AutoBeta(AutoBeta.net)04/29 Report--

On the evening of April 28, BYD released its first-quarter 2020 results. According to the report, the operating income in the first quarter of 2020 was 19.678 billion yuan, down 35.1 percent from 30.304 billion yuan in the same period in 2019, and the net profit belonging to shareholders of listed companies was 113 million yuan, down 85 percent from 750 million yuan in the same period in 2019. The net profit after deducting non-recurrent profit and loss is-471.7 million yuan, that is, a loss of more than 400 million yuan. According to the financial report, BYD received 533 million yuan in car-related government subsidies in the first quarter.

For both revenue and profit decline, BYD said in the financial report that the impact of the COVID-19 epidemic and a sharp decline in new energy vehicle sales have affected the company's automobile business in the first quarter.

For the future outlook, BYD said it expected sales revenue of new energy vehicles to come out of the trough in the second quarter, leading the group to achieve revenue growth. In terms of fuel vehicle business, driven by hot-selling models such as Song pro, sales are also expected to achieve good performance, and related business is expected to bring new growth space for the group's revenue and profits.

According to the sales report released by BYD, car sales in March were 30599, down 34.7% from the same period last year, including 12256 new energy vehicles, down 59.2% from the same period last year. Cumulative sales from January to March 2020 were 61273, down 47.9% from the same period last year, including 22192 new energy vehicles, down 69.7% from the same period last year. The decline of new energy vehicles is greater than that of fuel vehicles.

BYD is mainly engaged in three major businesses, including automotive business, including new energy vehicles and traditional fuel vehicles, mobile phone components and assembly business, rechargeable batteries and photovoltaic business. According to BYD's previously disclosed 2019 performance, car-related products and mobile phone parts and assemblies became the main sources of income, accounting for 41.79% and 49.53% of the group's total revenue, respectively.

Due to the increasing decline of new energy subsidies and the early implementation of the sixth national standard in some cities, the sales of new energy vehicles in China are negative for the first time. Since June 2019, sales of new energy vehicles have declined for three consecutive quarters and have been affected by the epidemic to a freezing point. As the leader of domestic new energy vehicles, BYD's sales of new energy vehicles have also declined compared with the same period last year.

In 2020, BYD launched a series of actions to accelerate its expansion while saving the damage caused by the epidemic. Including the establishment of Fudi series company, the smooth landing of the joint venture with Toyota, BYD semiconductor company to increase capital and shares and seek an independent listing, the new model BYD Han and the launch of blade batteries, and so on. It is understood that BYD's first blade battery is expected to bring a cost reduction of about 10,000 yuan. The battery, which is first launched with BYD EV, will go on sale around June this year. BYD hopes that Han models will become a new engine for passenger car business growth.

China International Capital Corporation said that due to the higher-than-expected decline in sales of new energy vehicles after the decline of subsidies, coupled with the fact that the epidemic has had a substantial impact on sales of new energy vehicles, BYD's profit forecast for 2020 has been lowered by 20.5% to 1.4 billion yuan. The bank also said it is optimistic about BYD blade battery technology, which will expand the application of iron-lithium batteries to A-class cars and higher-level markets.

At present, with the improvement of the domestic situation, the resumption of work and production of domestic car companies has basically reached the level before the epidemic. With the landing of the subsidy policy for new energy vehicles in 2020, while welcoming the return of subsidies, BYD's car sales may rebound. But the basic stagnation of BYD's auto business in February brought it irreversible losses, which will have a significant impact on its performance in 2020.

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