Event Overview
The company released the 2023 semi-annual report: the total revenue of the company in 2023H1 was 326.56 billion yuan, + 3.3% year-on-year; the net profit attributable to the mother was 7.09 billion yuan, + 2.5% year-on-year; the net profit deducted from the mother was 5.67 billion yuan, -7.2% year-on-year.
Among them, 2023Q2 achieved a total revenue of 180.64 billion yuan, + 35.3% year-on-year, + 24.0% month-on-month; net profit attributable to the mother was 4.30 billion yuan, + 208.6% year-on-year, + 54.5% month-on-month; net profit not attributable to the mother was 3.51 billion yuan, + 203.5% year-on-year, + 62.1% month-on-month.
Analysis and judgment:
Demand improved, profit performance was outstanding
Affected by the improvement in demand, the company’s revenue increased significantly. The company achieved total revenue of 180.64 billion yuan in 2023Q2, + 35.3% year-on-year and + 24.0% month-on-month; deducting non-attributable net profit of 3.51 billion yuan, + 203.5% year-on-year and + 62.1% month-on-month. Mainly benefiting from the low base caused by the shutdown of work and production in Shanghai due to the epidemic last year and the decline in demand in Q1 this year, Q2 sales rebounded significantly from the same month-on-month. The sales volume of the company group in 2023Q2 was 1.18 million, + 16.4% year-on-year and + 32.5% month-on-month
The gross profit margin slightly decreased month-on-month, and the ROI of bicycles declined. The company’s 2023Q2 single-quarter gross profit margin was 9.5%, year-on-year -0.02pct, month-on-month -0.29pct. The slight decrease was mainly due to the increase in the production and sales of Shangtong Wuling, and the gross profit margin of pure electric cars was relatively low. The joint venture sales volume performed better in the same month-on-month due to the low base in the early stage. SAIC Volkswagen wholesale 277,000 vehicles in 2023Q2, year-on-year + 13.8%, month-on-month + 22.4%; SAIC-GM wholesale 265,000 vehicles, year-on-year + 14.1%, month-on-month + 42.5%, but due to the Q2 price war end point discount significantly enlarged (according to Thinkercar discount data), the ROI growth rate was lower than the sales growth rate. The ROI from the joint venture and joint venture of the company in 2022Q2 was 2.289 billion The fuel vehicle market is gradually being replaced by new energy, and the company’s joint venture brand is in the throes of transformation. Looking forward to the second half of the year, we expect a slight decline in July and August, with demand expected to rise. The Q3 market performance is expected to be basically flat, and the Q4 quarter is expected to achieve a significant improvement.
Zhiji LS6 starts pre-sale, leading high-end upgrades
On August 25th, Zhiji LS6 debuted at the Chengdu Auto Show and started pre-sale, priced 230,000 – 300,000 yuan. The new car is positioned as a medium and large coupe SUV with a wheelbase of 2950mm, with space, appearance, fast charging and smart driving as the core selling points. The new car provides a dual-platform strategy of "quasi-900V" and "quasi-500V". "quasi-900V" adopts dual silicon carbide high-performance charging platforms, with a peak charging power of 396kW and a charge of 200 kilometers in 5 minutes; "quasi-500V" can achieve nearly 90% full power charging on 80% public charging piles, with a peak power of 231-250kW. In terms of smart driving, the LS6 is equipped with OrinX chips and lidar. According to an interview with Lu Da, executive director of the public relations business group of Zhiji Auto Brand quoted by the online car market, the LS6 has now gradually rolled out the high-speed NOA function across the country, and will radiate 333 cities across the country by the end of the year. At the same time, NOA and city NOA will also be officially beta-tested in September and October this year; in 2024, 100 cities will open the commuter mode, and these functions will be updated in the L7 and LS7 cars later. According to the online car market, the order of Zhiji LS6 exceeded 2,000 + one hour after the pre-sale, and the order reached 6,000 units 8 hours after the pre-sale. According to Spiegel Pro, the LS6 will be released in mid-October and will be delivered immediately. We judge that the LS6 has strong product strength and price competitiveness, and is expected to enrich the product matrix and price range of smart cars, becoming an important growth driver for high-end pure electricity.
Overseas continues to sell well, globalization has a wide sea and sky
Overseas sales are growing rapidly, and the European market is leading. In 2022, the company will export 1.017 million vehicles, + 45.9% year-on-year. Growth will continue in 2023. From January to July, overseas sales reached 630,000 vehicles, + 31.6% year-on-year, maintaining a good trend. In the European market, from January to July, the sales of self-owned brand MG reached 135,000 vehicles, + 148% year-on-year, with a bright performance. According to the Securities Daily Network, on the afternoon of July 4, SAIC announced that the company is currently planning to establish a complete vehicle factory in Europe. We expect the company’s new energy to have obvious advantages in product strength compared with mainstream competitors in Europe. The establishment of overseas factories will help to further increase overseas sales.
Investment advice
The company’s underlying technology is solid, the platform ability is excellent, and the independent growth is becoming clearer. With the gradual improvement of chip supply, the company is expected to usher in a new growth cycle of independent + joint venture two-wheel drive, and the passenger car leader will return. Maintain the profit forecast, it is expected that the company’s revenue will be 8,033/8,387/853.3 billion yuan in 2023-2025, and the net profit attributable to the parent will be 163.3/175/19.0 billion yuan, corresponding to EPS of 1.40/1 50/1.63 yuan, corresponding to the closing price of 14.36 yuan/share on August 31, 2023, PE is 10/10/9 times, respectively, to maintain the buy rating.
Risk warning
Auto market downside risks; joint venture brand downside risks; electric smart new models landing less than expected; overseas expansion less than expected.
