Matters:
The company released its 2023 performance report. In 2023, the company achieved operating income of 726.20 billion yuan (+0.72% YoY), achieved net profit of 14.11 billion yuan (-12.5% YoY), and realized net profit of 10.04 billion yuan (+11.7% YoY). The dividend plan is to distribute a cash dividend of 3.69 yuan (tax included) for every 10 shares.
Looking at the fourth quarter alone, the company achieved net profit of 2.70 billion yuan and net profit deducted from non-mother of 570 million yuan.
Ping An's point of view:
Overseas markets continue to lead domestic car companies, but joint venture brands have declined significantly. In 2023, the company achieved total vehicle sales of 5.021 million units, a year-on-year decrease of 5.3%. In terms of the large autonomous sector, SAIC Motor's passenger car and SAIC-GM-Wuling sold 988,000/1.403 million units respectively, up 17.5%/-12.3% year-on-year respectively. In the joint venture sector, SAIC Volkswagen and SAIC-GM sold 1,215,000/1.010,000 units respectively in 2023, down 8.0%/14.5% year-on-year respectively. In terms of new energy vehicles, the company sold a total of 1.123 million units in 2023, up 4.6% year on year. Of these, Zhiji Auto sold 38,000 units, an increase of 665.1% year on year. In terms of overseas markets, the company's overseas sales volume reached 1.208 million units in 2023, an increase of 18.8% over the previous year, and remained number one in the domestic vehicle export industry for 8 consecutive years.
Losses in independent businesses remained stable year on year, and the profitability of the two major joint ventures declined. The company's investment income in 2023 reached 14.95 billion yuan (+1.7% YoY), of which SAIC-VW/SAIC-GM joint ventures achieved net profit of 3.13 billion yuan (-64.1% YoY)/2.54 billion (YoY -54.4%), and the two joint ventures contributed a total investment income of 2.84 billion yuan (-60.3% YoY). In terms of the autonomous sector, the gross margin of the company's autonomous business in 2023 was 3.9%, an increase of 1.5 percentage points over the previous year. According to the parent company's statement, after excluding investment income, the Group's net loss of independent business reached 4.26 billion yuan, which is basically stable compared to 2022.
The NEV sales structure has improved, and overseas markets continue to be deeply cultivated. According to the annual report data, the company's NEV sales structure continued to improve in 2023. With measures such as the launch of the Zhiji LS6 and price reduction of the joint venture brand NEV, the company's NEV sales account for 43.6% of the company's sales volume of 150,000 or more in 2023, an increase of 19.2 percentage points over 2022. In overseas markets, the MG brand's annual sales volume reached 800,000 units, and Europe became the company's first “200,000 vehicle class” overseas regional market. Furthermore, the company has already begun site selection for a European vehicle manufacturing base.
Profit forecast and investment advice: Under the offensive of independent energy, the company's joint venture brand profit trend may be difficult to reverse in the short term. According to the company's 2023 performance and the company's latest situation, we slightly adjust the company's net profit forecast for 2024 to 2025. We expect the company's net profit forecast for 2024 to 2025 to be 13.01 billion yuan/12.21 billion yuan (original net profit forecast was 12.97 billion yuan/12.45 billion yuan), while adding the company's net profit forecast for 2026 to 11.6 billion yuan. The company's overseas performance is impressive, and the transformation of new energy sources is determined. The release of performance in overseas markets and the deepening transformation of new energy are expected to drive up the company's valuation, and it still maintains the company's “recommended” rating.
Risk warning: 1) The extent of the decline in fuel vehicle sales may exceed expectations, causing continued pressure on the company's profitability; 2) the sales volume of the Zhiji brand may fall short of expectations; 3) The company's sales volume in Europe is high, which is greatly affected by EU countervailing investigations.