Recently, domestic electric vehicle leader BYD (002594.SZ) handed over the third-quarter performance report for 2018. After deducting non-recurring gains and losses such as government subsidies and selling assets, the net profit attributable to shareholders of listed companies in the first three quarters was 165 million yuan, a year-on-year decline. 108.38%, the lowest since 2015; the company's sales gross margin in the first three quarters was only 16.43%, lower than the 17.74% to 21.08% in the same period of 2015-2017.
In addition, BYD's accounts receivable amounted to 54.6 billion yuan, which has remained at a high level since 2016.
After the semi-annual report of BYD, the Shenzhen Stock Exchange issued a letter of inquiry, asking for a sharp drop in net profit, whether it is dependent on government subsidies, a large deviation between product sales and operating income, and a surge in receivables. In early November, BYD responded to the above questions. Judging from the current three quarterly reports, these problems have not improved significantly.
Inquiries from the Shenzhen Stock Exchange: Does BYD rely on government subsidies?
There are 11 passenger car listed companies in the A-share market. In the first three quarters of this year, five companies owned the listed company's shareholders with a net profit of over RMB 1 billion. Among them, Great Wall Motor (601633.SH), SAIC Group (600104.SH) and Guangzhou Automobile Group (601238.SH) increased net profit by 10% to 36% during the same period, and Changan Automobile (000625.SZ) decreased by 80%. The net profit of BYD's shareholders at the listed company decreased by 45.3% year-on-year, and the profit was 1.527 billion yuan. The profit decline was second only to Changan Automobile.
However, after deducting non-recurring gains and losses (government subsidy 1.452 billion yuan, selling assets disposal subsidiary 403 million yuan), BYD's net profit attributable to shareholders of listed companies fell 108.38% year-on-year, with a loss of 165 million yuan, surpassing Changan Automobile. The first drop in the indicator.
The last time such a loss was three years ago. In 2014, after deducting non-recurring gains and losses, BYD's net profit attributable to shareholders of listed companies in the first three quarters was 390 million yuan, of which the loss in the third quarter was 438 million yuan, which was the source of accumulated net profit loss. To make matters worse, the loss situation did not reverse in the fourth quarter. In the fourth quarter of the year, the company continued to lose 287 million yuan, resulting in a loss of 677 million yuan for the whole year. In the bull market that started in July 2014, the company's fourth-quarter share price fell 22.19% against the trend.
In the first half of this year, BYD received a government subsidy of 894 million yuan, accounting for 77.63% of non-recurring gains and losses. If there is no government subsidy, BYD's net profit attributable to shareholders of the listed company will be a loss of 415 million yuan. The Shenzhen Stock Exchange has explicitly stated whether the company "depends on non-recurring gains and losses such as government subsidies."
According to BYD, from 2013 to 2017, the total amount of government subsidies received reached 4.043 billion yuan. In the annual view, the government subsidy was 6.7 billion yuan in 2013, and it will increase year by year. In 2017, it will reach 1.276 billion yuan. In the first three quarters of this year, it has been 13.79% more than last year (in the first half of the year, 894 million yuan, and the third quarter was 558 million yuan).
Among the five new energy vehicle companies that have been listed, the amount of government subsidies received in the first three quarters of this year are: Jianghuai Automobile (600418.SH) 1.028 billion yuan, Guangzhou Automobile Group 545 million yuan, Beiqi Blue Valley (600733.SH, Beiqi New Energy Backdoor) Listing) 9.65 million yuan. Geely Automobile (175.HK), which only publishes the semi-annual report, has received 692 million yuan in the first half of the year. In absolute terms, BYD received the most government subsidies.
Accounts receivable remains high
At the end of the third quarter of this year, the ending balance of BYD's bills receivable and accounts receivable was 60.6 billion yuan, which was lower than the previous year's 61.8 billion yuan, but it remained high.
Compare with the same industry. Among the top five passenger car companies, Changan Automobile and Guangzhou Automobile Group's closing balances of notes and accounts receivable for the same period were 18.8 billion yuan and 4.4 billion yuan respectively. Compared with the ending balance of BYD's bills receivable and accounts receivable, only SAIC Group is 67 billion yuan.
On the scale of production and the scale of total assets, SAIC Group is far higher than BYD. In the first three quarters of this year, SAIC Motor sold 5.147 million vehicles, which is more than 10 times higher than BYD's 351,500 vehicles; SAIC Group's total assets were 734.3 billion yuan, and BYD only 192.1 billion yuan.
At the end of the third quarter, BYD's accounts receivable amounted to 54.6 billion yuan, and the accounts receivable for three years continued to be high. The company's accounts receivable surged in 2016. Prior to 2014 and 2015, the company's accounts receivable balance was 13.8 billion yuan and 21.5 billion yuan respectively. At the end of 2016, BYD's accounts receivable balance doubled to 41.7 billion yuan, while its net profit was only 5.052 billion yuan.
The most popular understanding is that the profits earned by the company this year have not become cash flow to the company's accounts, but new debts that have not been recovered.
This situation in 2017 has not been reversed. At the end of 2017, BYD's accounts receivable balance was 51.8 billion yuan.
For the balance of accounts receivable is too high, BYD's explanation is that the new energy vehicle subsidy funds are slowly returned, and the company provides a certain loose sales account period policy for the new energy commercial vehicle business. “For the whole vehicle sales of new energy vehicles, the credit period for the company's major customers is usually 30 days to 360 days, or provide customers with one to two years of installment payment.â€
It is noteworthy that BYD's first debtor is the company's related party, Guangzhou Guangqi BYD New Energy Bus Co., Ltd. The balance of accounts receivable in the first half of this year was 7.9 billion yuan, accounting for 13.62% of the total.
BYD has stated that the longer accounts receivable in the accounts receivable balance are mainly the accounts receivable corresponding to the sales bus in 2017. For this part of the accounts receivable, the bus company has signed a leasing plan with the leasing company, but the financing process Due to the influence of many process approvals such as bank credit, vehicle cargo mortgage and the cooperation of the bus company with the leasing company for the first time, the leasing company's lending is slow. "If the company's credit management to customers is not good enough, the collection is not enough, or the credit problems of major customers, it may bring certain receivables risk to the company, affecting the company's financial status and operating results."
BYD accepted an interview with the reporter of China Economic Weekly, saying that the company clearly defined the responsibility for the collection and management of accounts receivable, and conducted a single test by knowing the industry index corresponding to each receivable, the financial ability of customers, whether there are disputes and other information, and Provision for bad debts is made for the existence of objective evidence that the expected future cash flows are uncollectible. By setting different credit policies and expected loss rates for different businesses, and strictly complying with the assessment judgment method and accrual steps. The company believes that the bad debt provision for accounts receivable has been fully accrued. As new energy vehicle revenues and earnings continue to grow, the company's cash inflows increase. In the future, the company will further optimize the cost structure according to the company's operating conditions and development needs.
Gross profit margin declines significantly
From the gross profit index, among the top five passenger car listed companies, Changan Automobile is higher than last year. SAIC and Great Wall Motor are basically close to the previous two years. Guangzhou Automobile Group is higher than 2016. Only BYD, the gross profit margin of sales in the first three quarters of this year was 16.43%, down 3.43 percentage points year-on-year. After maintaining three consecutive high sales gross margins in 2015-2017, it returned to the 2014 low.
The decline in gross profit margins was due to increased costs, such as raw material costs and labor costs. From the three quarterly reports, BYD's employee compensation has not changed much, and the operating cost has increased by 15.1 billion yuan.
In the first half of the year, BYD's operating costs increased by 26.87% year-on-year to 9.6 billion yuan. At that time, the company explained that "mainly due to the growth of the automotive business."
In the first half of this year, the gross profit margin of BYD's auto business decreased by 7.87 percentage points to 18.75% from 26.62% in the same period last year.
Insiders analyzed that the most important reason for the above problems should be that the state has adjusted the subsidy policy for new energy vehicles.
The new subsidy policy sets the transition period from February 12th to June 11th, 2018. During this period, new energy passenger cars and new energy buses will be subsidized according to 70% of the 2017 subsidy standard. From June 12, 2018, reduce or cancel subsidies for new energy vehicles with low cruising range and low technical indicators. Higher subsidies for new energy vehicles with longer cruising range and higher energy density.
In the first half of this year, BYD's new energy vehicle sales increased by 121.06%, but it failed to offset the reduction in subsidies caused by policy adjustments.
At the same time, the company's interest-bearing liabilities increased. In the first half of this year, BYD's interest-bearing liabilities increased by 26% year-on-year to 68.9 billion yuan, and interest paid increased by 390 million yuan, an increase of 37%, resulting in an increase of nearly 40% in financial expenses.
The reduction in subsidies led to a decrease in income, the increase in raw material prices and the increase in financial costs, which have affected the gross profit margin of BYD's automotive business.
In the first three quarters, BYD's operating income increased by 20%. In the same period, it produced 143,400 new energy vehicles and 208,200 fuel vehicles, totaling 351,600.
Shenzhen Stock Exchange asked BYD. In the first half of the year, the company's new energy vehicle sales increased by 106% year-on-year, while operating income increased by only 20.23% year-on-year. It required the company to combine the factors such as gross profit margin, cost and cost of new energy vehicles to explain "product sales and business." The reason for the large deviation in income."
BYD explained that in addition to the changes in subsidies for new energy vehicles, the company promoted the price-price process of new energy vehicles for traditional fuel vehicles and promoted the sales of new energy vehicles in non-restricted cities, resulting in a significant increase in sales volume and a slight decline in prices.
The so-called parity process refers to the fact that after considering the purchase cost, operating cost and finally the total cost of ownership of the car, the new energy vehicle will fall to the level equivalent to the fuel vehicle cost, so that it can have real market competitiveness after the financial subsidy exits. Oil level price.
According to BYD's forecast, the company's total net profit this year fell 23.10% to 32.94%, about 2.72 billion yuan to 3.127 billion yuan (Editor's Note: 2017: 4.066 billion yuan).
For the future performance of the company, BYD responded to an interview with China Economic Weekly: With the launch of several models, BYD's auto business will usher in a new round of growth cycle. It is expected that the new energy automobile business will continue to maintain a rapid growth momentum, and the rapid growth of sales volume and the continuous enhancement of brand influence will be achieved under the leadership of new models. At the same time, it is expected that the profitability of BYD's new energy vehicles will be significantly improved.
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