Summary of the report:
BAIC New Energy is the target of A-share pure new energy vehicles, and it is also one of the new energy vehicle enterprises with the strongest technical capability, the richest product line, the largest demonstration application scale, the highest market share and the most complete industrial chain in China.
BAIC New Energy achieves the champion of pure electric passenger car sales. In 2017, BAIC New Energy sold 103199 units, ranking first in the country, with both production and sales exceeding 100, 000 units, and the pure electric market share is expected to reach 23.5%. BAIC's new energy market share continues to lead, thanks to four-wheel drive of products, research and development, marketing and services.
Product end: more than 10 new models have been launched continuously for 17 and 18 years, forming a perfect product layout. In the private market, a "national car" combination is formed with a new EC+ and a new EX, focusing on strengthening the popularity of the third and fourth lines of the market; with a new EU car + ET series SUV "Gemini" combination, focusing on entering the first and second tier markets; and a cross-border boutique of more than 400km to create a new popular style in the industry.
R & D end: the R & D layout of "five countries and seven places" and China's "Blue Valley" R & D center are the core guarantee of product strength. From 2013 to 2017, BAIC's investment in new energy R & D reached 3.622 billion yuan, accounting for an average of 20.35% of operating income.
Marketing side: continuous innovation model to open up new markets. The company is actively exploring shared travel. By the end of 2017, light travel has covered 12 cities across the country, with 10000 operating vehicles.
BAIC is the only automobile company that adopts separate production, sales and network-building model. BAIC New Energy has built 235 new stores and a total of 300 stores in 139 cities in 25 provinces across the country.
Service side: service innovation to establish brand value. The after-sales service of BAIC New Energy is also the leading level in the industry. By the end of 2017, BAIC New Energy has 250 service stations and 4 spare parts centers across the country, with a strong service capacity nationwide. The after-sales service of BAIC New Energy is also the leading level in the industry.
Investment and valuation: asset exchange with SST Vanguard, with a valuation of 28.85 billion. BAIC New Energy is expected to achieve an annual operating income growth of 30%, 66% and 56% in 17-18-19, with operating income of 12.17 billion, 20.162 billion and 31.367 billion respectively. Using the marketing method, BAIC New Energy will be valued at 30.4 billion in 2017.
Risk hint: the subsidy of new energy vehicles fell back more than expected, and the market sales fell short of expectations.