Four dimensions tell you, how much will China's commercial vehicle industry return in 2022?

2022 is certainly not the best year for the commercial vehicle industry.

Revenue has fallen sharply, stock prices have generally fallen, and the whole industry has made less money and lost more money. Of the 15 major publicly traded companies, 12 reported revenue declines, and the declines were generally in the double digits.

The epidemic is the main reason, on the one hand, it reduces market demand, on the other hand, it also increases operating costs. Some business executives bluntly said: "Companies in the industry are living a hard life, how to survive is the most important thing for enterprises at present."

But there is also an opportunity. Financial automobile (ID:caijingqiche) found that a common thing in the commercial vehicle industry is that each company has more than the net profit of the same period on a single investment in research and development, that is, if it does not do research and development, the company can make a profit. Why maintain huge R&D investments in difficult times? What opportunities does this mean for the commercial vehicle industry in the medium and long term after getting rid of the impact of the epidemic?

To analyze the performance of the commercial vehicle industry, we selected 15 listed companies in the Shenwan Hongyuan Commercial Vehicle Index (801096.SI). Including Jiangling Motor (000550.SZ), FAW Jiefang (000800.SZ), Ankai Bus (000868.SZ), SinotruK (000951.SZ), Dongfeng Motor (600006.SH), Yutong bus (600066.SH), Foton Motor (600166.SH), Yaxing bus (6 00213.SH), Jinlong Motor (600686.SH), Zhongtong Bus (600957.SH), ST Dawning (600303.SH), Jianghuai Automobile (600418.SH), CIMC Vehicle (301039.SZ), Hanma Technology (600375.SH) and Power Xinke (600841.SH), etc., and from the four dimensions of revenue, stock price, profit, research and development investment

Revenue fell sharply, mainly because of the pandemic

Commercial vehicles are a cyclical industry and this year is clearly not an upward cycle. In 2022, compared with 2021, the general revenue of companies in the industry has declined significantly.

Of the 15 companies surveyed, 12 reported a decline in revenue and three reported an increase. Among them, the top 7 large companies in terms of revenue scale all declined year-on-year, ranging from 10% to 66%, which shows the severe situation of the commercial vehicle industry.

In terms of market segments, the situation is more severe for trucks than buses. The three companies with rising revenue are all bus companies, such as Jinlong Automobile, up 6.09%, Zhongtong Bus, up 26.54%, and Yaxing bus, up 44.16%.

The epidemic is the biggest uncertainty affecting the commercial vehicle market. Because commercial vehicles are not consumer goods, but means of production. The epidemic has had a significant negative impact on consumption, travel, infrastructure and other needs, resulting in reduced demand for road transport and poor operation. At the same time, international geopolitical events and overseas inflation have led to rising oil and gas prices.

"At this stage, companies in the industry are living a hard life, and how to survive is the most important thing for companies at the moment." As Jinlong Automobile Secretary Ji Xiaojian recently said in the acceptance of institutional research, "The company's bus production and sales decline, on the one hand, the industry sales reached a peak in 2015, and then began to decline, and this year's sales are less than 40% of 2015 sales; On the other hand, it is the low demand due to the pandemic, which is the biggest challenge for the industry."

Since 2022, the stock price of the commercial vehicle industry has fallen

From January 1 to December 5, 2022, the Shenwan Hongyuan Commercial Vehicle Index fell by 11.46%. Of the 15 companies surveyed, five rose and 10 fell.

As the five enterprises with the largest weight, Jianghuai Automobile fell by 16.11%, Yutong bus fell by 23.80%, Foton Automobile fell by 20.06%, FAW Jiefang fell by 6.97%, and China National Heavy Duty Truck fell by 12.40%.

Take SinotruK as an example, the stock price came to a high of 33.21 yuan in February 2021, then all the way down, to the lowest 8.65 yuan in April 2022, and since then, the bottom has rebounded, and by December 2022, the price has been fixed to about 15 yuan, compared with more than a year ago.

As share prices languish, companies are buying back shares to shore up confidence. As of November 30, 2022, SinotruK has repurchased 5,066,200 shares, accounting for 0.4312% of the company's total share capital, at a cost of 63,287,600 yuan.

In a "falling", it is worth paying attention to Zhongtong bus - in the commercial vehicle industry with a double-digit decline, its share price actually achieved a rise of 138.45% against the trend.

This is because Zhongtong Bus has become a "nucleic acid testing" concept stock. Zhongtong Bus production and sales of nucleic acid testing vehicles, although the scale is not large, the announcement shows a total of 38 vehicles, income 107 million yuan, but this in the middle of this year for Zhongtong sent a dozen of the limit, the stock price from the past less than 5 yuan to nearly 30 yuan, driving the market value has also doubled at least.

The mid-year rally in Zhongtong Bus did not last, and after reaching a record high of 27.97 yuan in July, the share price began to fall back, and by early December, the share price was back around 13 yuan. After all, the performance of Zhongtong bus in recent years is general, and the net profit after deducting non-profits has suffered losses for three consecutive years from 2019 to 2021, and the loss range is still increasing, reaching 276 million yuan.

The profit predicament of Zhongtong bus is common in the industry.

Among the 15 statistical enterprises, in the first three quarters of 2022, there were 7 profits and 8 losses, and the amount of losses was greater than the amount of profits, and on the whole, the loss was more than the profit.

Hanma Technology ranked first in the industry with a loss of 1.098 billion yuan. The state-owned enterprise from Anhui province owns the two major brands of Xingma special vehicles and Valin heavy trucks, and sold 5,225 units in the first 11 months of 2022, a year-on-year decrease of 59.83%.

Because according to the segmentation field, the heavy truck market of Hanma Technology is more affected by the downward cycle, and the decline is more obvious than that of the commercial vehicle market.

According to the statistics of the China Association of Automobile Manufacturers, the cumulative sales of heavy trucks in the first three quarters of 2022 were 523,000, down 57.6% year-on-year, and both sales and year-on-year hit a new low in the same period in recent years, falling into the "darkest moment".

The reason is that heavy truck emission standards switched from "National five" to "National six" in July 2021, and manufacturers have increased promotion efforts, resulting in heavy truck market demand being seriously overdrawn in the first half of 2021. In addition, the logistics market continues to be sluggish, and the demand for heavy goods vehicles has slowed down. Under the influence of a series of factors such as environmental protection limited production, excess capacity, and insufficient construction of infrastructure projects, end user orders are also less than expected.

Even FAW Jiefang, which has continuously maintained the industry's largest sales volume in the field of heavy trucks, is also experiencing pains. 2022 third quarter report shows that the company's main income of 30.455 billion yuan, down 65.63% year-on-year; Net profit attributable to the parent - 652 million yuan, down 118.29% year-on-year.

In the 15 commercial vehicle enterprises in the highest net profit (717 million yuan) Jiangling Motor, the main attack is the light passenger car market, light passenger is bleak in China's commercial vehicle market one of the few bright spots.

Due to the repeated epidemic in China, residents' dependence on online shopping has increased, which has promoted the development of e-commerce and urban logistics in a short period of time. The released demand for the distribution of livelihood materials and medical supplies has boosted the sales growth of light passenger cars and vans, and the sales volume of medical ambulances has remained high. Therefore, the performance of light passenger cars is significantly better than that of medium and large buses. Better than the commercial vehicle market.

Jiangling sold 253,398 vehicles in the first 11 months of this year, down 16.89 percent from a year earlier.

R&d investment is generally greater than net profit

Under the unfavorable short-term market environment, commercial vehicle enterprises still maintain R&D investment in order to pursue long-term competitiveness.

Of the 15 companies, 13 invested more in research and development in the first three quarters of this year than their net profit in the same period, that is to say, "research and development at a loss."

Among them, FAW Jiefang not only has the highest research and development investment (1.762 billion yuan), but also the difference between research and development and profit (-652 million yuan) is more than 2.4 billion yuan, both indicators are far beyond the peer, indicating that the most willing to spend money to do research and development.

New energy is the direction of transformation of commercial vehicle enterprises. With the orderly promotion of the national "dual carbon" strategy, especially the continuous tightening of environmental regulations, the traditional energy commercial vehicle market will continue to show a shrinking trend, and new energy commercial vehicles are expected to show rapid growth.

In response to investor questions on December 5, the board secretary of FAW Jiefang said that the company has laid out five major vehicle product platforms in new energy products, including heavy, medium, light, micro and passenger, and three technical routes including pure electric, hybrid and fuel cells, and will also strengthen the layout in the fields of research and development, production capacity and ecology. In terms of electric heavy trucks, at present, for coal, sand and gravel transportation, port transportation, urban construction residue, concrete mixing and other special scenarios with short transport distances, high frequency and heavy loads, more than 50 electric heavy trucks including charging and power exchange routes, traction, self-unloading, and concrete mixing have been completed.

In addition to the transition to new energy, internationalization is another important development direction. When the domestic market demand is declining, the overseas market has become an important profit growth point for commercial vehicle enterprises.

Taking Yutong Bus, a leading bus company, as an example, its performance has declined since 2017. The operating income from 2017 to 2020 is 33.222 billion yuan, 31.746 billion yuan, 30.492 billion yuan and 21.705 billion yuan respectively, and the net profit attributable to the mother is 3.129 billion yuan, 2.301 billion yuan, 1.94 billion yuan and 520 million yuan respectively.

After winning the bid for the 1.8 billion yuan project of Qatar World Cup service vehicles, Yutong's performance rebounded in 2021. This year, Yutong Bus achieved revenue of 23.233 billion yuan, an increase of 7.04%; Net profit attributable to shareholders of listed companies was 614 million yuan, up 18.95% year-on-year. In the first three quarters of this year, Yutong Bus achieved operating income of 13.113 billion yuan, down 16.28% year-on-year; Net profit of 131 million yuan, although down 50% year-on-year, but has outperformed the industry's general loss of performance.

Commercial vehicle exports are developing rapidly. China Automobile Association data show that in October 2022, China's commercial vehicle exports of 59,000 units, an increase of 15.5% month-on-month, an increase of 77.5% year-on-year; From January to October, China exported 480,000 commercial vehicles, an increase of 43%.

There are also opportunities in the crisis, as the epidemic prevention and control has eased, major commercial vehicle companies are trying to steer the future direction of development.