“Hang it up.”
The estimated profit is 3.2 billion-3.8 billion yuan.
On the evening of October 14th, the performance forecast for the first three quarters of 2020 disclosed by Changan Automobile showed that as of September 30 this year, Changan Automobile is expected to turn losses into profits.
According to data, in the first three quarters of this year, Changan Automobile’s net profit attributable to shareholders of listed companies is expected to be between 3.2 billion and 3.8 billion yuan, an increase of 220.23%-242.78% from the 2.662 billion yuan in the same period last year. Among them, Changan Automobile’s third-quarter net profit attributable to shareholders of listed companies is expected to be 598 million yuan to 1.198 billion yuan, compared with -421 million yuan in the same period last year, an increase of 241.84% to 384.2%.
Regarding the sharp increase in performance, Changan Automobile said that it was mainly due to the company’s sales growth and product structure optimization, which greatly improved the profitability of its own business, and the profitability of joint ventures has steadily improved. At the same time, in the first three quarters of 2020, the increase in non-recurring gains and losses will be attributable to shareholders of listed companies with a net profit of approximately 5.6 billion yuan.
Old brother, come back
Such a highlight moment is a bit long-lost, but it’s no stranger.
In fact, in 2016, Changan Automobile’s net profit reached a peak of 10.285 billion yuan, and the sales volume of Changan’s own brand reached 1.28 million, ranking first in the sales volume of independent auto companies. The outside world gave Changan the title of “independent brother” and started The “three-strong era” of head independent brands.
However, in the past three years, this former independent brother has had a hard time.
The financial report shows that from 2017 to 2019, Changan Automobile’s net profit was 7.14 billion yuan, 681 million yuan, and a loss of 2.647 billion yuan, respectively, plummeting 30.61%, 90.46% and 488.81% year-on-year. Among them, 2019 is the first time that Changan Automobile has suffered a loss in its parent net profit since its listing 23 years ago.
At that time, some analysts believed that if Changan continues to maintain such a decline, it will be difficult to protect the first brother, and soon its “autonomous top three” seats will be replaced by SAIC passenger cars.
It may be forced by the situation, or it may be accumulated.
Entering 2020, Changan Automobile has begun to exert its strength, and its operating conditions have gradually improved.
The net profit attributable to the parent in the first and second quarters of this year was 631 million yuan and 1.971 billion yuan, showing a rising trend.
However, Changan Automobile’s positive growth in net profit was mainly due to the increase in non-recurring gains and losses.
Simply put, it is the sale of equity in its subsidiaries and the rise in holdings of other companies. Excluding these profits, in the first half of 2020, Changan Automobile’s non-net profit is expected to be approximately 2.275 billion yuan to -3.275 billion yuan, a further increase from the 2.24 billion yuan loss in the same period last year.
However, it is gratifying that this time Changan Automobile’s profit “moisture” is gradually decreasing.
Calculated based on the pre-earnings of the first three quarters announced by Changan Automobile, although Changan Automobile’s deduction of non-net profits in the first three quarters was at a loss, the deduction of non-profits has shrunk by about 600 million to 1.2 billion yuan.
The “evaporation” of water is inseparable from the improvement of expenditure.
According to data from Feilv Automobile, Changan Automobile sold 205,500 vehicles in September, a year-on-year increase of 28.6%; cumulative sales from January to September were 1,370,900 vehicles, a year-on-year increase of 12.01%, outperforming the industry by 18.9 percentage points.
Among them, the sales of Changan’s self-owned brand vehicles in September reached 153 million, a year-on-year increase of 31.9%. In the first nine months, the sales of Changan’s self-owned brands reached 1.0342 million, breaking through one million vehicles, a year-on-year increase of 12.1%. In the joint venture segment, the cumulative sales of Changan Ford from January to September were 167,100, an increase of 29.64% year-on-year; the cumulative sales of Changan Mazda reached 94,300, a slight decrease of 1.58% year-on-year.
Such achievements have also been favored by many securities institutions.
Huachuang Securities predicts that Changan Automobile’s 2020-2022 net profit attributable to its parent is expected to be 5.7 billion, 6 billion, and 7.2 billion, and maintain the “Strong Push” rating. The Pacific Securities Research Report stated that in the third quarter, passenger vehicles entered the “good” period of industry data, and Changan Automobile’s 2020 and 2021 net profits are expected to be 4 billion yuan and 6 billion yuan respectively.
Sales and performance have both risen, and the capital market is also optimistic. Has the crisis of Changan Automobile passed?
The answer may not be necessarily.
“The biggest crisis of an enterprise comes from within. At the moment of the new round of auto industry restructuring, if the transformation of Changan Automobile is not successful, it will face life and death.”
Although Changan Automobile performed very well in the first nine months, at this year’s Beijing Auto Show, Changan Automobile Chairman Zhu Huarong still sounded the “wake-up call” for himself.
And his worries are not unfounded.
In fact, at present, Changan Automobile has the problem of low overall gross profit, that is, the volume of products is not making money. It is reported that the gross profit margin of Changan Automobile in the first half of the year was 9.29%, which is far lower than the 17.11% of rival Geely Automobile and 14.72% of Great Wall Motor.
“The low profit on bicycles is mainly due to Changan Automobile’s lagging behind on the transition track.” Some insiders pointed out that the late arrival of high-end brands and weak new energy products are Changan Automobile’s “mutilation.”
At present, in the face of intelligent and high-end market demand, deploying new energy sources and impacting the mid-to-high-end market has become the inevitable choice for independent brands to move up, and it is also the killer of performance and profitability.
How can Changan Automobile, which has been in the rim for many years, fail to smell such a wind direction.
In fact, in the past three years, Changan Automobile has invested a lot of resources in the two fields of new energy and high-end, but the effect has been mediocre.
The “Shangri-La Plan” is Changan Automobile’s new energy strategy as early as 2017. This strategy can be described as very strategic-by 2020, complete the creation of three new energy dedicated platforms; by 2025, completely stop selling traditional fuel vehicles and realize the electrification of the full spectrum of products.
Now that we are approaching the end of the first phase, the market has not yet reported any developments in the planned “three new energy dedicated platforms”.
High-end brands have always been a topic that Changan cannot get around.
In April 2018, Changan Automobile officially announced the “Third Innovation and Entrepreneurship Plan”, and reorganized its brands into four major brands consisting of Changan Automobile, Auchan Automobile, Kaicheng Automobile and high-end brands (tentatively named AB) system.
However, after more than a year, several domestic high-end brands such as Geely’s Lynk & Co, Great Wall’s WEY and Chery’s Xingtu have been put into operation, while Changan Automobile’s new brand is in preparation for a long time.
In response to this, Changan Automobile executives have repeatedly stated in public: “Changan Automobile chose not to name another brand separately, but to make high-end products.”
In March 2020, Changan Automobile launched the UNI Gravity series products as a test of high-end products. However, at present, although the sales volume of its first model UNI-T is considerable, its price is no different from that of economy models, and does not match the “high-end” tonality. In addition, this model also has a lot of price overlap with Changan’s CS75, CS75 PLUS and other current volume models. In the long run, it is easy to cause “internal competition” in the Changan product line.
Obviously, “product high-end” is not a long-term solution, and high-end is a future that cannot be abandoned.
“I am suffocating a big move and doing my best (high-end brand).”
A few days ago, Zhu Ronghua said, “There are too many’martyrs’ in front. There is no such reason. I am a high-end brand consumer who will buy our products. I can only say that we plan to cultivate a new brand and we will prepare Judging from the situation, I am confident to move up.”
Frozen three feet is not a day’s cold; it is a mountain of Jiuren, is not a day’s work. Changan Automobile, for the return of the king, seems to have a difficult “upward” road to go.