The Performance Of The Third Quarter Further Recovered, And Automobile Enterprises Collectively Started To Sprint In The Last Quarter

In the third quarter of this year, the domestic car market showed a stronger recovery than the second quarter.

Recently, A-share listed vehicle companies have successively published three quarterly reports. The reporter of 21st century economic report selects the performance reports of 11 passenger car enterprises. Statistics show that more than 60% of the car companies achieved a year-on-year increase in total business income in the third quarter, while more than 80% of the car companies realized the improvement of net profit attributable to the parent company in the third quarter.

Among them, Changan Automobile, BYD, Jianghuai Automobile, etc. had obvious increase in operating revenue in the third quarter, with an increase of more than 40% in the current quarter. In addition, in terms of net profit attributable to the parent company, Chang'an Automobile and Jianghuai Automobile turned losses into profits on a year-on-year basis, while Jiangling Motor, BYD, SAIC Group and GAC group increased significantly.

However, affected by the new crown epidemic in the first half of this year, a number of auto companies are still facing challenges in terms of cumulative revenue and net profit attributable to the parent as of the third quarter. According to the report, only less than 40% of the total operating revenue of the 11 auto companies increased significantly, while only Jiangling Motor and BYD achieved year-on-year increase in net profit attributable to the parent company.

But with the advent of the fourth quarter, auto companies also started the final sprint. Affected by the epidemic in the first half of the year, many car companies adjusted their plans for new car launch. Only a few brands and models held a press conference online, and most brands and models postponed the release of new cars. As new car consumption ushers in the "golden nine silver ten" peak season and the upcoming Guangzhou auto show in mid and late November, auto sales performance in the fourth quarter is expected to further improve.

It is worth mentioning that new energy vehicles may reappear in the fourth quarter. In the third quarter, after adjustment, new energy vehicles have returned to the positive growth range, and the growth rate is significantly better than that of the whole industry. In addition, the latest industrial planning of new energy vehicles, regional market restrictions and upgrading policies will objectively increase the acceptance of new energy vehicles by consumers.

Affected by factors such as better performance in the third quarter and the expected release of industrial policies, the A-share auto sector rose on November 2, including the trading limit of China National Heavy Duty Truck and Jiangling Motor Co., Ltd., and the rise of Dongfeng Motor and Changan Automobile by more than 7%.

Shenyang, Liaoning, a famous automobile sales street. Photo by Xinhua News Agency

Further warming in the third quarter

From the financial reports of listed auto companies, the car market in the third quarter has obviously recovered.

From the perspective of revenue, only four passenger car companies, St Haima, * ST Xiali, BAIC Blue Valley and * ST Lifan, were still in negative growth year-on-year in the third quarter, while SAIC Group, which had been in trouble for a while, finally got back on track after a bad start. The total operating revenue in the third quarter was 214.92 billion yuan, with a slight increase of 2.8% year-on-year.

Most of the A-share listed auto companies' revenue growth is greater. For example, the total operating revenue of BYD, Changan Automobile and Jianghuai Automobile increased by 40.7%, 51.3% and 48.3% respectively year-on-year.

In terms of net profit attributable to the parent company, the recovery of automobile enterprises is more obvious. The loss of BAIC group increased by 6.89% in the third quarter of this year, while that of others increased by 6.89% respectively.

Thanks to the long-term cost control, the automobile industry can make the net profit better than the revenue in the special market environment. Previously, the data from the joint meeting of the passenger car market also showed that, with the gradual control of the epidemic situation, the year-on-year growth rate of economic efficiency of the automobile industry has shown a good omen, with profits ahead of revenue and turning from negative to positive. "From January to August, the total profit was 308.43 billion yuan, a slight increase of 1.5% year-on-year; the operating income was 4788.71 billion yuan, a year-on-year decrease of 1.4%."

However, the haze of the impact of the epidemic has not yet dissipated. For many car companies, although the performance of the third quarter has rebounded, the overall performance of the first three quarters is unsatisfactory. According to the data, among the 11 passenger car enterprises, only Jiangling Motor and BYD had a year-on-year increase in net profit attributable to the parent company in the first three quarters (excluding turning losses into profits), which also made the two car companies highly sought after in the secondary market, and BYD's share price rose successively, and Jiangling Motor has recently gained a number of limit boards.

In addition, the net profit of BAIC group and SAIC Motor Co., Ltd. decreased by 21.0% and 19.0% respectively compared with the same period of last year; in addition, the net profit of BAIC group and Changcheng automobile group decreased by 21.0% and 19.9% respectively compared with the same period of last year; in addition, the net profit of BAIC group and SAIC Motor Group decreased by 19.9% compared with the same period of last year Increase.

Compared with the overall market, the performance differentiation of A-share vehicle enterprises is obvious, and based on the performance of the first three quarters, the setting of annual targets of each automobile enterprise is not the same. For example, SAIC, which had a relatively stable growth in the past, aims to "outperform the market" this year. However, SAIC has not made clear its financial performance.

Will the auto industry continue to rise?

According to the research report released by Huachuang securities, the third quarter report shows that many auto listed companies have recorded performance growth exceeding market expectations, which mainly reflects the auto industry's over expected sales recovery and profit margin elasticity beyond expectations.

The agency believes that in 2021, considering the economic recovery to drive the recovery of middle and low-end demand, and the demand for high-end products driven by the peak of replacement purchase, the industry will continue to rise. It is expected that the boom will maintain for at least one year, and the profit improvement of automobile enterprises and parts is expected to continue. In the upward cycle of automobile boom, it is estimated that a number of competitive independent vehicle enterprises and parts enterprises will go up to a higher level.

After the haze of the epidemic, the domestic automobile market has indeed recovered at a relatively fast speed, especially since the second half of the year, the automobile sales volume has almost recovered in an all-round way. According to the data of the Travel Association, in the third quarter of this year, the wholesale sales volume of domestic automobile enterprises was 5.44 million, a year-on-year increase of 6%.

In the past October, car sales continued to improve. According to the weekly data of the Travel Association, the average daily wholesale sales volume from October 1 to 25 was 44700, an increase of 10% over the same period of last year, however, it decreased by 12% month on month. Judging from the current data, the "golden nine silver ten" of the auto market is more concentrated in September.

The analysis shows that the car market in October still shows an obvious upward trend. With the accelerated recovery of the economy and the continuous increase of residents' income, it is expected that there will be the biggest demand tide of car purchase in the whole year by the end of the year. Although at present, the sales trend of automobile enterprises is still stable, but the weekly retail rhythm of the terminal is faster, reflecting the better demand of the industry.

But when the market itself has recovered, there are still favorable policies. Recently, Shanghai has upgraded the regulations of "traffic restriction" on foreign license plates. On the one hand, from November 2, the time limit for external license plates on the inner ring viaduct will be extended. On the other hand, after the May Day holiday next year, the inner ring ground roads will also start to be opened within limited time. This directly stimulated the release of a wave of new car consumption demand.

The reporter of 21st century economic report had learned that the sales volume of new energy vehicles in Shanghai increased significantly in the week when the new regulations were issued, and the sales volume of some stores even increased several times than that of ordinary days. On November 2, the second-hand car online auction platform also released a report saying that in the last week of October, the average daily turnover of Shanghai area on the platform increased by 60% -- the foreign brand owners affected by the new regulations could not wait to sell and replace their cars, which will further enhance the sales of new cars.

As an emerging industry in the early stage of development, the current sales and ownership of new energy vehicles are not high. However, in the long-term development plan of the industry, new energy vehicles will occupy an important position in the automobile market in the future. According to the industrial plan released on November 2, 2025, the new energy vehicle sales target is to account for 25% of the total new vehicle sales. In the future, new energy vehicles will become an important engine for the growth of the automobile market.

In recent years, many auto companies have accelerated the pace of new energy vehicle products on the market. New forces of car manufacturing have started delivery, or have launched their second and third models. While traditional car companies are striving to release new models based on pure electric platform as soon as possible. Under the open road of pioneers such as Tesla and BYD, new energy vehicles are expected to take over the growth of the auto market "Baton".

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