Yutong Bus Co.Ltd(600066) (600066)
Event: the company announced that 3000 passenger cars were sold in November, a year-on-year decrease of 34.31% and a month on month increase of 33.81%.
The sales volume in November was 3000, basically in line with expectations. In November, the company sold 3000 passenger cars. Affected by the traditional peak season and the continuous decline of new energy subsidies in 2022, it increased by 33.81% month on month, including 1530 new energy passenger cars sold this month, a significant increase of 91.25% month on month and a year-on-year decrease of 30.45%; 1470 main traditional buses were sold, close to October, with a year-on-year decrease of 37.90%. In terms of models, 1237, 1194 and 569 large, medium and light passenger cars were sold this month, down 58.79%, 15.36% and 32.94% month on month and 32.81%, 38.42% and 27.70% year-on-year respectively.
The public transport market has not yet recovered, and the industry demand is mainly highway. Affected by the repeated epidemic and limited government procurement budget, China's public transport market has not warmed up as of November 2021. According to traffic compulsory insurance, from January to October 2021, only 23205 large buses were insured, with a year-on-year decrease of 33.2%. The industry demand was mainly restored to roads, and 31101 medium and large highway vehicles were insured, with a year-on-year increase of 37.1%, ending the decline for four consecutive years since 2017. In the long run, the public transport market belongs to people's livelihood business, and the recovery of demand is a deterministic trend.
Q4 performance or short-term pressure, and it is expected to continue to repair in 2022. From October to November, the total sales volume was 5242, with a year-on-year decrease of 36.14%. The proportion of new energy sales and large and medium-sized customers were 44.45% and 80.98% respectively, with a year-on-year decrease of 5.50% and 1.89% respectively. Considering that the subsidy for new energy passenger cars will continue to decline in 2022, and the delivery of Q3 orders affected by the shipping price rise and the shortage of freight resources will be delayed to Q4, we predict that the passenger car sales in December may increase to a level close to the same period last year, and the total volume and structure of Q4 sales may lead to short-term pressure on the performance. Looking forward to 2022, 1) roads: benefit from enhanced vaccination and government epidemic prevention, and tourism and public transport travel are expected to continue to recover; 2) Public transport: 2022 is the last window period for subsidies for new energy buses. The demand from 2020 to 2021 may be postponed to 2022 due to the epidemic and the suppressed government budget.
In the medium and long term, new products and new markets are expected to open up growth space. 1) Fuel cell vehicle: fuel cell is one of the key development directions of the country. At present, the first batch of fuel cell vehicle demonstration urban agglomeration has been put into operation. With the continuous implementation of favorable policies for fuel cell, fuel cell bus, as one of the company's advantageous products, has high single vehicle price and is expected to become a new source of profit; 2) Intelligent driving: L3 bus and L4 self driving bus Xiaoyu 2.0 have been demonstrated and operated in many places respectively. With the landing and expansion of subsequent projects, it is expected to gradually contribute profits; 3) Overseas: the company actively distributes high-end products and develops overseas markets. Overseas exports are getting better and better in 2021, which is expected to open up new growth space in the future.
Investment suggestion: the company is the leader in China's bus industry, with an absolute leading market share. Affected by the epidemic and the industry recession, the company has been at the bottom of fundamentals since 2020. In the short term, the company is expected to benefit from the recovery of industry demand. In the medium and long term, RV, intelligent driving, fuel cell vehicle and export will usher in development opportunities and are expected to become a new growth point. We estimate that the net profit attributable to the parent company from 2021 to 2023 will be RMB 1.084 billion, RMB 1.706 billion and RMB 2.247 billion respectively. Corresponding to the current market value, PE will be 23.1, 14.7 and 11.1 times respectively, maintaining the "overweight-a" rating, and the six-month target price will be RMB 17.40/share.
Risk warning: global epidemic out of control risk; The risk of continuous shrinkage of highway market; The marketization degree of new energy public transport is lower than the expected risk; The implementation effect of fuel cell policy is less than the expected risk.
