Let's take a look at SAIC's financial report today, presumably there is no need to introduce their situation, for many years, they have basically been the first in the domestic automobile industry.
However, the situation seems to have changed in recent years, that is, Tesla, which is in the limelight in Shanghai, has not cooperated with them this time;At the same time, it also met BYD, which rose early by laying out electric cars, and SAIC Motor obviously met strong competitors in the city and in the "countryside".
In the first three quarters of 2023, SAIC's revenue fell slightly by 0.8%, which is a continuation of the slight ** in 2022, but it has fallen relatively little, even if it is basically flat.
We can see that the most glorious era of SAIC was in 2018, when its revenue exceeded 900 billion yuan, and it reached 674.7 billion yuan in the first three quarters. Since 2019 before the epidemic, it has been obvious**, and although there has been ** in 2021, it cannot stop the trend of overall revenue**.
The downturn began in 2019, and the reason cannot be attributed to the impact of the three-year epidemicOf course, it is related to the total sales of domestic passenger cars, and it is also affected by new energy vehicles.
The performance of net profit, which is similar to the trend of revenue, also peaked in 2018 and has ** in 2021. However, in general, it is larger than revenue, with a growth of 9 in the first three quarters of 20238%, which is already less than half of the same period in the peak year.
Last time, a friend criticized me and said that when talking about SAIC, it must take out its "investment income" as soon as possible, because this aspect is the main source of its profit. The reason is that the profits of its joint ventures with Volkswagen and GM are in the "investment income".
SAIC's investment income is indeed relatively high, basically close to its net profit, and in 2020 and 2021, it exceeded the net profit, and indeed its main profit comes from the contribution of important joint ventures.
In each quarter since 2022, the single-quarter revenue has risen and fallen year-on-year, which is reflected in the annual or cumulative first three quarters, which is the flat or slightly declining state we saw earlier. In terms of net profit, except for the second quarter of 2023, the other quarters are among the substantial. Even the ** in the second quarter of 2023 is due to the fact that the base in the same period of 2022 is too low, and we all know that the epidemic in Shanghai was very serious at that time, which had a great impact on it.
SAIC has some financial business, and that part of the income is not included in the gross profit margin and the subsequent cost analysis, and there will be a certain error.
Gross profit margin has been moderate since 2018, and after being superimposed by the impact of the epidemic, it bottomed out and began in 2020, but it was relatively slow and there was no sign of a return to the level of 2017 and before, and it was 10% in the first three quarters of 2023.
We only make a reference for the net profit margin and return on equity of sales, because as mentioned earlier, their self-operated business is not the focus, then these indicators are not of much significance, and we must discuss these indicators from a different angle later.
In the last four years or so, the gross profit has been basically exhausted by the period of expenses and taxes and surcharges. Of course, it does not mean that their own businesses are loss-making, because they still have certain financial businesses and corresponding earnings, but the amount of these net gains is not too large. In other words, the physical business operated by SAIC Group is basically a state of capital protection, and it is only slightly profitable in some years after adding the attached financial business.
It should be said that SAIC's conditions are still the best in the industry, for example, it has nearly 20 billion yuan of research and development expenses a year, which is not a small amount of money, 20 billion can do a lot of things, but the premise is, of course, to make good use of it.
In terms of other income, investment income is the focus, which we have already said and compared with net profit, and there are also some other income, fair value change income, etc., but the amount is not large.
In the third quarter of 2023, the gross profit margin rebounded, and the profitability situation was the best performance in the last seven quarters.
The scale of financial business is not small, with more than 20 billion yuan in half a year, but the proportion is only 31%；The main business is still finished vehicles, accounting for more than two-thirds, followed by parts and other businesses. Nearly ninety percent of the business is in the domestic market, and other markets account for 112%, the degree of internationalization can only be regarded as average.
SAIC's cash flow performance is still quite good, except for nearly 10 billion yuan in 2022, the net cash flow from operating activities in other years in the last four years and the first three quarters of 2023 is more than 20 billion yuan. In recent years, SAIC's investment in fixed assets has been relatively large.
In terms of solvency, SAIC's long-term and short-term solvency is good, taking into account the balance between risk and efficiency.
At the end of the third quarter of 2023, it will be as high as 136.6 billion yuan, and 57.3 billion yuan of transactional financial assets, and cash assets will be as high as nearly 200 billion yuan, which is of course quite rich.
The long-term equity investment is nearly 60 billion yuan, and even if other equity instrument investments are added, it is only more than 70 billion yuan, accounting for more than 8 percentage points of assets, which obviously includes those joint ventures whose main profits are the best. There is no harm if there is no comparison, 8% of the assets create almost all the profits, and the other massive assets are running along, and this situation certainly needs to be reversed as soon as possible.
Because, the country has canceled all foreign investment restrictions on the manufacturing industry, in the future automobile joint ventures this model, may be less and less, if there is no industry transformation, partners generally will not take the initiative to adjust the equity ratio of the joint venture;However, in the face of industry transformation, there is really no policy protection for follow-up new cooperation.
It seems that in recent years, the proportion of arrears on the chain and customer receivables has not changed much, but due to the original difference, it has occupied more than 80 billion yuan of notes payable and accounts payable in more than three years, and the growth of accounts receivable in the same period is only more than 30 billion yuan, which is of course one of the important aspects of its net cash flow from operating activities. As for whether this is considered high?I don't want to judge, so I'll leave it to my friends who are engaged in this business.
SAIC also has continuously growing interest-bearing liabilities, although they are mainly long-term liabilities with controllable risks. But long-term liabilities will have to mature sooner or later, and their repayment will of course depend on future earnings. Fortunately, at the end of the third quarter of 2023, interest-bearing liabilities will begin to be the first to be the most important, and it is indeed time to reduce leverage, especially when the industry is facing adjustments, it is necessary to be appropriately conservative in financial strategy to hedge the increased risks in business strategy.
In the face of the comprehensive impact of the epidemic, new energy transformation and overcapacity after the industry's sales peaked, SAIC has indeed been greatly affected in recent years, but they have a strong foundation and resource conditions are still the best in the industry. However, the future profit model of the industry may undergo major changes, and smaller peers, small ships, behemoths, no matter how reluctant they are, they also need major changes.
Disclaimer: The above is a personal analysis and does not constitute investment advice to anyone!
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