Net profit fell, high-end setbacks, can Great Wall Motor get out of the cold winter by lowering prices？
Net profit fell, high-end setbacks, can Great Wall Motor get out of the cold winter by lowering prices?
On April 25, Great Wall Motor released its 2019 annual report.According to the report’s baseline, Great Wall Motor achieved an operating income of 962.1 trillion US dollars, an average of 3 per year.04%, realized net profit attributable to shareholders of listed companies44.9.7 billion US dollars, a 10-year average of 13.64%; net profit attributable to mother after excluding non-recurring gains and losses is 39.8.7 billion, an increase of 2 every year.52%.From the perspective of vehicle production and sales, last year, the sales of brand cars of Great Wall Motors reached 105.90,000 units, an increase of 1 every year.43%; production is 108.70,000 units, an increase of 5 every year.78%.Among them, the total sales of the main model SUV fell by 3.At 6%, sales of pickups and sedans (mainly new energy vehicles) rose by 12 respectively.73%, 210.05%.Benefiting from the company’s sales growth and the launch of the China VI model, Great Wall Motor’s net profit has started to pick up in the second half of last year. Its net profit attributable to its mother in the third quarter was $ 1.4 billion, an increase of 507%.In the fourth quarter, the net profit attributable to the mother was 15.800 million, an increase of 23 every year.32%.However, even without considering the impact of the epidemic, Great Wall Motors is still not out of the “cold winter of the car market”.Past announcements show that after experiencing sales growth in the third quarter, Great Wall Motors sales continued to increase beginning in November 2019.In November last year, the corresponding sales in December decreased by 13 respectively.08% and 20.77%.Net profit in the third quarter increased 5 times. Great Wall Motor’s revenue was mainly related to changes in vehicle revenue.Last year, Great Wall Motor’s vehicle revenue was 862.500 million yuan, a decrease of 5 every year.84%.This is related to the overall downward environment of the domestic auto market.According to the annual report, due to the influence of Sino-US economic and trade frictions, the switch of environmental standards, the decline of new energy compensation and other factors, in 2019, China’s automobile production and sales will be completed by 2572 respectively.10,000 vehicles and 2,576.90,000 vehicles, down by 7 each year.5% and 8.2%.According to statistics from the China Association of Automobile Manufacturers, passenger car production and sales in 2019 will be 2136, respectively.0 million vehicles and 2144.40,000 vehicles, down 9 each year.2% and 9.6%.After this, Great Wall Motor achieved an overall increase in sales against the trend in 2019, which can be said to stabilize part of the head of its own brand.In terms of vehicle models, the main models of Great Wall Motors are divided into pickups, SUVs, and cars (mainly new energy vehicles).Corresponding to last year’s sales were 16.50,000 vehicles, 85.20,000 vehicles and 4.20,000 vehicles.Among them, SUV sales fell by 3 year-on-year.6%, sales of pickups and cars increased by 12 respectively.73%, 210.05%.Looking quarterly, in the second half of 2019, Great Wall Motor’s revenue and net profit showed a marked improvement.Revenues for Q3 and Q4 in 2019 were 21.2 billion yuan and 336, respectively.3 ten percent, an increase of 18 per year.01% and 3.21%; net profit attributable to mother is 1.4 billion yuan, 15.8 ten percent, an annual increase of 507%, 23.32%.In the annual report, Great Wall Motor fully explained the reason for the sharp increase in net profit in the third quarter.According to the March 2019 report disclosed by the Air Force, the Great Wall explained that it has two main factors, and the company achieved sales of 23 in the third quarter.0.6 million vehicles, an annual increase of 12.4%, surpassing the industry’s negative growth level; growth, due to the increase in the price of the National Six model and the reduction of the company’s sales discount, led to a significant increase in bicycle profit, and bicycle revenue in the third quarter9.20,000 yuan, an annual increase of 5.0%.After the frustration of high-end, can we get out of the cold winter of the auto market by cutting prices?Although the level of revenue in both revenues improved in the second half of the year, it would be premature to convert Great Wall Motors out of the cold winter of the industry.The production and sales report released by the listed company Democracy shows that after experiencing sales growth in the third quarter, Great Wall Motors sales continued to alternate starting in November 2019.In November and December, overall sales were subdivided into 13.08%, 20.77%, resulting in a 11% decrease in sales for the entire quarter.According to the research report published by Tianfeng Securities, Great Wall Motor’s sales in the last quarter increased at the same time as its net profit increased, mainly due to the increase in the proportion of sales of high-end models and the increase in unit prices caused by the reduction in discounts.Pioneer Great Wall bicycle net profit is 0.470,000 yuan, rated 0 in 2018.34 million increased by 38% year-on-year.The so-called high-end models mainly refer to the wey series of brand cars, named after the chairman Wei Jianjun. Since the beginning of its establishment in 2016, the group has been entrusted with the high hopes of the group climbing to high-end brands.Sauna, Yewang noticed that even the proportion of sales increased in the fourth quarter, but the sales of the wey series actually increased significantly.From the perspective of December last year alone, the wey series renewed to 19.89%.Expanding to expectations, in the whole year of 2019, wey series brand sales were 100043 units, 28 before and after each.28%.Jia Xinguang, executive director of the China Automobile Dealers Association, told reporters that it is difficult for consumers to distinguish the sales of the wey series from the existing Harvard series of the Great Wall.”Wey and Harvard series are in the same matrix, engine brands, transition is similar, consumers can not feel where the high-end of the Wey series.”On the whole, the reason why the Great Wall can increase sales depends more on price reduction.According to the company’s vehicle sales revenue of 862.500 million yuan, total sales 105.According to the calculation of 870,000 units, the Great Wall Motor’s bicycle replacement is about 8.150,000 yuan.In 2018, the bicycle breakdown by the same calculation8.780 thousand yuan, at least 7 per year.7%.The reporter saw on Harvard’s official website that Great Wall Motor launched discount concessions in March, April, June, September, November, and December last year, “Zhi Gao Ju Hui 2.”80,000, minimum 6.The words “60,000” appear alternately on the official website.R & D investment has increased by 50%, and the pace of transitional new energy is accelerating. Data show that Great Wall Motor will invest R & D expenses in 201927.1.6 billion, an annual increase of 55.80% has become a highlight in the annual report.Great Wall Motors weighed and reported that major R & D expenses were mainly used for research and development of complete vehicles, core parts and components, and new energy technologies.The annual report shows that in 2019, Great Wall Motor launched a number of models, and the SUV launched at least 4 models including the Haval H6GT.In the second half of 2019, Great Wall Motors launched the pickup truck brand Great Wall Gun with an annual sales volume of 1.830,000 vehicles.In terms of core components, Great Wall Motors has established companies such as Honeycomb Etron and Seiko Automobile. The company weighs and transforms into self-made capabilities for core components such as engines, transmissions, and lights.The most noteworthy is the new energy field. For the Great Wall, which started with pickup trucks, entering the sedan field through new energy is the main direction of Great Wall Motors.Because of its small size, Great Wall Motor’s car sales grew faster last year. The total sales of Euler series cars were 38,865 units last year, an increase of 1005.69%.In addition to the Euler series, in November last year, Great Wall has reached a cooperation with the BMW Group, the two sides jointly create “Liang Automobile” pure electric car brand series.According to the plan, the first phase of the “Liang Automobile Project” has a total investment of RMB 5.1 billion, a standard annual production capacity of 160,000 vehicles, and has approximately 3,000 employees.BMW and Great Wall each contributed half.Wei Jianjun, chairman of Great Wall Motors, has high hopes for the cooperation. He said that the company will work hard to reduce and reduce the time and cost of paying tuition and enter the higher-end market segment.The Great Wall Motor ‘s annual report warns of risks, tightened fuel consumption, and the decline of new energy alternatives. The Group ‘s new energy brand is in the development stage, and its products and technologies are in the layout stage. The competition is insufficient, and fuel consumption points and operating costs are under great pressure.In addition, Great Wall Motor also pointed out that affected by the epidemic, there is a risk of breaking the global automotive industry chain, which brings business management crisis to the company, mainly involving corporate procurement, production, sales, investment and other aspects, causing the risk of stagnation of production capacity.Reporter Peng Shuo, Li Yunqi and Sun Yong proofreading Lu Qian