Phoenix New Media Hong Kong stock | Daiwa issued a research report that the bank recently communicated with the management of Yongda Automobile, the company shared the results of the updated operating data, and looked forward to the future.
Yongda's revenue fell 4% in the third quarter from a year earlier, mainly due to a decline in new car sales. During the period, gross profit rose 12 per cent year-on-year, while net profit rose 32 per cent year-on-year. According to the company, Yongda's third-quarter sales fell 13 per cent year-on-year to 51153, while luxury car sales fell 14 per cent year-on-year to 33357 and mid-and high-end car sales fell 13 per cent to 17796.
Daiwa expects sales to show a high year-on-year decline in the fourth quarter of this year, and expects gross margins on new car sales to rise by 1-2 percentage points due to tight supply, mainly due to tight supply, making price discounts even smaller. On the contrary, this will increase its overall gross profit margin by 1.7 percentage points to 12%.
The company expects to sell 17000 to 18000 electric vehicles this year, up 20 per cent from a year earlier. In addition to XPeng Inc. and Weimar, Yongda also plans to work with Huawei Cyrus next. The gross profit margin of electric vehicles is generally 7-8% (relative to new car sales), but because of the short operating time, the after-sales revenue of electric vehicles is still very small. Daiwa expects that with experience and sales, dealers' after-sales income from electric vehicles is similar to that of electric vehicles.
Daiwa cut its 2021 revenue forecast by 10 per cent as the bank lowered its forecast for new car sales this year to 147000 (previously 167000), as chip shortages are likely to last into the first half of 2022. However, the bank raised its 2021 net profit forecast by 5 per cent because of improved profitability in new car sales.
To sum up, Daiwa raised its target price from HK $24 to HK $25, reiterating its "buy" rating.