Incident: SAIC Motor Group released April 2024 production and sales report: the Group's wholesale sales volume in April was 360,000 units, -3.7% YoY, -5.6%; 2024M1-4 Group's cumulative wholesale sales volume was 1.194 million units, -5.6% YoY; SAIC-Volkswagen in April sold 92,000 vehicles, +4.2% YoY; 2024M1-4 sold 340,000 vehicles, +8.1% YoY; SAIC-GM sold 50,000 vehicles in April, -37.9% YoY; 2024 M1-4 sold a total of 1.61 million units, or -39.4%; SAIC passenger cars sold 63,000 units in April, -7.2% YoY, -19.9%; 2024 M1-4 sold 226,000 units, -14.7% YoY; SAIC-GM-Wuling sold 123,000 units in April, +16.8% YoY, +7.9%; 2024 M1-4 sold 347,000 vehicles, +16.5% YoY.
Joint venture sales picked up, and Volkswagen and Wuling performed well. SAIC Motor sold 360,000 vehicles in April. Sales declined month-on-month due to consumer wait-and-see sentiment. By brand, SAIC Volkswagen and SAIC-GM-Wuling performed well in April, with wholesale sales +2.2%/+7.9% month-on-month respectively. On the structural side, sales of new energy passenger vehicles in April were 75,000 units, +9.3% year over year, -12.1% month on month; cumulative sales of the 2024M1-4 were 285,000 units, +35.4% year on year. SAIC Roewe D7 DMH continues to be popular. Volkswagen ID, GM, and GM Wuling sold more than 10,000 units, 90,000 units, and 40,000 new energy vehicles respectively in April. The Roewe D7 and Wuling Starlight positioned the 10-150,000 yuan hybrid sedan, successfully achieving a breakthrough, and the market performance was good.
Zhiji L6 will go public and break through the high-end market again. In April 2024, Zhiji sold 3,000 units, and the 2024M1-4 sold a cumulative total of 13,001 units. Affected by increased competition in the 20-30,000 yuan price band, LS6's sales performance declined slightly. On April 8, the Zhiji L6 with an ultra-fast charging solid-state battery began pre-sale. The pre-sale price was 23-33,000 yuan. The new car is based on the same quasi-500V/quasi-900V silicon carbide dual platform as the Zhiji LS6. The CLTC has a battery life of over 1,000 km. The entire series is equipped with a digital chassis, four-wheel steering, lidar, Nvidia Orin X chip, and a digital intelligent management center. As of May 10, the new car has received orders for 21,000 units and will be delivered on May 13. The penetration rate of pure electric vehicles in the price range of 200,000 yuan in 2023 is 30.4%. Excluding Tesla, the penetration rate of pure electric vehicles is only 15.2%. There is plenty of room for independent breakthroughs. We believe L6 is expected to seize market share with strong product strength and price advantages.
It continues to be popular overseas, and the world is vast. In April 2024, overseas sales volume was 920,000 units, +2.7% year on year, and 2024M1-4 overseas sales reached 319,000 units, -8.1% year over year. The MG brand continued to perform well in Europe. Subsequently, SAIC Motor will launch 14 new smart electric “global vehicles” in overseas markets, further expanding the overseas product matrix, which is expected to help further increase overseas sales.
Investment suggestions: The company has solid underlying technology, excellent platformization capabilities, and adjusted profit forecasts. It is estimated that 2024-2026 revenue is 7,678/8,023/828 billion yuan, net profit to mother of 154.42/168.50/18.371 billion yuan, corresponding to EPS 1.33/1.46/1.59 yuan, corresponding to the closing price of 14.61 yuan/share on May 10, 2024, PE is 11/10/9 times, respectively, maintaining the “recommendation” ” Ratings.
Risk warning: downside risk in the car market; downside risk of joint venture brands; launch of new electric smart models falling short of expectations; overseas expansion falling short of expectations.