For the full year of 2022, Yongda Auto achieved comprehensive revenue of 71,532 billion yuan, -8.2% year on year; Guimu's net profit was 1,425 billion yuan, -42.5% year on year. Among them, in 2022Q4, Gumo achieved net profit of 368 million yuan, or -45.6% compared to the previous year; in 2022, Gumo's net profit declined significantly, mainly due to the phased restrictions on automobile demand due to the epidemic, which acted as a buffer between supply and demand, and the gross profit of dealerships from new car sales fluctuated greatly. We believe that new vehicle sales and gross profit will recover in 2023, and the company's aftermarket business, new energy business, and used car business are contributing to growth. Maintain the company's “buy” rating.
The net profit of 2022Q4 was 368 million yuan, -45.6% year-on-year, dragged down by the low gross margin of the new car sales business.
Yongda Auto released its 2022 results. The company achieved revenue of 71,532 billion yuan in 2022, -8.2% year on year, and net profit of 1,425 billion yuan, -42.5% year on year. The decline in performance was mainly due to the impact of the epidemic in 2022, which caused the company's stores to be phased out of business due to the impact of the epidemic in 2022, gross profit pressure and year-on-year increase in sales and management expenses; among them, 202Q4 achieved comprehensive revenue of 202.043 billion yuan, +5.8% year on year; 2022Q4's comprehensive gross margin was 9.8% year on year, -3.0pcts year on year, month on month- 0.7 pct, mainly due to the impact of the Q4 epidemic, which led to continued pressure on the company's new car gross profit, which in turn caused Guimu's net profit to fall 45.6% year-on-year to 368 million yuan. In terms of revenue structure, 2022Q4's new car sales, after-sales service, financial and insurance agency business revenue reached 15.899 billion yuan/3,347 million yuan/416 million yuan respectively, +7.0%/+7.0%/+23.8% year on year, and the 2022H2 used car business reached 1,963 billion yuan, +40% year on year, and the used car business maintained high growth. The 2022Q4 company sold 48,867 new cars, +4.1% year on year; bicycle revenue was 325,400 yuan, +2.7% year on year and +7.7% month on month.
The company's new energy transformation has accelerated, reaching 36 independent new energy stores. In 2022, under the company's distribution model, independent new energy vehicles sold 5,730 units, +410% year on year, achieving revenue of 971 million yuan and +550% year on year. Sales and revenue accounted for 3.2% and 1.5% of new vehicle sales respectively, and +2.7pcts and 1.3pcts compared to the previous year.
By the end of 2022, the company's independent new energy brand 4S stores and independent new energy brand maintenance centers reached 30 and 6 respectively, an increase of 20 and 3 over the previous year. Among them, AITO, Smart, Zhimi, Lotus, and BYD each added 3, 6, 2, 3, and 1, and the number of independent new energy brand stores increased from 5.6% to 14%. We believe that as a leading dealer group in China, the company is expected to obtain more authorized new energy outlets with good operating efficiency and service levels, and that the share of new energy vehicle sales is expected to continue to increase.
The used car business continues to grow at a high rate and is expected to become the second largest growth point. In 2022, the company's used car dealership sales volume was 16,684 units, up +50.6% year on year, driving the share of used car dealership revenue and gross profit to 4.68% and 4.60%, +1.80pcts and +1.93pcts year on year. The group's overall ratio of old to new rose to 43.2% (+9.7pcts year on year). By the end of 2022, the ratio of new cars to used cars in the US was 1:2.5, while the domestic ratio was 1:0.7. Compared with the sales structure of mature markets, the domestic used car market showed great growth potential. The company planned in terms of brand building, channel upgrades, etc., and implemented it by integrating used car sales and sales, online and offline channel construction, and laying out new energy second-hand replacement and retail business in advance. We believe that the used car business is expected to become the company's second largest growth point.
Risk factors: sales of new models fell short of expectations; the company's new authorized outlets fell short of expectations; industry terminal price war intensified; and the company's financing costs rose.
Investment advice: We believe that with the steady recovery of the macroeconomic economy and the impact of the epidemic on 2022 performance is clearly mitigated in 2023, the company's new car sales business in 2023 is expected to recover marginally, while the used car business is expected to maintain high growth. We maintain the 2023/24 EPS forecast at $0.98/1.11. The current stock price is HK$5.63, which corresponds to the 2022/23/24 PE of 6.1/4.9/4.3 times, respectively. The company's PE center has increased 8 to 10 times over the past three years. Considering the negative impact of the recent price war on the dealer industry, we have given a certain valuation discount, maintained 6 times PE in 2023, and maintained the target price of HK$7. Maintain a “buy” rating.