Incident: The company released its 2023 annual report. In 2023, the company achieved total operating revenue of 744.71 billion yuan, +0.09% year-on-year, realized net profit of 14.11 billion yuan, -12.48% year-on-year, and realized net profit of 10.04 billion yuan without return to mother, +11.71% year-on-year.
After deducting non-profit growth, asset impairment and credit impairment dragged down the company's profits. In 2023, the company achieved total revenue of 744.71 billion yuan, +0.09% year-on-year, achieved net profit of 14.11 billion yuan, -12.48% year-on-year, and achieved net profit without deduction of 10.04 billion yuan, or +11.71% year-on-year. The company's gross margin in '23 was 10.2%, up 0.6 pct from '22. Looking at the cost rate for the period, the company's sales expenses rate for 23 was 4.0% (-0.1pct), the management expense ratio was 3.3% (-0.1pct), the R&D expenses rate was 2.5% (+0.1pct), and the financial expenses ratio was 0% (+0.1pct). The company's asset impairment accrued 4.45 billion yuan in '23, an increase of 3 billion yuan over '22, and credit impairment of 3.5 billion yuan, an increase of 1.42 billion yuan over '22. Asset impairment and credit impairment have a certain impact on the company's profits.
Make every effort to expand the market and ensure the rapid development of overseas business. China became the world's largest automobile exporter in 2023. As China's largest exporter, SAIC Motor sold more than 1.2 million vehicles overseas in 2023, supported by global vehicles such as the MG4, EZS, and EHS. Among them, the company's own brands account for 92% of overseas sales, and the MG brand's annual sales volume exceeds 800,000 units. The ZS/AP/HS series continues to grow rapidly, especially in the European market. The MG brand has stabilized at more than 20,000 units in a single month, and Europe has become the company's first “200,000 vehicle class” overseas regional market. The MG brand not only ranks in the top two in the British and Spanish pure electric markets, but has also reached the top ten in major global markets. The main product, the MG4 EV, successfully won the “British, French, German and Australian Model Slam of the Year”, etc. Over 30 authoritative overseas awards. In addition, the company's export sales of commercial vehicle products such as MAXUS have reached a new level of 100,000 vehicles throughout the year. In order to better serve local users, the company has also begun site selection for European vehicle manufacturing bases, striving to achieve local manufacturing, local sales, and local services.
Unswervingly focus on innovation and accelerate the implementation of innovative strategic projects. Based on the concept of “scenarios create value, software defines cars, and data determines experience”, the company accelerates the enhancement of its competitive advantage in the core technology field of electric intelligent connectivity. In terms of “strong heart”, the company will take the lead in mass production and loading of semi-solid state batteries. The energy density will be increased by more than 50%, the battery cost will be reduced by more than 10%, the battery life can reach more than 1000 kilometers, and the performance is safer and more reliable. In terms of the “smart brain”, starting in 2024, SAIC Motor's full-stack 3.0 intelligent solution will be implemented step by step. The new product will halve the number of controllers, increase data bandwidth by 5 times, reduce wire length by 30%, and increase OTA speed by 70% through domain fusion technology. In terms of “agile body”, the company's pioneering vehicle central collaborative motion control platform (VMC) has achieved functions such as “wire-controlled steering and crab movement”, and will gradually be mass-produced and implemented from 2024.
Promote the strength of independent brands and accelerate the transformation of joint ventures into new energy sources. Sales of new products such as the Zhiji LS6 and Roewe D7 increased rapidly after they were launched, and became popular items in the market segment; SAIC Volkswagen ID.3 adjusted its marketing strategy and sold more than 10,000 for 4 consecutive months, becoming the “joint venture pure electric sales champion”; SAIC-GM launched the Buick Blue 6 Series 430 km battery life version and the E5 Pioneer Edition to accelerate the increase in brand volume in the new energy vehicle market; SAIC-GM-GM-Wuling Bingguang and Starlight are already in the first segment of the market segment. The third-generation “Macaron” helped further consolidate the Hongguang MINI series In the global small and micro electric vehicle market With its leading position, in 2023, the company's sales of new energy passenger vehicles worth 150,000 yuan or more reached 43.6%, an increase of 19.2 percentage points over 2022. By actively optimizing the production and marketing structure, the company not only continued to increase its vehicle sales from quarter to quarter, but also achieved a steady year-on-year increase in revenue.
Maintain an “overweight” investment rating. The company firmly grasps the strategic direction of innovation and transformation, actively grasps the pace of market recovery and structural growth opportunities, promotes the development of the company's own brands, strengthens the results of the transformation of joint ventures, and continues to accelerate the transformation of growth momentum. The company's net profit for 24-26 is estimated to be RMB 151.7/163.4/17.68 billion yuan respectively, maintaining the “increase in holdings” investment rating.
Risk warning: the risk that price competition in the domestic industry will continue to be fierce; the risk that some overseas regional markets will implement trade protection measures; the risk that the pace of recovery in domestic automobile consumer demand is uncertain, etc.