2023 performance disclosure: 2023 revenue +0.7% YoY to RMB 726.20 billion, net profit to mother -12.5% YoY to RMB 14.11 billion, net profit after deducting +11.7% YoY to RMB 10.04 billion, and gross margin +0.6pcts YoY to 10.2%. Among them, 4Q23 revenue was +3.5% YoY +13.9% YoY to RMB 218.23 billion, net profit to mother was -22.2% YoY/-37.6% YoY to RMB 2.70 billion, net profit after deducting net loss YoY to RMB/M -84.9% YoY to 570 million yuan, and gross margin +1.2pcts/month-on-month +0.3pcts to 10.7%.
4Q23 The company's performance declined month-on-month, mainly due to increased credit impairment from SAIC Hongyan+SAIC-GM Finance and inventory depreciation of slow-selling models.
The degree of marginal improvement in joint ventures is divided: Investment income for joint ventures and joint ventures was -1.1% year-on-year to 10.72 billion yuan in 2023, and investment income for joint ventures in 4Q23 reversed year-on-year loss/+19.3% month-on-month to 3.35 billion yuan. 1) SAIC-VW's sales volume in 4Q23 was +6.7% YoY +16.3% to 383,000 units, SAIC-GM sales volume -12.5% YoY +1.3% YoY to 277,000 units, and SAIC-GM-Wuling's YoY +41.0% YoY to 517,000 units. 2) The performance of the company's joint venture brands is slightly divided. a) SAIC Volkswagen: The company's cost reduction efforts in 2023 have achieved results, and there have been marginal improvements in corresponding sales and profit performance. 2024E Volkswagen will launch the new platform Passat + Tiguan and the all-electric sedan ID.7. b) SAIC-GM: GM's overall performance is under pressure and plans to transform the product structure. While maintaining the basic market for mid-range and high-end products, the company will increase sales of new energy vehicles through models such as Aoge and GL8 hybrids. c) SAIC-GM-Wuling: The brand continued its leading edge in the mini car market, and achieved rapid sales growth after models such as the Wuling Starlight and Binguo were launched.
Export performance is still expected to lead the industry. The blockbuster model Zhiji L6 will soon be unveiled: SAIC's passenger car sales volume +47.1% YoY +40.0% to 336,000 units in 4Q23, Zhizi sales volume +1103.0% YoY/+334.0% YoY to 23,000 units, SAIC Group's overseas sales volume +12.5% /month-on-month +21.6% to 370.000 units. 1) Exports: The company's 2024E will not only focus on regions with stable sales volume such as Europe, Australia, New Zealand, and the Middle East, but will also expand to regions including Southeast Asia and Latin America to achieve balanced global development. The company's good performance in overseas markets is expected to be more sustainable. 2) SAIC Passenger Cars: 2024E Roewe's new model D5X is positioned as an A-class hybrid SUV, which is expected to continue the excellent market performance of the D series through a cost-effective and new DMH hybrid system. 3) Zhizhi: Its new model, the L6, is scheduled to be unveiled on 4/8. For the first time, the model is equipped with quasi-900V ultra-fast charging solid-state battery technology. The range can be increased to 1,000 km, and it is expected to become a strong competitor in the medium to large car market.
Maintaining the “gain” rating: Considering factors such as the long electrification transformation cycle of joint venture brands and the slowing growth rate of independent overseas sales, we maintained the 2024E net profit forecast to 14.93 billion yuan, lowered the 2025E net profit forecast by 11.2% to 16.19 billion yuan, and added the 2026E forecast to 16.71 billion yuan. In the medium to long term, we are optimistic that the company will rely on its advantages in terms of brand+resources to achieve a flexible valuation repair and maintain a “gain” rating after the implementation of the joint venture electric transformation and implementation + independent new product cycle.
Risk warning: Independent loss reduction falls short of expectations; improvement in Japanese sales volume and performance falls short of expectations; risk of fluctuations in raw material prices; market risk.