\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 238 Guangzhou Automobile Group Co.Ltd(601238) )
Event: Recently, Guangzhou Automobile Group Co.Ltd(601238) released its 2021 annual report. The company achieved a total operating revenue of 75.68 billion yuan, an increase of 19.8%, and a net profit attributable to the parent company of 7.33 billion yuan, an increase of 22.14%. The comments are as follows:
The path to improve the operation of the company's independent sector: if the operating profit minus investment income and other income is approximately regarded as the pre tax operating performance of the independent sector, the independent sector is expected to lose 5.67 billion yuan in 2021, with no improvement compared with 2020. We think there are two reasons. First, due to the lack of core, the sales volume of the company's high-value models did not rise significantly as scheduled. In 2021, trumpchi sold 324000 vehicles, an increase of only 10.3%. Trumpchi M8, trumpchi shadow leopard, gs8 and other high-value models are seriously restricted by the chip and have not contributed significant increment. Second, the rise of variable costs offsets the scale effect. Under the high growth of ei'an in 2021, GAC achieved 25.8% growth, but the scale effect was greatly weakened by the continuous rise of raw materials throughout the year.
In terms of quarterly changes, the gross profit margin of 2021q4 is 10.27%, which is better than 7.89% of Q3 and 9.44% of 2020q4. We believe that the independent sector of the company is in the trend of improvement, and the operating performance of the independent sector of the company will continue to improve in the following aspects in 2022:
The scale effect brought by the company's high fixed cost and expenditure will appear: with the increase of sales volume, the fixed cost borne by single vehicle will decrease significantly. The embodiment of scale effect is approximately analyzed by the depreciation of fixed assets, amortization of intangible assets, amortization of use right assets, asset impairment (mainly the impairment of patented technology in intangible assets). The company's depreciation + amortization + impairment totaled RMB 6.507 billion in 2021. From 2019 to 2021, the growth rate of this value was 45.4%, 24.5% and 9.5% respectively. The overall growth rate of fixed expenditure decreased significantly. From 2019 to 2021, the fixed cost and expenditure borne by single vehicle are 12412 yuan, 16814 yuan and 14644 yuan respectively, a decrease of 12.9% in 2021. (see Appendix for chart). The growth rate of fixed costs such as depreciation and amortization of the company tends to be stable, while the independent sector (trumpchi + ai'an) is in the cycle of sales volume rise. We expect that in 2022, GAC motor is expected to hit the sales volume of 400000 + and ai'an is expected to hit the sales target of 300000. The scale effect brought by high fixed costs will help the recovery of the performance of the independent sector.
Increase in the average price of a single car: according to the annual report, the average price of the company's passenger cars in 2021 was 110700 yuan, an increase of 3.1%, and the average prices from 2019 to 2020 were 93700 yuan and 107400 yuan respectively. The increase in the average price of products is brought about by the upgrading of the company's product structure. With the hot sales of high-value products such as M8, M6 and the second generation gs8, the listing of upgraded models such as Yingbao HEV and yingku in 2022 will continue to drive the increase of the average price of GAC motor brand. From 2021, AIAN brand has successively launched the plus version of existing models, which is accompanied by the increase of price. The average price of a single car has an obvious upward trend.
Improvement of expense rate during the period: including tax and surcharges, management expense rate, sales expense rate and R & D expense rate. The above tax rate of the company was 14.6% in 2021, down 2.4 percentage points from 17.0% in 2018, of which the sales expense rate decreased by 1.3 percentage points. In the future, the rapid increase of the company's income will also lead to the decline of the expense rate.
The growth of the joint venture sector accelerated: the company's investment income from joint ventures reached RMB 11.404 billion in 2021, an increase of 19.2%, and the growth rates from 2018 to 2020 were 6.2%, 7.4% and 1.8% respectively. We expect that from 2022 to 2024, the growth rate of the company's joint venture investment income will enter a "double-digit" era. The acceleration is mainly due to the continuous development of new products and new production capacity of Liangtian and the loss reduction of Guangzhou Mitsubishi and Fick. The average price and net profit margin of GAC Toyota increased steadily in 2021. The average price of single vehicle in 2021 was 1.564 billion yuan, an increase of 8.0%. We expect the net profit margin to rise to 11.57%. GAC Honda's average price is basically flat and its profitability has improved. We expect the net profit margin of GAC Honda to increase to 7.4%.
The company's profit forecast and investment rating: in 2021, Guangzhou Automobile Group Co.Ltd(601238) will still maintain more than 5 billion R & D investment. The R & D and reserve of new technologies (electrification and intelligence) are the key guarantee for Guangzhou Automobile Group Co.Ltd(601238) to realize product upgrading and maintain product competitiveness. The company continues to deepen organizational reform and stimulate organizational vitality. We are still optimistic about the improvement prospects of the company's independent sector and the growth rate of the joint venture sector. We expect the net profit of the company from 2022 to 2024 to be RMB 12.03 billion, RMB 15.37 billion and RMB 18.43 billion respectively, corresponding to EPS of RMB 115, RMB 147 and RMB 176. According to the closing prices of a and h on April 1, 2022, the PE of GAC A shares are 10, 8 and 6 times respectively, and the PE of GAC H shares are 5, 4 and 3 times respectively, maintaining the "strongly recommended" rating of GAC A and GAC H shares.
Risk tip: the industry demand is sluggish, the company's new models are less than expected, the development of new energy vehicles is less than expected, and the price rise of raw materials is higher than expected.
