SAIC's 2020 net profit is expected to be 20 billion, a year-on-year decrease of 21.89%
In the first half of 2020, affected by the 'black swan' of the epidemic and the downturn of the auto market, my country's auto market once pressed the 'pause button.' After entering the second half of the year, with the introduction of a series of new policies to promote auto consumption, the auto market showed signs of recovery. The market continued to improve. The production and sales of many auto companies rose against the trend, and it is expected to complete the expected target for 2020.
SAIC's 2020 annual performance forecast. Picture source: Flushing
On January 11, Shanghai Automotive Group Co., Ltd. (hereinafter referred to as SAIC Motor, stock code 600104) announced its 2020 annual results forecast. It is estimated that in 2020, the net profit attributable to shareholders of listed companies will be about 20 billion yuan, which will decrease by about 5.6 billion yuan compared with the same period of the previous year, a decrease of about 21.89% year-on-year.
The announcement shows that the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses is about 17.3 billion yuan, which will decrease by about 4.3 billion yuan compared with the same period last year, a decrease of about 19.84% year-on-year.
As for the reasons for the decline in performance, SAIC Motor explained that the impact of the epidemic has increased the company's business challenges. In 2020, the sales of 5.6 million vehicles, a year-on-year decrease of more than 10%.
Industry insiders believe that in addition to the cause of the epidemic, the new round of chip supply shortages will also affect the pace of car production in China's auto companies. In addition, some companies will also face the risk of production interruption, which may continue until the end of 2021.
In this regard, Cui Dongshu, secretary-general of the Association of Passenger Transport Association, believes that the shortage of chip supply has brought a series of impacts on car companies such as Volkswagen. The main reason for the shortage of car-making chips is that after the market recovers, people's demand for electronic consumer products has also increased, and car companies may encounter problems such as supply difficulties in the process of competing with electronic consumer products for chips. At present, it will take some time for the chip shortage problem to be corrected.
Cui Dongshu also mentioned that in December 2020, the overall trend of various auto companies is stable, and a 'good start' increase is reserved for January. Moreover, during the period before the Spring Festival, independent brands' Sales are relatively hot, and overall, the supply relationship will not be affected much in the short term.
In addition, SAIC Volkswagen’s sales have been declining for 12 consecutive months, which has also dragged down SAIC’s overall performance to a certain extent. The aforementioned industry insiders believe that at the end of 2019, SAIC Volkswagen's main force-the B-class model Passat crash test and the long product launch period are the main reasons for the decline in its sales.
It is worth noting that after the release of the '2020 Annual Performance ForecastAccording to the forecast made by Soochow Securities, from the perspective of the overall environment, SAIC, as a leading company in the automotive industry, is expected to follow the industry cycle. It is expected that the net profit of SAIC attributable to the parent will increase in 2020-2022. In addition, Soochow Securities also mentioned that based on the Volkswagen MEB platform, the sales of ID.4, the first pure electric model in China, will become an important highlight.
In this regard, Cui Dongshu said that the epidemic has had a significant impact on the auto market, and the entire auto industry has been greatly affected. In this context, SAIC's year-on-year decrease was only 20%, which is a very good result. He believes that China's auto market will show a 'V-shaped' reversal trend in 2020, and the decline in passenger cars for the whole year is better than expected.
