China's new energy first brother announced the performance forecast for 2023, earning about 80 million yuan a day.
A few days ago, BYD released its 2023 annual performance forecast, which is expected to achieve a net profit attributable to shareholders of listed companies of 29 billion to 31 billion yuan in 2023, an increase of 74 percent over the same period last year46%-86.49%。Based on this calculation, BYD's average daily net profit in 2023 will be 7945210,000-8493150,000 yuan.
BYD, which ended 2023 with annual sales of more than 3 million units, can be described as making a lot of money. But is that enough? Maybe not enough. BYD's profitability is very strong, and earning 80 million yuan a day can make many Chinese car companies out of reach, but there is still a gap compared with many multinational car companies.
For example, Kia, whose annual sales are only 60,000 units higher than BYD, will have a net profit of 8 in 202378 trillion won, or about 47.3 billion yuan. Tesla, with an annual sales volume of 1.81 million units, will have a net profit of US$15 billion, or about 107.6 billion yuan, in 2023.
Obviously, BYD, which has gradually "upgraded" in scale and has even grown into one of the world's top ten automobile companies, still needs to improve its earning power. It is worth mentioning that this is also one of the problems faced by China.
BYD has not yet reached a new high in profits
Judging from the performance forecast, whether it is a profit of up to 31 billion yuan or a maximum of 86The growth rate of 49% is enough to show that BYD is very "top".
BYD said in the announcement that in 2023, the new energy vehicle industry will continue to maintain a rapid growth trend, and the company's new energy vehicle sales will hit a record high, further consolidating its leading position as the world's No. 1 new energy vehicle sales. Despite the fiercer competition in the industry, the company has achieved significant improvement in profitability and demonstrated strong resilience by virtue of the continuous improvement of brand power, the rapid growth of overseas sales, the continuous expansion of scale advantages and the strong cost control ability of the industrial chain.
In 2023, BYD will continue to maintain the top position in the global new energy vehicle sales list, surpassing Tesla for the first time in pure electric sales in the fourth quarter of last year, and at the same time, the soaring sales last year also made BYD one of the top ten car companies in the world. On the brand matrix, at present, BYD has also formed five major brands: Dynasty, Ocean, Denza, Equation Leopard, and Yangwang, with products covering high, medium and low-end segments, covering the needs of various user groups, and has a relatively complete brand matrix with excellent results. Even in terms of going overseas, BYD has made a big breakthrough in 2023, and the sales of BYD's new energy vehicles in overseas markets in 2023 have reached 240,000 units.
However, if compared with the former self, BYD's profit growth has slowed down significantly, and after announcing the complete suspension of production of fuel vehicles, BYD will make a big profit of 166 in 2022 with 1.8 million sales2.2 billion yuan, net profit increased by as much as four times year-on-year. Of course, while the base is increasing, the slowdown in BYD's profit growth is not worth mentioning. However, compared with some multinational car companies, it can be clearly perceived that BYD's earning power still has room for improvement.
It is worth mentioning that BYD has more places to spend money, and BYD's bet on high-end brands and equation leopards need a lot of resources to invest in the establishment of brand luxury tonality and channel network. In terms of intelligent upgrading, BYD has also determined to invest more than 100 billion yuan. And all of this needs to be supported by sustained profitability.
How to continue to improve profitability and reach the same level as multinational car companies is obviously a problem facing BYD. Of course, this is also a problem in front of China.
Is involution really an obstacle in front of China?
According to the performance forecast, BYD's net profit in the fourth quarter of 2023 will range from about 7.6 billion yuan to 9.6 billion yuan, lower than 104 in the third quarter1.3 billion yuan. It is understood that in order to achieve the goal of annual sales of 3 million vehicles, BYD launched several terminal price reduction measures in the fourth quarter, of which the price reduction of some models exceeded 20,000 yuan in December. This may have affected BYD's earning power to a certain extent.
And the impact of involution is not only BYD.
In 2023, China's automobile production and sales will both exceed 30 million units, a record high. The data shows that in 2023, the overall revenue of China's auto industry will exceed 10 trillion yuan, and the profit will reach 508.6 billion yuan, and the profit growth rate will be lower than the revenue growth rate. In addition, the automotive industry has a profit margin of 50%, which is lower than the profit margin of the entire industrial enterprise 58% average. In the past decade, the profit margin of China's automotive industry has shown a downward trend, and this data can reach 87%。
In recent years, the transformation of new energy vehicles has brought the opportunity for China's automotive industry to change lanes and overtake, but at the same time, the first war, involution, etc., have also made Chinese auto companies begin to face greater profit pressure. How to break the situation has become a difficult problem for Chinese car companies. As a leader in the field of new energy vehicles, BYD actually has experience in making money.
BYD, which plays the banner of "oil and electricity at the same price", is one of the players participating in the first battle. However, BYD has maintained a high gross profit margin while participating in the first battle through efficient cost control and product structure adjustment, and in the third quarter of 2023, BYD's gross profit margin reached 2212%, month-on-month instead of falling but rising. The root cause lies in the cost reduction effect brought by technology, vertical chain and scale advantages. But in the deeper ** war, it was inevitably affected. Of course, this may only be temporary.
Huaan** said in the research report that BYD's technical advantages and cost advantages have built a moat for it. In terms of technical advantages, the company relies on the DMI DMP hybrid architecture, DMO hybrid off-road platform, and pure electric exclusive platform E30 and the advantages of blade batteries have laid a leading position in the industry; In terms of cost, the company not only relies on the vertical chain system and leading technology to reduce costs, but more importantly, the cost reduction effect brought by scale advantages. Huaan** estimates that BYD's current cost per car is about 1220,000 vehicles, in the process of subsequent production and sales scale increase, the cost of a single vehicle is expected to continue to decline.
And this may have a certain reference significance for Chinese car companies. The Passenger Association has said that with the continuous contribution of electrification transformation and export growth, it will be the trend for China's annual automobile production and sales to exceed 40 million in the future. It's just that Chinese car companies, including BYD, also need to take into account more profits while breaking through the scale of sales, after all, this will determine whether they can "be strong and strong" in the future development.