Today to compare and interpret the bus companies, in recent years, their voice is smaller, may be related to the rise of trains, subways, etc., although the short and medium distance still have to use a large number of buses, but may also bring trouble to their growth.
Without further ado, let's start comparing, first looking at a bubble chart:
The bubbles of the two companies in the first three quarters of 2021 are not the largest; they are also on the left, especially the Golden Dragon is already on the far left, that is, the net profit performance is not the best; the growth rate is not bad, all on the upper side of the chart, but looking at the two larger negative growth ratios in 2020, we can only say that this is only the impact of last year's low base. With this chart, it is directly said that the operation of the two companies has encountered difficulties, at least in terms of revenue growth, which should be no problem.
Yutong Bus reached its peak revenue of 20.9 billion yuan in the first three quarters of 2019, plummeted in 2020, and is now recovering from about 70% of its peak. Golden Dragon Automobile reached a peak of 12.7 billion yuan in the first three quarters of 2018 earlier, and then fell for two consecutive years, although the growth rate in the first three quarters of 2021 reached 16.2%, but the revenue scale was only nearly 80% of the peak in 2018.
Yutong Bus has always been larger than the scale of Golden Dragon Automobile, in the first three quarters of 2017, the revenue was 1.85 times that of Golden Dragon Automobile, in recent years, after two major changes, in the first three quarters of 2021, Yutong was 1.58 times that of Golden Dragon, and the lead also declined somewhat.
Yutong Bus in the performance of net profit is obviously the existence of the crushing level, especially in the period of 2017-2019, are more than 1 billion, and even have the momentum of chasing 2 billion, the highest in the first three quarters of 2019, reached 17 times of Golden Dragon Automobile, but in 2020 began to fall to only a fraction of it, and Golden Dragon Automobile began to turn into a loss in the same year.
Of course, this is related to the continuous decline in the gross profit of the two companies for five years, Yutong Bus is still relatively better, down 8 percentage points, and now there is still a gross profit margin of 17.43%, Golden Dragon Automobile has fallen by 10 percentage points, and the gross profit margin has dropped to less than 10%. The decline in gross profit and the impact of inertia on costs and expenses have not completely declined synchronously, which is an important reason for the decline in net profits of the two companies and even the loss of Golden Dragon Automobile.
All along, the return on net assets of Yutong Bus has also been higher, although the past two years have been very low, less than 1% in the first three quarters of 2020. But Golden Dragon Automobile was more polite, sensibly reduced to a negative number, and continued to let Yutong Bus lead.
Yutong Bus's research and development expenses and sales expenses are twice as high as those of Golden Dragon Automobile in absolute terms, but they only have an advantage of about 1 percentage point in terms of revenue ratio. The bus is still relatively mature, and the research and development expenditure of several hundred million may be enough.
The management cost of Yutong bus is also more than double, the financial cost is negative, that is to say, Yutong may not have any interest-bearing liabilities, on the contrary, there are 60 million deposits or financial income, of course, the financial cost of the Golden Dragon is only 30 million, the financial status of the two can be seen from here, and a relatively detailed comparison will be made later.
The domestic market bus tends to be saturated, increase the export line? Since we have all thought of it, the two giants of course will not be unexpected, in the third quarter of 2021 they have not released these detailed data, we will make a brief comparison with its 2020 annual report, Golden Dragon has 32% of its products in exports, Yutong also has 14% of its products exported. It may be necessary to return to the brilliant performance of the company in previous years, and both companies must find ways to do it in this regard.
Judging from the current ratio of 1.3 to 1.4 and the quick ratio of 1 to 1.1, the short-term solvency of both companies is very standard, and there is neither too much debt service risk nor too much idle assets. It is surprising that there has not been a high level of loans in most manufacturing industries.
Let's take a look at the comparison of the main balance sheet items of the two bus companies:
Both have more than 4 billion yuan of monetary funds, which is an important guarantee for their operation and debt repayment; Yutong has 1.8 billion, Golden Dragon has 2.4 billion trading financial assets, in the 2020 financial report, Golden Dragon announced that it is mainly composed of financial management, and Yutong has some derivative financial instruments, which are officially interpreted as hedging needs. As for whether there is a large-scale stock speculation like Yunnan Baiyao, from the existing data, it is not yet.
Yutong has 7 billion yuan, Golden Dragon has 5.2 billion yuan of "accounts receivable and notes receivable", and also has 10.7 billion yuan and 10.2 billion yuan of "bills payable and accounts payable" respectively, all of which say that the triangle debt of the automotive industry is very serious, which can be seen from these two bus companies, although they may not be as serious as the passenger car industry.
Yutong's fixed assets are 4.2 billion, and The Golden Dragon is only 1.7 billion, and the scale of Yutong is still much larger than that of the Golden Dragon. Yutong has 700 million projects under construction, but Jinlong has 1.9 billion, regardless of the industry downturn, both companies still want to continue to make the business bigger. Moreover, the Golden Dragon, which is lagging behind in scale, seems to have taken a bigger step.
Contract liabilities are equivalent to the previous advance receipts, that is, the deposit of customers who ordered vehicles, etc., Yutong has 2 billion yuan, Andulong only has 800 million yuan, that is to say, Yutong's revenue performance in the fourth quarter is still better than that of Golden Dragon, which is almost without doubt.
Yutong does have almost no interest-bearing liabilities (only 4 million), while Golden Dragon has non-current liabilities and short-term borrowings of 1.5 billion yuan and long-term borrowings of 3.4 billion yuan due within one year. Although the financial pressure of Golden Dragon is greater, it is not serious, and the scale of borrowing can only be regarded as slightly higher. Yutong's abandonment of financial leverage is also a relatively safe choice in the overall downward environment of the industry.
The net cash flow generated by Yutong Bus's operating activities is very stable, especially in the past three years, there have been stable positive inflows, only in 2018 and 2021 in net investment; dividends are not bad, reflected in the net cash flow of financing activities are hundreds of millions or even more than 1 billion.
The performance of Golden Dragon Automobile fluctuates more, and the net cash flow generated by operating activities is stable, but it is a net outflow during the epidemic in 2020, considering the tens of billions of bills payable and accounts payable, which is also normal, as long as it pays more to the difficult suppliers, this is negative. Four consecutive years of large-scale net investment, with relatively few dividends, and the ups and downs in net cash flow from financing activities are mainly caused by changes in borrowing and repayment.
Disclaimer: The above is a personal analysis and does not constitute investment advice to anyone!
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