Half Year Examination Of Listed Auto Companies

The structural adjustment of China's automobile market and the impact of the new crown pneumonia epidemic in the first half of the year have brought a huge impact on China's automobile industry. Since August, the financial reports of domestic listed auto companies in the first half of the year have been published one after another. Behind the cold figures is the Jedi survival of domestic listed auto companies.

According to the statistics of 21st century economic report, 10 of the 15 listed passenger car companies that have published semi annual reports on A-share and Hong Kong stocks have declined. BAIC motor, which has not yet released its first half financial report, also issued a profit warning as early as August 14. It is expected that the net profit in the first half of the year will drop by 65%.

The five companies with net profit growth include BYD, Chang'an, which has achieved a significant year-on-year turnaround due to non recurring profit and loss, Brilliance China, which is backed by the joint venture BMW Brilliance, and St Haima, which has reduced losses, and * ST Xiali, which has turned losses due to non recurring profit and loss items.

Among the 12 commercial vehicle listed companies, except Dongfeng Motor, Jiangling Automobile, FAW Jiefang and SINOTRUK, which are mainly composed of medium and heavy trucks and commercial vehicles, the profits of the other 8 companies have declined, especially Jinlong, Yutong, Zhongtong, Yaxing and St Ankai, whose main business is bus production.

From the financial reports of listed companies, the profitability of SAIC Group, Geely Automobile, Brilliance China with high profit and luxury brands, and marginal independent brands such as Lifan and Zhongtai, whose living space is squeezed, are all weakening.

Of course, for the first half of the decline in the performance of car companies, the industry has long been expected. In the view of industry insiders, the overall sales decline caused by the new crown pneumonia epidemic is the direct factor affecting profits.

As a matter of fact, it is not only automobile enterprises that are affected by the epidemic, but the whole industrial chain is in "deep water". In the upstream of the industrial chain, due to the reduction of orders, the revenue and profits of many auto parts enterprises have declined; in the downstream of the industrial chain, the demand for terminal market has weakened, the price of new cars has gone upside down, the gross profit has decreased, and struggling and suffering, which has become the most true portrayal of all automobile enterprises and dealers in the first half of the year.

Profits and revenue both declined

It is an indisputable fact that the profits of most enterprises have declined. What is more serious is that the revenues and profits of several well-known automobile enterprises such as SAIC Group, Geely Automobile, Great Wall Motor, GAC group and Jianghuai Automobile Co., Ltd. both declined in the first half of the year.

According to the data of tonghuashun Financial Research Center, as of August 30, the automobile industry has disclosed that the average growth rate of operating income of individual stocks in the half year report is - 10.14%, and the average growth rate of net profit is - 27.21%.

Among them, SAIC Group's first half revenue was 283.74 billion yuan, a year-on-year decrease of 24.6%; net profit of 8.39 billion yuan, a sharp drop of 39%. In the first half of the year, Geely's operating revenue was 36.82 billion yuan, down 23% year-on-year, and its net profit was 2.32 billion yuan, down 42.67% year-on-year. Great Wall Motor's operating revenue in the first half of the year was 35.929 billion yuan, 41.377 billion yuan in the same period of last year, a year-on-year decrease of 10.88%; the net profit decreased by about 400 million yuan compared with last year, only 1.146 billion yuan, a year-on-year decrease of 24.5%. Due to the decline in the production and sales of new energy vehicles in the first half of the year, BAIC Blue Valley made a net loss of 1.863 billion yuan in the first half of the year, and its profit dropped by 2815% year on year.

Even Chang'an Automobile, which made a substantial profit and loss in the first half of the year, actually lost 2.617 billion yuan after deducting the non recurring profit and loss, with a year-on-year increase of 10.13%, and the loss margin further increased.

From the financial reports of many enterprises, we can clearly see that the decline of net profit is far more than that of revenue. In the first quarter of this year, among the 14 industry representative vehicle enterprises focused on by Dongfang securities, 11 enterprises experienced a year-on-year decline in gross profit rate.

And behind this is the "forced" sale of self-made brand cars, in exchange for the price of quantity insurance market.

According to the data of China Automobile Industry Association, under the dual influence of automobile industry transformation and epidemic situation, the market share of self owned brand passenger cars reached its lowest point since 2009 in June. In the first half of this year, the sales volume of self owned brand passenger cars decreased by 29% year on year, and the market share fell to 36.3%.

Therefore, whether it is live selling cars or new energy vehicles going to the countryside, stimulating sales has become a "common topic" for automobile enterprises in the first half of the year.

However, judging from the sales data in the first half of the year, the cumulative sales volume of most automobile enterprises is less than half of the annual target, and the pressure will be greater in the second half of the year.

Among them, Geely achieved 530000 vehicles, down 19% year-on-year, only 38% of the annual sales target of 1.41 million vehicles; SAIC Group achieved a total sales volume of 2.05 million vehicles, a year-on-year decrease of 30.24%, and 34.15% of the annual sales target of 6 million vehicles in the first half of the year; and Great Wall Motors achieved a cumulative sales volume of 395000 vehicles in the first half of the year, a year-on-year decrease of 19.95% and only achieved 38.74% of the annual sales target of 1.02 million vehicles 。

However, according to the latest sales data of auto enterprises released by the China Travel Federation, the monthly sales volume of nearly 40 auto companies has not reached 1000 vehicles, and the monthly sales volume of 15 auto enterprises such as Zhongtai automobile is "0".

This also means that in the fierce market competition, if the sales volume does not improve, it is difficult for these brands to regain the "hematopoietic" ability.

"There are 143 auto brands in the Chinese market, more than any other market in the world, so the survival of the fittest will accelerate in the future." On August 14, at the 2020 China automobile forum, Zhu Huarong, chairman of Changan Automobile, said publicly.

As early as three years ago, Zhu Huarong predicted that only five independent brands could survive in the future.

Under pressure of performance, R & D expenses are falling instead of rising

As a key indicator to measure the core competitiveness of automobile enterprises, R & D investment is not only the embodiment of the hard power of automobile enterprises, but also directly determines whether the enterprises can pass the "new four modernizations" test and occupy a favorable position in the future track ahead of time.

However, among the listed auto companies that have disclosed the first half of 2020 financial reports sorted out by 21st century economic report reporters, only GAC, Geely, great wall, BYD and BAIC Blue Valley increased their R & D expenses year on year. Among them, the fastest growth rate of R & D expenditure is great wall, with R & D expenditure of 1.22 billion in the first half of the year, with a year-on-year increase of 33%; SAIC Group has the highest R & D investment in the first half of the year, with R & D expenditure of 5.843 billion, a slight decrease of 2% over the same period of last year; while Brilliance China, whose net profit increased by more than 25% in the first half of the year, only spent 52 million.

In the critical period of automobile industry's transformation towards "new four modernizations", the sum of R & D expenses of Chinese listed automobile enterprises is even less than that of a multinational company.

"There seems to be a lot of talk about a v-rebound right now. By stopping projects, a company may be able to turn around its performance, and it seems that such a practice is often praised. But I don't think it's right. " Toyota President Akio Toyoda said at the performance conference that it is short-sighted for enterprises to stop advanced research or other projects in the short term to save money.

Although the overall market is facing many challenges, Toyota group predicts that its R & D investment in fiscal year 2020 will reach about US $10.3 billion, which is almost the same as that in fiscal year 2019; BMW Group's R & D expenditure in the first half of this year totaled EUR 2.734 billion, almost equal to the same period last year; the R & D cost of Volkswagen Group in the first quarter of this year alone was as high as 3.6 billion euro, with a year-on-year increase of 2.3 billion .3%。