Subsidy retreat caused a lot of car manufacturers last year performance decline

For new energy vehicles in 2017, it is a year of "painful and happy." Judging from the performance forecast announced by several auto companies in recent days, the subsidy withdrawal has had a direct impact on the industry, and corporate profits have declined; at the same time, the production and sales volume of new energy vehicles has grown steadily. Professionals expect to sell new energy vehicles in 2018. Will reach 1 million vehicles.

On the evening of January 23, Zhongtong Bus (000957) issued a performance forecast that the company's net profit in 2017 is expected to be 170 million to 230 million yuan, a year-on-year decrease of 70.98% to 60.75%. Zhongtong Bus stated that the company's operating performance in 2017 decreased compared to the same period of the previous year, which was due to the significant reduction in the national new energy passenger vehicle subsidy standard in 2017, and the company's product gross profit margin declined significantly.

The performance forecast of Foton Motors (600166) also shows that the subsidy retreat has had a negative impact on business performance. Foton Motor said that the company's net profit in 2017 will be reduced by 396 million to 510 million yuan over the same period of last year, a decrease of 70% to 90% year-on-year, of which deducted non-net profit significantly reduced by 120% to 150%.

Foton Motor believes that the pre-reduction of company performance is mainly due to the decline in the national new energy subsidy standards and the delayed delivery of policies, rising raw material prices, exchange rate fluctuations, increased loans and rising interest rates and other factors affecting recurring gains and losses, affecting 445 million yuan. RMB ~ 569 million yuan.

And BYD (002594), the industry leader in new energy vehicles, has shown signs of weak growth in its 2017 interim results and third quarter results. In the first half of 2017 and the first three quarters of the year, BYD’s net profit fell by 23.75% and 23.82% year-on-year. BYD expects net profit for 2017 to fall by 15% to 20% year-on-year.

In contrast, traditional auto vehicle companies have achieved steady growth in their performance. SAIC (600104) expects net profit to increase by 7% in 2017. GAC Group (601238) expects net profit to increase by 55% to 85% in 2017. GAC Group stated that the company’s 2017 growth was mainly due to the growth of its main business.

However, from the perspective of market sales, new energy vehicles are enjoying a good uptrend. According to the data from the China Automobile Association, in 2017, the production and sales of China's new energy vehicles were close to 800,000 vehicles, reaching 794,000 vehicles and 777,000 vehicles, respectively, an increase of 53.8% and 53.3% respectively year-on-year. Among them, among the new energy passenger vehicles, the production and sales of pure electric passenger cars were completed with 478,000 units and 468,000 units respectively, an increase of 81.7% and 82.1% year-on-year respectively; the production and sales of plug-in hybrid passenger cars were completed at 114,000 units respectively. 111,000 vehicles, an increase of 40.3% and 39.4% year-on-year respectively. Some people from China Automobile Association stated that sales of new energy vehicles in 2018 will definitely reach 1 million.

Haitong Securities Research Report believes that the new energy passenger car is in the transition of industrial layout and storage capacity in 2018. The downstream automaker prepares for double points in 2019 and puts in a large number of new models. The demand for upstream resources is strong and the price is strong. Will continue to significantly squeeze the middle reaches, affecting the profit distribution pattern of the industrial chain. Current high-quality growth stocks have entered a multi-year low, optimistic about the valuation of the first-line blue-chip and Baima growth stocks.

Huatai Securities also said in a recent research report that the adjustment of new energy vehicle subsidy policy has already been expected in the industry, but the medium-to-long-term upward trend will not change. Can focus on the vehicle leader such as Yutong Bus, BYD, and JAC. Leading companies in the industry, such as SAIC and GAC, can also continue to pay attention.

According to statistics from the Ministry of Public Security, as of the end of 2017, the number of new energy vehicles in China reached 1.53 million, accounting for 0.7% of the total. Among them, 650,000 new energy vehicles registered in 2017, an increase of 156,000 compared with 2016, an increase of 24.02%.

In terms of car ownership, there are currently 53 cities with more than one million cars, 24 cities with more than 2 million cars, and 7 cities with more than 3 million cars. Some industry experts believe that this means that there is still a huge market space for new energy vehicles.