Fengkou Research Report | Revenue increased by 50%, net profit plummeted by 29%. Can BYD’s interim report hold up its trillion-dollar market value dream? -Peninsula

Original title: Fengkou Research Report | Revenue increased by 50%, net profit plummeted by 29%, can BYD’s interim report hold up its trillion-dollar market value dream?

Since reaching a low of more than 140 yuan in early May of this year, BYD’s stock price has started to rise all the way. It has risen by more than 100% in the last 4 months, and its market value has reached more than 820 billion yuan. “.

Just when investors expected BYD to set new highs, the new energy automobile giant handed over a surprising first half of the “report card.”

On the evening of August 27th, BYD released its first half-year financial report. The report shows that BYD achieved operating income of 90.885 billion yuan in the first half of the year, an increase of 50% year-on-year; net profit attributable to its parent was 1.174 billion yuan, a year-on-year decrease of 29%.

In the face of high-speed growth in revenue and substantial decline in profits, investors’ differences have increased significantly. With the continued improvement of new energy vehicles, can BYD continue to be “crazy”?

Increase income but not profit Net profit in the first half of the year decreased by nearly 30% year-on-year

On the evening of August 27, BYD released the report card for the first half of 2021. The financial report shows that in the first half of 2021, BYD achieved revenue of 89.131 billion yuan, a year-on-year increase of 53.60%; net profit attributable to the parent was 1.174 billion yuan, compared with 1.527 billion yuan in the same period last year, a year-on-year decrease of 29.41%; after deducting non-recurring gains and losses, The company’s net profit was 369 million yuan, a year-on-year decrease of 59.76%, and there was an increase in revenue but not profits.

The growth rate of BYD’s net profit was mainly dragged down by the second quarter.

In the first quarter of 2021, BYD achieved operating income of 40.992 billion yuan, a year-on-year increase of 108.31%; realized net profit attributable to the parent company of 237 million yuan, a year-on-year increase of 110.73%. According to calculations, in the second quarter of 2021, BYD’s operating income was 49.893 billion yuan, a year-on-year increase of 22.21%; net profit attributable to the parent was 936 million yuan, a year-on-year decrease of 39.59%.

Regarding the decline in net profit, BYD explained in its semi-annual report that during the reporting period, due to changes in product structure, the company’s gross profit margin declined; at the same time, the company’s overall profitability was affected to a certain extent by the rise in raw materials such as commodities. The company’s gross profit margin decreased from approximately 18.05% in the first half of 2020 to approximately 11.13% during the period.

BYD has three main industries: automobiles, mobile phone foundry and battery photovoltaics.

Revenue from automotive-related products and other products in the first half of the year was 38.146 billion yuan, a year-on-year increase of 25.41%; revenue from mobile phone components, assembly and other products was 42.822 billion yuan, a year-on-year increase of 86.26%; revenue from secondary rechargeable batteries and photovoltaics was 7.847 billion yuan Yuan, a year-on-year increase of 70.47%. The three major businesses accounted for 42.80%, 48.04% and 8.83% of the total revenue respectively.

The proportion of automobile-related products and other products has shrunk from 52% in the same period by nearly 10%, and the proportion of mobile phone components, assembly and other products has increased from 40% to 48% today.

Left hand chip, right hand battery Average daily sales of 847 new energy vehicles

BYD’s sales and share price “two blossoms” benefited from its status as a “slash company”.

At the end of 2020, the automotive industry began to break out of a crisis of core shortage. At that time, BYD was busy preparing for the spin-off and listing of its semiconductor business; when automakers successively announced that they were forced to suspend production due to core shortages, BYD issued an announcement stating that the company’s IGBT chips have been used in various product lines and can be sold outside of its own use. , At least in terms of IGBT chips, there is no “stuck neck” problem.

Then, the “battery shortage” swept across. On the earnings call in January this year, Tesla CEO Elon Musk emphasized that battery supply has become “an obstacle to the popularization of electric vehicles.” Musk predicts that “even if battery suppliers produce at their maximum speed, there will still be a serious shortage of battery supply in 2022 and beyond.”

However, BYD does not seem to worry. At present, BYD’s blade battery plant in Chongqing has a capacity of 20GWh, and the planned capacity will reach 35GWh by the end of this year. According to BYD’s plan, it is estimated that by the end of 2021, the total production capacity of blade batteries will reach 75GWh, and may further climb to 100GWh by the end of 2022.

In addition to self-supplied, BYD’s blade batteries will also be supplied to other car companies. On January 26, BYD officials revealed in a telephone conference that they would supply blade batteries for FAW Hongqi.

Recently, rumors of BYD “winning” Tesla are endless. On August 5, according to foreign media reports, BYD will start supplying blade batteries to Tesla in the second quarter of 2022, and said that the current Tesla models equipped with blade batteries have entered the C-sample test phase. The first model may be Model Y.

Although the proportion of automotive-related products and other product business revenues declined, BYD’s new energy vehicle sales in the first half of the year hit a new high.

According to the financial report, the cumulative sales of BYD’s new energy vehicles in the first half of the year were 154579, a year-on-year increase of 154.76%; the sales volume in July was 50,492, a year-on-year increase of 234.38%, a rapid increase. At the same time, in May, BYD’s one millionth new energy vehicle rolled off the assembly line, becoming the first Chinese brand to enter the “Million Vehicles Club” of new energy vehicles.

As sales continue to increase, BYD’s market share of new energy vehicles continues to increase. According to data released by the China Association of Automobile Manufacturers, in June, BYD’s new energy vehicle market share exceeded 16%, an increase of nearly 5% from the beginning of the year. Its sales continued to lead the domestic new energy vehicle market and remained at the forefront of the global market, and its brand influence was further enhanced. .

On July 25, the review status of BYD Semiconductor’s application for GEM IPO was changed to “inquired”, which means that it is one step closer to independent listing. However, on August 18, BYD’s listing procedure was suspended. As the issuer’s law firm was filed for investigation by the China Securities Regulatory Commission, the Shenzhen Stock Exchange suspends the review of BYD Semiconductor’s issuance and listing in accordance with relevant regulations. The law firm is Beijing Tianyuan Law Firm.

How does the stock price go Can BYD continue to be crazy?

With BYD Semiconductor’s spin-off and listing blocked and the net profit declining sharply, whether BYD can continue to be “crazy” is undoubtedly a big question mark in the minds of investors.

For those who continue to be optimistic about the company, a large company with an annual revenue of more than 100 billion yuan can still achieve 50% growth, which reflects excellent growth. For those who value profit indicators, net profit fell by nearly 60% after deducting non-recurring gains and losses, which is not an ideal data indicator.

BYD K Line Chart

On August 27, BYD’s share price rose 2% to 288.15 yuan, with a total market value of 824.4 billion yuan.

Faced with BYD’s high valuation, on the evening of August 27, private equity tycoon Mr. Bin Bin reposted: Why is Poly Vanke’s annual profit of 40 billion yuan, and the market value is only more than 100 billion and 200 billion. Where is the value investment?

But Bin Weibo screenshot

Whether BYD can continue to improve in the future, the Essence Securities Automotive team pointed out that the company’s production capacity expansion and new product launches are expected to continue to increase in sales. According to BYD’s official WeChat account, orders for dmi models exceed 100,000 units, and there are still a large number of undelivered orders. It is expected that with the successive release of production capacity, the sales of dmi models are expected to continue to rise. With the accelerated growth of the company’s new energy vehicle sales, the company’s bicycle profits are expected to continue to rise. Therefore, the company is expected to achieve both sales and profits in 2021. It is relatively optimistic about BYD’s annual vehicle sales and performance.

Three days before the release of BYD’s Interim News, Kaiyuan Securities released a research report to give BYD a buy. Kaiyuan Securities believes that Dolphin is accurately positioned in the 100,000-150,000 market and will jointly attack the economical electric vehicle market with DM-i; in addition, the acceleration of external battery supply and the vigorous development of energy storage business is expected to reshape the battery business. At the same time, he also pointed out that he should be wary of the risks of lower-than-expected sales of related models and lower-than-expected battery expansion progress, and pay attention to financial summary and valuation indicators.

Dazhong Newspaper · Fengkou Finance and Economics is comprehensively organized. Sources of materials: China Securities News, China Fund News, Shanghai Securities News, investment circles, daily economic news, etc.

(The opinions in this article are for reference only and do not constitute investment advice. Investment is risky, so be cautious when entering the market!)

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