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A few days ago, Changan Automobile released its 2024 interim results report. According to the financial report, the operating income of Changan Automobile in the first half of 2024 was 6.723 billion yuan, an increase of 17.15% over the same period last year; the net profit belonging to shareholders of listed companies was 2.832 billion yuan, down 63.00% from the same period last year; the net profit belonging to shareholders of listed companies after deducting non-recurrent profits and losses was 1.169 billion yuan, down 5.89% from the same period last year. During the reporting period, the total non-recurrent profit and loss of Changan Automobile was 1.663 billion yuan, of which the government subsidy included in the current profit and loss was 1.471 billion yuan.

Sales volume is the main reason for the increase in operating income. In the first half of the year, Changan Automobile sold a total of 1.334 million vehicles, an increase of 9.7% over the same period last year, reaching a semi-annual high in the past seven years. Of these, new energy sales of independent brands were 299000, up 69.9% from the same period last year; overseas sales of independent brands were 203000, up 74.9% from the same period last year; however, high sales pushed up revenue, while profits fell sharply by 63.00%, Changan Automobile said. mainly due to the acquisition of Deep Blue in the first quarter of 2023, a non-recurrent profit and loss of 5.021 billion yuan was confirmed. After excluding the impact, Changan automobile deduction non-net profit fell 5.89% in the first half of the year compared with the same period last year. At the same time, although sales have increased, they are not as profitable as they used to be. The gross profit margin of Changan Automobile in the first half of the year was 13.8%, down 2.54 percentage points from the same period. Some analysts pointed out that the decline in gross profit margin was due to the decline in the company's share of fuel vehicles and the loss of new energy vehicle brands in the context of the industry price war.

At present, Changan Automobile mainly operates new energy brands including Deep Blue Automobile and Avita Technology, but the financial performance of these two companies is still mixed. The sales revenue of Deep Blue Automobile and Avita has increased significantly, and the loss has also narrowed, but it is still in a state of loss, which means that Deep Blue Automobile and Avita still need to rely on the parent company "blood transfusion."

According to the financial report, the revenue of Deep Blue Automobile in the first half of 2024 was 13.981 billion yuan, with a net loss of 739 million yuan, with a loss of 320 million yuan in the same period, while Avita's revenue was 6.152 billion yuan and a net loss of 1.395 billion yuan, a loss of 360 million yuan compared with the same period. Changan said that due to the improvement of product structure, Deep Blue Automobile has reduced its profit and loss compared with the same period last year, while Avita has benefited from the gradual enrichment of the product line, improved product efficiency and reduced profit and loss compared with the same period last year.

Figures show that deep blue car sales in the first half of the year were 71000, up 73.6 per cent from a year earlier. Deng Chenghao, general manager of Deep Blue Automobile, said during the 2024 Chengdu Auto Show that he could make a profit if he sold more than 30, 000 cars a month. At present, relying on the support of Changan, Shenzhen Blue operates in the form of "light assets" in factories and channels, and 90% of its distribution stores have made a profit.

As for Avita, although its market size is not as large as that of Deep Blue, it delivered 21000 vehicles in the first half of the year, double that of the same period. Recently, Avita decided to enter the hybrid market, through pure electricity + hybrid power layout to expand sales scale. At the same time, Avita spent 11.5 billion yuan to buy a 10% stake in Huawei Watch, a move that will strengthen the link between Avita and Huawei and take advantage of the latter's technological awareness in the minds of consumers, thereby boosting brand tenure and brand sales.

According to the Changan Automobile Plan, the sales target of Changan New Energy in 2024 is 750000 vehicles, while the full-year targets of Changan Qiyuan, Deep Blue Automobile and Avita are 250000, 280000 and 90, 000 respectively. From the point of view of known sales, as of the end of August, the target completion rate of the above brands is less than 40%, and the sales pressure is huge. To this end, Changan Automobile will continue to develop the new energy vehicle market in the second half of the year, with the launch of Qiyuan E07, Deep Blue S05, Deep Blue L07, Avita 07, the fourth generation CS75PLUS and other new and modified models.

As for joint venture brands, Changan Ford sold 111600 vehicles in the first half, up 13.36 per cent from a year earlier, while Changan Mazda sold 36800 vehicles, up 14.44 per cent from a year earlier. Although the joint venture brand is no longer the "profit cow" of Changan Automobile, Changan Ford still contributed 1.821 billion yuan of profit to Changan Automobile, an increase of 127.86% over the same period last year, and still brought 619 million yuan of investment income to Changan Automobile.

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