 million and 3.521 million respectively, an increase of nearly 1.6 times year-on-year, and the market share will reach 13.4%. The performance of BAIC Blue Valley is not satisfactory, with annual sales of 26,127 vehicles in 2021, a slight increase of 0.82% year-on-year.
In order to reverse the decline, in 2022, BAIC Blue Valley proposed a sales target of 100,000 units, of which the annual sales target of Jihu is 40,000 units, and the annual sales target of the BEIJING brand is 60,000 units. But in the end, BAIC Blue Valley's automobile sales in 2022 will reach 50,200 units, only about 50% of the overall target has been achieved; The sales volume of Jihu Automobile was 11,900 units, a year-on-year increase of 146%, and it did not reach the annual sales target of 40,000 units.
The company's poor sales volume also made BAIC Blue Valley's performance continue to fall into a trough.
According to the data, from 2020 to 2022, BAIC Blue Valley's revenue will be 5.272 billion yuan, 8.697 billion yuan and 9.514 billion yuan respectively, a year-on-year increase of -77.65%, 64.95% and 9.40% respectively.
In terms of losses, the net profit from 2020 to 2022 will be -6.482 billion yuan, -5.244 billion yuan and -5.465 billion yuan respectively, an increase of -7145.36%, 19.11% and -4.22% year-on-year respectively; The net profit after deduction was -6.646 billion yuan, -5.544 billion yuan and -5.838 billion yuan respectively, an increase of -660.79%, 16.59% and -5.31% year-on-year respectively.
Although the range of losses has been narrowing, it has never been able to get out of the state of losses, including in 2023.
For 2023, BAIC Blue Valley did not set a specific sales target, and achieved annual sales of 92,172 vehicles, a year-on-year increase of 83.69%, and finally achieved substantial growth. Among them, the cumulative sales of Jihu Motors in 2023 will reach 30,000 units, a year-on-year increase of 138%.
The main data of BAIC Blue Valley's 2023 financial report
Although sales volume increased sharply, the loss continued unabated. According to the data, last year, BAIC Blue Valley's net profit was -5.4 billion yuan, a year-on-year increase of 1.19%; The net profit after deduction was -6.018 billion yuan, a year-on-year decrease of 3.08%.
In total, in the four years from 2020 to 2023, BAIC Blue Valley has a cumulative net profit loss of about 22.6 billion yuan, and a cumulative loss of about 24 billion yuan after deducting non-net profit.
During the loss period, in order to support its finances, BAIC Blue Valley carried out two private placements in 2021 and 2023 respectively, raising funds of 5.45 billion yuan and 6.03 billion yuan respectively, totaling 11.48 billion yuan.
However, this has not fundamentally changed the status quo of its losses. According to the financial report, from the end of 2020 to the end of 2023, the asset-liability ratio of BAIC Blue Valley will reach 73.91%, 70.10%, 79.89% and 77.41% respectively. By the end of the first quarter of 2024, the company's debt-to-asset ratio will still reach 79.87%. Obviously, fundraising is not a long-term solution", and if you want to return to profitability, you still need to rely on the scale of sales.
Insolvent, Jihu lives up to a good hand
When it comes to expectations for sales, I have to mention BAIC Jihu.
BAIC Blue Valley mainly has two major brands: Jihu and Beijing. Among them, as a high-end pure electric brand established by BAIC Blue Valley in 2016, Jihu Automobile has always been pinned on high hopes. Its time to enter the new energy market is not later than "Wei Xiaoli", however, it failed to lead the trend of domestic new energy vehicles.
As early as September 2017, ARCFOX Motors signed a strategic cooperation agreement with Huawei to carry out comprehensive cooperation in technology research and development, product innovation, and intelligent transformation, making it the earliest car company to cooperate with Huawei. But when it comes to sales, the effect is not obvious, which can be seen from the annual sales of only 10,000-30,000 units in the past two years.
In May 2022, the new HI version of the ARCFOX Alpha S, the first ARCFOX Alpha S equipped with Huawei's HI full-stack intelligent vehicle solution, was officially launched and delivered in July. At that time, BAIC Blue Valley had high hopes for this new car with Huawei's HI model, "Our sales target for this car is to sell it out of stock."
However, in 2022, the sales volume of Jihu Motors will be 11,900 units, and the sales target of 40,000 units will only be nearly 30%.
Last year, ARCFOX accelerated the launch of new products, and a number of models such as ARCFOX Alpha S Advanced Edition, ARCFOX Alpha S/T Forest Edition, ARCFOX Koala and ARCFOX Alpha T5 were intensively launched. In 2023, JiHu will sell 30,016 new vehicles, a year-on-year increase of 138%. Although the year-on-year growth has risen sharply, in reality, the annual sales of 30,000 units of Jihu are only equivalent to the current monthly sales of some new energy brands.
What's even more worrying is that Jihu Motors is still in the red and insolvent.
According to the financial report, in 2021, the total assets of Jihu Motors will reach 1.001 billion yuan, the net assets will reach -1.425 billion yuan, and the net profit will reach 1.425 billion yuan, in 2022, the total assets of Jihu Motors will reach 2.985 billion yuan, the net assets will reach -4.173 billion yuan, and the net profit loss will reach 2.75 billion yuan, and in 2023, the total assets of Jihu Motors will reach 2.099 billion yuan, but the net assets will reach -7.52 billion yuan, and the net profit loss will reach 3.347 billion yuan.
Based on its assets in 2023, ARCFOX Motors' liabilities are as high as RMB9.619 billion, which is about 4.6 times of its total assets.
Regarding the continuous losses of Jihu and even BAIC Blue Valley, the market is worried that although BAIC Blue Valley is a pioneer in the new energy vehicle market, the continuous losses and insolvency make its future development full of uncertainty.
Can you turn over by relying on Huawei to find a way out?
In the first quarter of 2024, involution is still the main theme, and the automotive industry is not having a good time. In the face of fierce market competition, the performance of BAIC Blue Valley, which has not yet recovered, also fluctuated in the first quarter.
The main data of BAIC Blue Valley's financial report for the first quarter of 2024
According to the financial report, BAIC Blue Valley's operating income in the first quarter was 1.504 billion yuan, a year-on-year decrease of 39.75%. Profitability has not improved in the first quarter of 2024, with a net loss of 1.016 billion yuan, a year-on-year decrease of 13.92%; The non-net profit loss was 1.032 billion yuan, a year-on-year increase of 2.07%.
Fluctuations in performance may be directly related to the decline in sales volumes. In the first quarter of 2024, BAIC Blue Valley sold 10,100 vehicles, a year-on-year decrease of 33.03%.
It is worth mentioning that the sales volume is not good, and the capacity utilization rate of BAIC Blue Valley is also low. According to the 2023 annual report, Beijing New Energy has no production, while Magna's capacity utilization rate is 35.53%.
In order to improve capacity utilization, BAIC Blue Valley began to reduce production capacity and sell assets. On March 14, 2023, Changzhou New Energy signed an asset transfer agreement to transfer its fixed assets and other related assets at a price of 567 million yuan (tax included), and the company's production capacity has been cancelled in April 2023.
Of course, BAIC Blue Valley's sense of crisis is full. Jihu, which adopts Huawei's HI model, has been unable to roll out the scale of sales for a long time, and BAIC Blue Valley has chosen another path. In August 2023, BAIC Blue Valley announced that it would invest 1.61 billion yuan to build a high-end smart ecological factory, forming an annual production capacity of 50,000 high-end new energy vehicles, mainly producing smart models in cooperation with Huawei.
At this year's Beijing International Auto Show, the ARCFOX Alpha S advanced version PRO created by BAIC Blue Valley and Huawei was launched, and at the same time, the first intelligent mode model Xiangjie S9 jointly created by the two was also officially unveiled, which is expected to be launched in June this year.
Different from Huawei's HI model, Xiangjie S9 is deeply involved in product design and subsequent sales, that is, Huawei's intelligent selection mode.
The information disclosed by BAIC Blue Valley is that for the cooperation model of Xiangjie products, BAIC will mainly do R&D and production, and Huawei's Hongmeng Zhixing channel will be responsible for sales, and will not appear in the sales channel of Jihu.
Zhao Ji, secretary of the board of directors of BAIC Blue Valley, also bluntly said, "In the smart selection mode, the marketing rhythm of the product and the terminal market are all handled by the Huawei team, and the biggest advantage of this model is to use Huawei's high voice to enhance the attention of the product." ”
Obviously, it is easy to see that the volume and sales brought by the cooperation between Huawei and Cialis made BAIC Blue Valley, which was at a low point in transformation, decide to gamble again. Even if this time it may be about "losing the soul".
From the perspective of stock price, on March 13, the website of the Ministry of Industry and Information Technology released pictures of the new car of Xiangjie S9, and BAIC Blue Valley closed at 7.73 yuan per share on the same day, with a turnover of 4.197 billion yuan. The total market value is 43.083 billion yuan, raising the market value by more than 4 billion yuan. This shows that Huawei's intelligent cooperation model is indeed not ordinary, and the effect is completely different from Huawei's HI model.
However, in the smart mode, in addition to the world, there are also Chery's Zhijie and JAC's Aojie, and it is still unknown whether BAIC's Xiangjie can successfully replicate the success of Cialis. Coupled with the treacherous competition in the new energy industry, next, how to reverse the loss situation and reduce the debt level will still be the main task of BAIC Blue Valley this year.