Barring Buffett’s payout reduction, how well is BYD performing in 2022? | Wisdom Research – Wall Street Insights

Tear off the label of growing income but not growing profits, cash flow exceeds 100 billion, and the WORLD, whose product volume is increasing rapidly, is officially sailing

On the evening of March 28, BYD announced its own annual performance for 2022. In 2022, BYDAchieved an operating income of 424.06 billion yuan, a year-on-year increase of 96.2%; net profit attributable to the parent company was 16.622 billion yuan, a year-on-year increase of 445.86%, which is the median value of the company. previous forecast (the forecast was a net profit of 16 billion yuan to 17 billion yuan); the gross profit rate increased from 2021 The 13.02% in the previous year increased by 4.02 percentage points to 17.04%, while the net profit rate reached 4.18%, an increase of 2.34 percentage points year on year.

Among them, in the single quarter of the fourth quarter of 2022, BYD’s operating income reached 156.4 billion yuan, a year-on-year increase of 120.4%, and a month-on-month increase of 33.56%; Interest rates hit 19%, just one step away from the 20% mark.

It is worth noting that Berkshire Hathaway reduced its holdings of BYD once again in February this year, and BYD’s share of H shares has decreased from 13.04% to 12.9% However, considering BYD’s performance in 2022, it is still pretty good oh.

Wall Street Insights and Wisdom Research believes that compared to previous years, BYD’s biggest bright spot in 2022 is that BYD’s previous label of increasing revenue without increasing profit is benefiting from the double increase in sales and product prices new energy vehicles, have completely become history. The quarter-by-quarter growth of annual bicycle profit is approaching the 10,000 yuan mark, which has also led to an effective increase in the gross profit margin.

In addition, the cash flow from operating activities has also continuously improved for four consecutive quarters, exceeding 100 billion yuan for the whole year and reaching 140.8 billion yuan, which is the best in the past six years . Research and development investment has also continued to increase, with a year-on-year increase of 90.31% to 20.2 billion It can be seen that the continuous launch of popular models that have been repeatedly recognized by the market is precisely due to the research and development investments this effective as support.

But this year, BYD will face a new test, that is, under the tragic reorganization of the general price war of the automobile market, whether BYD’s accumulated advantages in automobile market share and increase in single car profits will flash in just the pan, or Are they really sufficient?

1. depressed mobile phone business, booming car business

In terms of specific business divisions, BYD’s business is simply divided into mobile phone business (including mobile phone parts, assembly and electronic product parts, etc.) His one-sentence evaluation is that the mobile phone business is sluggish and the car business is booming.

(1) Mobile phone parts, assembly and other product business

Among them, as the second largest contributor to BYD’s revenue, although BYD’s mobile phone parts, assembly and other product business still have large revenues, it has shown obvious weak growth and regression in gross profit margin, which also makes this business importance is gradually decreasing. In 2022, the operating income of this business will be 98.82 billion yuan, an increase of only 14.3% year on year, the revenue share will decrease from 40% in 2021 to 23.3%, and the gross profit rate will also decrease by 1.52 percentage point to 6.06%.

It is worth noting that in the first half of the year, BYD’s mobile phone business revenue once experienced negative growth (a year-on-year decrease of 4.78%), and its gross profit margin also fell to a historically low 6.08%, which is a stark contrast to the continued high triple-digit growth automotive business. Although the profitability of the mobile phone business has increased in the second half of the year, it is still not as good compared to the historical level of the same period (the gross profit rate from 2018 to 2020 is around 10%).

(2) Automobiles, related products and other products

In 2022, BYD Automobile business operating income will be 324.7 billion yuan, a year-on-year increase of 151.78%, accounting for 76.57% of total revenue (the large increase in the proportion is due to the merger of other businesses), and the gross profit margin increases by 3.69 percentage points to 20.39%. The automotive business will be packaged and added to other businesses with low gross margins such as batteries, photovoltaics and rail transport in 2022 (for reference, the gross margin of batteries is only 11.94% in 2021, other main businesses is 9.31%, and the automotive business is 17.39%) , In other words, the gross profit margin of BYD’s car business could have been higher.

In terms of specific size, in terms of automobiles, Automobile BYD’s sales in 2022 will reach 1.8685 million, a year-on-year increase of 152.46% Automobile BYD’s business revenue growth rate (151.78%) has steadily caught up with the growth rate sales.

The rapid increase in sales means the rapid fermentation of the scale effect, BYD’sDepreciation and amortization of many fixed costs in vehicle manufacturing can be reduced by mass production and sales of automobile products.And given BYD’s previous gradual increase in single car profit and gross profit margin, BYD has also moved from its previous comprehensive focus on land enclosure to expanding the sales volume of car products, and has gradually moved to a position of equal emphasis on profit and scale.

battery,BYD’s cumulative installed capacity in 2022 is about 89.836GWh (including new energy vehicle power batteries and energy storage batteries), and BYD’s domestic power battery market share has broken through the 20% mark to 23.45%, an increase of 7.25 percentage points The power battery market share in the previous three years has made great success (WORLD power battery market share will be 17.28%, 14.9% and 16.2% in 2019, 2020 and 2021, respectively), and even in lead to the leading CATL in 2022. Its market share fell below the 50% mark to 48.2%.

From a global perspective, BYD’s market share has increased significantly from 8.7% in 2021 to 13.6%, which is almost the same as the installed capacity of second place LG.

2. Triple increase in sales volume, bike revenue and profit

Undoubtedly, sales volume is still the first progression to evaluate the strength and status of new energy car companies, and the subsequent revenue growth and profit release are the core driving forces for the subsequent rapid development of new energy car companies. As a leading company in new energy vehicles in China, after completely removing the burden of fuel vehicles in the first quarter of 2022, BYD will start a “hurricane” sales model of new energy vehicles, and sales of fuel vehicles will decline. from the previous level of about 10,000 to a thousand. Finally, it was completely cleared in March.

For the full year 2022, WORLD car sales reached 1.8685 million, a year-on-year increase of 152.46%, surpassing the sales of old rival Tesla (1.31 million for the full year), whose sales of pure electric models include 911,000, an increase over the same period last year 184%; the annual sales volume of plug-in hybrid models was 946,000, an increase of 246.7% over the same period last year. In terms of sales growth rate, the four quarters of 2022 show an annual increase, with an increase of 69,000, 185,000, and 145,000 vehicles respectively. It can be seen that the absolute value of sales and the growth rate of sales have good gold. content.

In terms of single vehicle revenue and single vehicle profit (since BYD did not have a detailed business division in the first and third quarters, it is converted into BYD automobile revenue and profit by removing BYD electronic revenue and profit), four- One vehicle revenue quarter Revenue was 161,000 yuan, 179,000 yuan, 166,000 yuan, and 176,000 yuan, respectively, while BYD bicycle profit in the four quarters was 2,400 yuan, 7,000 yuan, 9,700 yuan, and 9,880 yuan.

Generally speaking, BYD benefited from both January and March price increases at the start of the year, as well as the increase in the share of mid-to-high end models such as the old Han and Tang models , and the gradual. an increase in the number of new models such as Seal and Denza D9 at the end of the third quarter (respectively increased from 1726 and 350 to 6618 and 6216), in subsequent quarters there was a significant increase in revenue and profit of one vehicle, only one a step away from the 10,000 yuan mark.

3profit and gross profit are rising quarter by quarter, and the monetization effect is starting to show

After almost eight quarters of low gross profit margin (around 12%-16%), BYD’s gross profit margin reached 19% thanks to the growth of its auto business, returning to the range of around 20%. There was a clear improvement, with a quarter-on-quarter increase of 4.57 percentage points to 18.96%.

And what continues to grow at the same time is the speed of BYD’s profit release. BYD’s one-quarter profit in the fourth quarter of 2022 reached 7.311 billion yuan, a year-on-year increase of 1114.3% and a month-on-month increase of 27.9 % The one quarter profit level has exceeded its entire 2021. The profit level for the whole year (3.045 billion yuan), and the profit in the fourth quarter of 2022 will also maintain a high growth trend (from 808 million yuan in the first quarter to 7.311 billion yuan in the fourth quarter).

In addition, BYD’s cash flow from operating activities has also continued to improve throughout the year The net amount exceeded 100 billion yuan for the first time and reached 140.8 billion yuan, a year-on-year increase of 115% 49.8 billion yuan , a record high.

BYD’s contract obligations, which reflect orders and demand at the same time, increased by 137.8% year on year to 35.517 billion yuan, and the high growth of construction work in progress (from 27.96 billion yuan at the beginning of the year to 44.622 billion yuan), which reflects the expansion planning process, also proves that BYD Benefits on both ends of supply and demand, Wall Street Insights and Wisdom Research believe that BYD’s monetization effect may have started to come to the obvious

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