Description of the event
The company released the production and sales report for March 2023.
Incident comments
The total volume was disrupted by the short-term price war, and overseas growth continued to be high. SAIC Motor sold 352,000 vehicles in March, down 20.6% year on year and up 16.7% month on month. Wholesale sales of 891,000 units were achieved in Q1, down 27.0% from the previous year. 1) Looking at car companies, in terms of joint ventures, SAIC Volkswagen sold 81,000 units in March, down 26.4% from the previous year; Q1 accumulated 226,000 units, down 31.7% from the previous year; SAIC-GM sold 63,000 units, down 29.1% from the previous year; Q1 accumulated 186,000 units, down 32.3% from the previous year; SAIC-GM Wuling sold 91,000 units, down 39.7% from the previous year, and Q1 totaled 193,000 units, down 41.0% from the previous year. On the autonomous side, SAIC sold 82,000 passenger cars, an increase of 32.2% over the previous year. Q1 accumulated 196,000 units, a year-on-year increase of 1.2%, and sales of Zhiji cars were 2.007 units, an increase of 60.4% over the previous month, and a total of 3.765 units in Q1. 2) By energy type, sales of new energy models were 65,000 units in March, a year-on-year decrease of 12.4%, and a cumulative total of 142,000 units in Q1, a year-on-year decrease of 26.0%. Looking at car companies, sales of SAIC Motor Passenger Cars, SAIC Volkswagen, and SAIC-GM New Energy achieved positive year-on-year growth; looking at major new models, the Feifan F7 currently has orders of more than 1,500 units per week, and Wuling Bingo orders more than 3,000 units per week. 3) By region, exports and overseas base sales in March were 97,000 units, an increase of 92.1% over the previous year. Among them, sales of new energy vehicles accounted for nearly 30%, and sales of independent brands accounted for more than 80%; Q1 accumulated 257,000 units, an increase of 49.6% over the previous year. The company's overseas market continues to grow rapidly. The global model MG4ELECTRIC performed excellently. Sales exceeded 10,000 units in March. In 2023, the MG4 will be fully sold in more than 80 countries on 6 continents, and global sales are expected to exceed 150,000 units. The impact of the current price war has gradually subsided, and demand for terminals is expected to pick up as wait-and-see sentiment eases. The company's new cars continue to land, and new models such as Zhiji LS7, Feifan F7, MG7, and Wuling Bingo have already begun to be marketed and delivered. Order performance is good, which will accelerate the overall increase.
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 selected 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 MGMULAN 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 EPS is expected to be 1.56, 1.89, and 2.07 yuan respectively in 2022, 2023, and 2024, corresponding to PE9.2X, 7.6X, and 6.9X, maintaining the “buy” rating.
Risk warning
1. The impact of chip shortages is repeated;
2. Terminal demand is weaker than expected.