AutoBeta(AutoBeta.net)05/29 Report--

According to the bond 2020 annual report released by Wuhu Construction Investment Co., Ltd., Chery Automobile Co., Ltd. sold 449000 cars in 2020, but the net profit for the whole year was only 7.3718 million yuan. that means the net profit per car is only 16.4 yuan.

Data show that Wuhu Construction Investment is the major shareholder of Chery Automobile and its parent company Chery Holdings Group Co., Ltd. (hereinafter referred to as "Chery Holdings"). According to a report released by Wuhu Construction Investment, Chery's revenue in 2020 was 34.762 billion yuan, up slightly from 2019, and its net profit was 7.3718 million yuan, down 98 percent from 392 million yuan in 2019. Chery Holdings had revenue of 25.372 billion yuan in 2020 and a net profit of 1.168 billion yuan, an increase of 131 million yuan from 1.037 billion yuan in 2019, but down 50 million yuan from 1.216 billion yuan in 2018.

It is worth mentioning that according to the 2020 annual report released by Chery Huiyin Automotive Finance Co., Ltd., Chery Huiyin achieved operating income of 2.032 billion yuan and net profit of 773 million yuan in 2020. It can be seen that without the profit contribution of Chery Huiyin, Chery's net profit would be even less in 2020. At the end of 2020, the total liabilities of Chery Automobile and Chery Holdings reached 69.36 billion yuan and 62.05 billion yuan, respectively.

In September 2020, Chery Automobile and Chery Holdings completed the "mixed reform". With the entry of new shareholders, the market performance of Chery Automobile has attracted more attention. However, in terms of revenue performance, although Chery achieved an increase of 3.6 billion yuan in revenue in 2020 compared with 2019, its net profit fell sharply, and the profit of more than 7 million was relatively low in both the net profit margin and the total profit margin for the entire automobile industry.

Judging from the cumulative sales of various models in Chery last year, the Ruihu series sold a total of 323537 vehicles last year. It is understood that the price range of Ruihu series models is 46900-159900 yuan, of which many models are priced within 100000 yuan. In 2018, Chery launched the high-end brand Xingtu, but its current market performance is far from that of Lecker and WEY in the same period. According to public data, Xingtu's terminal sales totaled 5746 vehicles from January to March, Lectra sold more than 53000 vehicles from January to March, and the WEY brand sold nearly 26000 vehicles in the same period.

In fact, Chery's performance has not been very good. In 2014, Chery Chairman Yin Tongyue said that Chery made a profit for the first time in 10 years. Since then, Chery Jaguar Land Rover, jointly formed by Chery and Jaguar Land Rover, has brought better earnings performance for Chery. Data show that Chery received cash dividends of 585 million yuan, 466 million yuan and 1.535 billion yuan from Chery Jaguar Land Rover from 2016 to 2018, respectively. However, after entering 2018, Jaguar Land Rover's performance in the Chinese market is also declining.

At present, Chery mainly relies on the Chery brand, especially the Ruihu 8 model, which has a strong performance in the market. However, for Chery, what is really worrying is not the change in the overall sales scale, but in the product structure, Chery does not have a hit-resistant main product. According to Chery's plan, after the completion of the mixed reform, Chery's next step is to speed up the listing. However, IPO has a certain assessment of the profitability of enterprises, so Chery needs to improve its profitability if it wants to successfully complete its listing in the future. And in the face of the rise of new forces, Chery has made no achievements in the field of high-end electric vehicles but only in the field of entry-level electric vehicles. Chery needs to catch up if it wants to have a place in the domestic new energy market.

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