Special topic: research Institute of Sina Finance listed companies
If you want to speculate in the stock market, you can see the research report of Jin Kirin analysts.LatenightpokerAuthoritative, professional, timely, comprehensive, to help you tap the potential theme opportunities!
Product: research Institute of Sina Finance listed Company
Author: Hao
In May, all A-share listed passenger car companies' quarterly reports were all disclosed. Half of the car companies' revenue declined compared with the same period last year, and the net profit of more than half of the car companies declined, which is becoming increasingly fierce.LatenightpokerThe price war has accelerated the polarization of the industry. Among them, Changan Automobile in the case of basically flat revenue, net profit fell by more than 80%, the growth rate ranked the last.
In fact, in addition to the high base impact of investment income brought about by accounting treatment in the same period in 2022, the industry price war has hit Changan Automobile particularly hard. The main volume models of class 100000, such as CS75 PLUS, Yitou PLUS, UNI-V, etc., have been directly affected by the price reduction of models such as BYD Qin, resulting in a sharp drop in bicycle prices, bicycle profits have even begun to turn negative, and more importantly, the gap with BYD's profitability is still further widening.
In addition, Changan's new energy transformation also seems to be suffering from bottlenecks, with sales of its new power brands Deep Blue and Avita halving month-on-month in February. The effect of successive price cuts lasted only a month, and sales growth stagnated again in April.
It is worth mentioning that in 2023, Deep Blue lost 3 billion and Avita lost 3.7 billion, and the company's debt ratio is also at its highest level in nearly eight years. It is difficult to sustain the price in exchange for volume. Cooperation with Huawei may be the only hope of a turnaround in Changan.
The impact of price war on bicycle profits turns into negative products and the problem of weak product power is highlighted.
According to the latest financial report, Changan car sales in the first quarter of this year were 69.Latenightpoker.2000 vehicles, an increase of 13 percent over the same period last year.Latenightpoker.87%, realizing operating income of 37.023 billion yuan, an increase of 7.14% over the same period last year, and net profit of 1.158 billion yuan, down 83.39% from the same period last year, deducting 112 million yuan of non-return net profit, down 91.77% from the same period last year.
As the performance was lower than market expectations, the quarterly report revealed that the next day, the share price of Changan Automobile fell by the limit.
In the case of basically stable revenue and sales, Changan Automobile profits fell sharply, in addition to the same period in 2022, the merger and acquisition of Deep Blue Automobile confirmed the high base impact of 5.021 billion yuan in investment income, the decline in profitability is another important factor.
Data show that in the first quarter of this year, the gross profit margin and net profit margin of Changan Automobile were 14.4% and 3.1% respectively, down 4.2% and 17.0% respectively from the same period last year; at the same time, the expense rate during the period was 12.5%, an increase of 1.5% over the same period last year.
In addition, according to brokerage estimates, Changan Automobile's deduction of non-net profit after deducting investment income from joint ventures in the first quarter was 37 million yuan, compared with 1.544 billion yuan in the same period last year and 2.569 billion yuan in the fourth quarter of last year, a sharp decline compared with the same period last year.
In fact, since the first quarter of this year, driven by price cuts by passenger car companies led by BYD, the price war in the industry has intensified. The main models of Changan brands, such as CS75 PLUS, UNI-V and Escape PLUS, which are priced at about 100000 yuan, suffered a huge impact, so they had no choice but to follow the price reduction in order to cope with a new round of price war in the industry after the Spring Festival.
Due to increasing terminal discounts, the average price of self-branded bikes of Changan Automobile (excluding Avita) was 64100 yuan in the first quarter, down 4.9% and 19.4% respectively compared with the same period last year and month-on-month. The net profit of independent brand bikes (deducting non-caliber) was-63 yuan, down 3000 yuan from the same period last year and 4700 yuan from the previous year.
What is more worrying is that while Changan's bicycle profits turned negative in the first quarter, the gross profit margin gap between the company and BYD is still widening.
Weak product power and profitability will undoubtedly further restrict the room for further price reduction of Changan Automobile, making Changan in a more passive disadvantage in the increasingly fierce industry price war.
Deep Blue and Avita lose 6.7 billion per year in exchange for price and quantity may not be sustainable.
While the Changan brand has been severely affected by the price war, the new power brands Deep Blue and Avita under Changan Automobile are also facing a difficult situation.
Affected by the intensification of the price war and the superimposed Lunar New year holiday, sales of Deep Blue and Avita were 9994 and 2457 respectively in February, down 41 per cent and 65 per cent respectively from the previous month, exceeding the level of the industry in the same period.
At the same time as sales of Deep Blue and Avita plummeted, the two brands started price reduction promotions one after another.
February 13, Deep Blue Automobile official announced that the price of the whole series of Deep Blue S7 will be reduced by 10, 000 yuan. After the reduction, the price range of the pure electric version of Deep Blue S7 will be reduced to 16. 99-192900 yuan.
On February 20, Deep Blue announced the official launch of its new pure electric version of SL03, with a total of three models with a price range of 156900 yuan to 173900 yuan, a drop of 27000 yuan compared with the original pure electric version.
On February 28th, Changan Deep Blue Automobile once again announced the launch of SL03/S7 Glory Edition, with a time-limited cash discount of 10000 yuan. After the discount, the Honor Edition of Deep Blue SL03 starts at 139900 yuan, and the Honor Edition of Deep Blue S7 starts at 149900 yuan.
On March 12, the Avita 11-mile Smart driver went on sale, starting at 250000 yuan. In addition to introducing time-limited car purchase prices, you can also enjoy financial car purchase rates as low as 2.4 per cent and a replacement subsidy of 6000 yuan.
According to the official website of Avita Technology, the upgraded Avita 11-Hong mask models were sold at a price range of 300000 yuan to 390000 yuan. In other words, with the launch of the smart car model, the starting price of the Avita 11 dropped sharply from 300000 yuan to 250000 yuan.
However, even with successive price cuts, the rebound in sales lasted only a month. In April this year, deep blue car sales of 12744, down again from March; Avita sales of 5247, month-on-month increase of less than 5%, the monthly sales of the two brands are also significantly "down" compared with the pre-Spring Festival.
It is worth noting that in 2023, Deep Blue lost about 3 billion yuan and Avita lost about 3.7 billion. At the same time, Changan Automobile's asset-liability ratio reached 60.73%, the highest in nearly eight years, and remained high at more than 60% in the first quarter of this year. In view of this, the room for further price-for-quantity for Deep Blue and Avita seems very limited.
After the stock price fell by the limit, Changan Motor closed on the first trading day after the May Day holiday and issued a progress announcement on the Investment Cooperation Memorandum, saying that "the investment cooperation project between the company and Huawei is actively under way. According to the latest project progress, the final transaction document is expected to be signed no later than August 31, 2024."
However, the day after the announcement, Changan's share price fell more than 2% against the trend. The market seems to have a lot of doubts about whether partnering with Huawei can help Changan turn around against the wind.