Policy Demand Driven By Two Wheels: Performance Improvement Of Listed Companies In New Energy Automobile Industry Chain In The Third Quarter

With the growth of "golden nine silver ten" sales in the overall automobile market, the new energy automobile industry also changed its declining trend in the first half of the year and performed well in the third quarter.

Recently, a number of listed companies related to the A-share new energy automobile industry chain have successively announced the third quarter financial report of 2020. According to incomplete statistics, among the 51 listed companies in the new energy industry chain that have disclosed the third quarter report, 24 of them have achieved profits; compared with the performance of the first half of the year, 38 of them have improved their net profit in the third quarter.

Among the vehicle enterprises, BYD (002594. SZ), the leader of new energy vehicles, achieved a revenue of 44.520 billion yuan in the third quarter, a year-on-year increase of 40.72%, and a net profit of 1.751 billion yuan, a year-on-year increase of 1362.66% Among the supply chain enterprises, Ningde times achieved a revenue of 12.7 billion yuan in the third quarter, a year-on-year increase of 0.8%, and a net profit of 1.42 billion yuan, a year-on-year increase of 4.24%, and a positive growth of net profit in a single quarter for the first time in this year.

In addition, driven by the rapid growth of Tesla sales this year, 29 of the 54 listed companies in Tesla industrial chain achieved year-on-year growth in net profit attributable to their parent companies in the first three quarters.

From the perspective of the industry, the improvement of the performance of enterprises related to the new energy vehicle industry chain is closely related to the increase of demand for new energy vehicles and the support of national policies.

According to the latest data released by the China Automobile Industry Association, since July saw the first year-on-year positive growth of new energy vehicles, in September, the production and sales of new energy vehicles have reached 136000 and 138000 respectively, with a year-on-year increase of 48% and 67.7%; in the first nine months, the cumulative production and sales of 738000 vehicles and 734000 vehicles decreased by 18.7% and 17.7%, respectively, and the decline gradually narrowed.

The sharp rise in sales pushed up the share prices of relevant listed companies. Wind data shows that since entering the second half of the year, the A-share new energy vehicle index has risen by nearly 30%, greatly outperforming the market.

However, it is worth noting that during the critical period of subsidy decline, the new energy automobile industry has superimposed the double impact of the epidemic situation, accelerated the internal structural adjustment of the whole industry, and the polarization was more serious, and the competitiveness of the leading enterprises was further revealed.

Polarization of Vehicle Enterprises

Entering the third quarter, China's electric vehicle market gradually returns to the normal development, and the market pattern adjustment is more obvious. In the era of subsidy, the main market of electric vehicles, such as rental and online booking, is facing great challenges this year, while the private consumer market is rising against the trend.

In the private consumption market, the new energy passenger car market is both high and low. On the one hand, Wuling Hongguang Mini EV, whose starting price is less than 30000 yuan, has accelerated to occupy the low-end market; Tesla, Weilai and ideality have performed well in the high-end new energy vehicle market.

The change in demand side is directly transmitted to vehicle enterprises, and BYD's sales volume of new energy vehicles has also hit the bottom and rebounded. In September, the sales volume of all passenger cars of the company was 40905, with a year-on-year increase of 2%; among them, the sales volume of new energy vehicles was 18603, with a year-on-year increase of 42.6%. In the domestic new energy vehicle market, BYD surpassed Tesla China in September, ranking second after SAIC GM Wuling.

It is worth mentioning that BYD's newly launched high-end electric vehicle Han EV has achieved good market performance against Tesla Model 3. According to the latest data, Han EVs delivered 5612 vehicles in September, up 40.3% month on month.

From January to September this year, BYD achieved an operating revenue of 105.023 billion yuan, a year-on-year increase of 11.94%; and the net profit attributable to shareholders of the listed company was 3.414 billion yuan, with a year-on-year increase of 116.83%.

Thanks to the development prospects in the new energy vehicle market and power battery, BYD was favored by investors and its share price soared. As of the end of the year, BYD had a cumulative increase of more than RMB 232.98. In addition, BYD surpassed SAIC Group in July this year to become the highest market value auto company in China. At present, the latest market value of BYD is 458.2 billion yuan.

In contrast with BYD, the operating revenue and profit of BAIC Blue Valley (600733. SH) have both declined since this year.

On the evening of October 29, the third quarter report of 2020 published by BAIC Blue Valley showed that the company's operating revenue in the first three quarters was 3.922 billion yuan, down 78.16% year-on-year; the net profit was - 2.884 billion yuan, a year-on-year decrease of 820.15%.

BAIC bluevale said that affected by the new crown pneumonia epidemic and market conditions, it is expected that the company's cumulative net profit in fiscal year 2020 will be a loss.

In fact, affected by the consumption pattern change of new energy vehicles market and the new crown pneumonia epidemic in the first half of the year, BAIC new energy is facing severe challenges this year. According to the previous production and sales data released by BAIC Blue Valley, in the first nine months of this year, the sales volume of BAIC new energy was only 21000, down 78.57% year on year.

Facing the transition of China's new energy vehicle market from subsidy era to market-oriented stage, BAIC new energy needs to find a long-term development direction.

"Now we have reached a critical point when the new energy vehicle market breaks out. This can be seen from Tesla's sales success in many cities. Consumers begin to pay more attention to new technologies, new user experience, faster iteration and better user experience of new energy vehicle products. " On October 24, Liu Yu, general manager of BAIC new energy, said in an interview with the media.

In order to boost the high-end new energy vehicle market, BAIC new energy has launched a new high-end new energy brand arcfox. In addition, BAIC Blue Valley has increased its R & D expenses, hoping to enhance its own strength through the improvement of products and technology. According to the financial report, in the first nine months of this year, the R & D cost of BAIC blue valley was 422 million yuan, an increase of 43.56% over the same period of last year.

Policy driven, industry or new cycle

With the introduction of new energy subsidies and vehicle charging in rural areas, it is believed that with the introduction of new energy subsidies and vehicle charging in the whole industry, new energy consumption is being promoted.

"The decline of subsidies in 2019 and the epidemic situation in early 2020 have affected the production and sales of new energy vehicles. With the gradual control of the epidemic situation, the sales of new energy vehicles have gradually rebounded. Under the dual energy policy, it is still expected to get out of the future driven by the dual energy policy and automobile market. " Zhongtai Securities pointed out in the research report.

Since the beginning of this year, the intensive and favorable policies from the central government to the local government have promoted the development of the new energy vehicle industry. In April, the Ministry of industry and information technology and other departments issued a document on improving the financial subsidy policy for new energy vehicles, which not only made it clear that there would not be a decline in the year, but also that the policy would be extended to 2022; in June, the Ministry of industry and information technology revised the double integral management method to give preferential accounting for vehicles with energy saving and emission reduction advantages. In terms of increasing infrastructure construction and liberalizing the market, many departments and regions have successively issued policies to promote the development of new energy vehicles.

Since July, the policy of new energy vehicles going to the countryside and the traffic restriction policy to be implemented in Shanghai have also promoted the growth of new energy vehicle demand to a certain extent.

Recently, the introduction of "energy saving and new energy vehicle technology roadmap 2.0" and "new energy vehicle industry development plan (2021-2035)" and other documents have further determined the development direction of China's new energy vehicle industry.

According to the plan, by 2025, China's new energy vehicles will account for 15% to 25% of the total vehicle sales, of which pure electric vehicles will account for more than 90%. By then, the sales of new energy vehicles are expected to reach 5 million. In 2035, China's new vehicle sales will be completely set as environmental protection vehicles, 50% of which are pure electric vehicles and 50% are hybrid vehicles.

"Thanks to the national top-level design and the government's support for the consumption of new energy vehicles, the market scale of new energy vehicles will increase steadily in the future. It is expected that the new energy vehicle market will usher in comprehensive growth in the fourth quarter. " On November 2, industry insiders who have long studied the new energy vehicle market said that in the future, supporting facilities for new energy vehicles will also become market growth points.

From the performance of the third quarter, Ningde times, a leading domestic power battery enterprise, achieved the first double growth of revenue and net profit in the third quarter. In the third quarter, the company's revenue and net profit were 12.7 billion yuan and 1.42 billion yuan, respectively, up 0.8% and 4.24% year-on-year. In the first three quarters, revenue was 31.522 billion yuan, a year-on-year decrease of 4.06%; net profit was 3.357 billion yuan, a year-on-year decrease of 3.10%.

The performance of battery enterprises, diaphragm enterprises, negative electrode material enterprises, lithium battery equipment enterprises and mining companies in the new energy automobile industry chain, such as Nandu power supply, Desai battery, Xingyuan material, Zhongke electric, Yinghe technology, pioneer intelligence, Hanrui cobalt industry, Minmetals rare earth, Tongling Nonferrous Metals and other new energy automobile industry chains have seen significant growth.

According to the Research Report of Kaiyuan securities, there has been a turning point in the performance of the new energy automobile industry and companies. This turning point is an important critical point in the industry cycle. The upward cycle after the inflection point is expected to last two to three years.

In addition, Huaxi Securities also pointed out in the research report that the penetration rate of new energy vehicles is at a low level and the growth trend is clear. Charging pile is one of the new infrastructure fields. The continuous improvement of charging infrastructure will form complementary advantages with the promotion of new energy vehicles and realize coordinated development. The solution of charging pain points will promote the popularization of new energy vehicles, and the growth of new energy vehicle ownership will also promote the use efficiency of charging pile and stimulate the scale of investment. Charging pile is expected to enter the new year of construction, equipment suppliers and operation will usher in better development opportunities.

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