Description of the event
The company released the production and sales report for February 2023.
Incident comments
The overall recovery trend is improving, and a number of new smart electric vehicles will soon contribute to the increase. SAIC Motor sold 301,000 vehicles in February, down 6.4% year on year, up 26.6% month on month, and delivered 358,000 terminals, up 16.8% month on month, continuing to absorb terminal inventory. Looking at January-January cumulatively, wholesale sales reached 539,000 units, a year-on-year decrease of 30.6%. 1) Looking at car companies, in terms of joint ventures, SAIC-VW sold 73,000 units in February, down 19.1% from the previous year; in January-January, 145,000 units, down 34.3% from the previous year; SAIC-GM sold 68,000 units, down 10.3% from the previous year, and 123,000 units in January-January, down 33.8% from the previous year; SAIC-GM-Wuling sold 720,000 units, a year-on-year decrease of 102,000 units in January-January, a year-on-year decrease of 42.1%.
On the autonomous side, SAIC Motor sold 58,000 passenger cars, down 9.2% from the previous year, totaling 114,000 units in January-January, down 13.5% from the previous year; Zhiji sold 1,251 units, up 146.7% month-on-month, with a cumulative total of 1,758 units in January-January. 2) By energy type, sales of new energy vehicles were 45,000 units in February, down 1.4% from the previous year. In January-January, 77,000 units were sold, a year-on-year decrease of 34.6%. The new Zhiji Feifan has performed well. The Zhiji LS7 has recently started delivery. The cumulative order volume has exceeded 15,000, the deliverable orders scheduled for the first week of April have been sold out, and orders for the 90kWh four-wheel drive version have already been scheduled for July; the Skyfan F7 received more than 12,000 cash orders a month after its debut, and will go on sale in late March. 3) By region, exports and overseas base sales in February were 84,000 units, an increase of 49.3% over the previous year, and a cumulative total of 16,000 units in January-January, an increase of 31.9% over the previous year.
The MG brand has performed well in sales in Europe, Australia and New Zealand, the Middle East, Mexico, etc., and has doubled its monthly sales volume in the European market over the same period last year. The company's inventory adjustments are gradually being implemented. Judging from subsequent new car plans, with the listing and delivery of Zhiji LS7, Feifan F7, Roewe RX9, MG7, MAXUS V70, Buick E5, Wuling Bingo, etc., the company's overall performance will continue to improve.
Looking forward to the future, the new development mechanism will begin a replacement cycle, the intelligent electric layout will continue to advance, and independent restructuring will lead to value improvement.
The company's development structure was iterated for the second time, adding core technical capabilities with the three major vehicle technology bases and the four key system technology bases, and the intelligent electric layout continued to advance. The new development mechanism empowers independent brands to start a replacement cycle, and the pace of promotion is accelerated. The main model, the Roewe RX5, ushered in a replacement. The new MG MULAN is global, and the Chinese and European markets are working together, which is expected to shape popular models; Zhimi and Feifan are focusing on the middle and high-end pure electric market, driving continuous improvement of the brand; the new development mechanism benchmarks global standards, and the overseas business is expected to continue to contribute incrementally.
Investment advice: Joint venture brand sales have stabilized, independent brands have continued to improve, and the company's performance is expected to drive valuation recovery. Looking back, the decline in the company's performance is the main reason for the decline in net market ratio in recent years. Joint venture brand sales have gradually stabilized, and there is a clear upward trend in the price band, which is expected to resume profit contributions; independent brands have ushered in a replacement cycle under a new development mechanism, which is expected to reshape popular models and boost sales performance. The promotion of smart electric layout will lead to an increase in brand value, and improved performance is expected to drive valuation repairs. The company's 2022, 2023, and 2024 EPS are expected to be 1.56, 1.89, and 2.07 yuan respectively, corresponding to PE9.6X, 7.9X, 7.2X, and maintain the “buy” rating.
Risk warning
1. The progress of the launch of the new car did not meet expectations;
2. The impact of chip shortages is repeated.