BYD's new energy vehicle's profitability has improved significantly

On August 30, BYD released its first half of 2018 performance report. In the first half of this year, BYD's turnover was 52.163 billion Yuan, a year-on-year increase of 19%, and the net profit attributable to listed companies was about 479 million Yuan. BYD expects net profit for the first three quarters of this year to be about 1.28 billion Yuan to 1.68 billion Yuan.

It is worth noting that in the past three years, BYD's new energy vehicle sales have reached record highs. In July 2018, BYD's new energy vehicle sales exceeded fuel vehicle sales for the first time. BYD Chairman Chuanfu Wang said: "BYD's auto business will usher in a new round of growth cycle, and the company's new energy vehicle profitability will be significantly improved in the second half of the year."

A new round of growth cycle is coming

BYD's financial report showed that its auto sales in the first half of the year increased by 24.93% year on year to 28.026 billion Yuan. Among them, new energy vehicle revenue reached 18.173 billion Yuan, accounting for 34.84% of BYD's total revenue, and continues to be an important source of income and profit for BYD.

According to data released by the China Association of Automobile Manufacturers, BYD has a market share of 18.3% in the field of new energy vehicles and a market share of 20.3% in the field of new energy passenger vehicles.

Since the beginning of this year, BYD's new generation of Tang, Yuan EV360 and other models have received enthusiastic feedback from the market and are in short supply. The first month of the new generation of Tang listed in the first month of sales reached 7,000 units, with an accumulated order of over 20,000 units. The two models of Qin DM and Song DM have won the championship and runner-up in the domestic plug-in hybrid vehicle market.

In this regard, Chuanfu Wang for example: "If BYD's new generation of Tang sells 10,000 vehicles a month, it will be 25 billion to 30 billion Yuan in revenue a year. If it doubles, this car alone can contribute 500 to the company in one year 600 billion Yuan in revenue."

According to statistics from relevant statistical agencies, in the key new energy vehicle markets such as Beijing, Shenzhen, Guangzhou and Hangzhou, BYD's market share exceeded 30% from January to July this year.

According to BYD's announced product plan, a number of heavy-duty models will be launched in the second half of this year, including a new generation of Song (fuel version, plug-in version and pure version), Qin Pro (fuel version, plug-in version and pure electricity) Edition), a new generation of Tang (pure version). These models are all based on the "Dragon Face" family design language, and equipped with DiLink intelligent network connection system, or will drive BYD car sales to rise sharply.

Chuanfu Wang said: "The development of the new energy automobile industry exceeded expectations. Under the new model, BYD achieved rapid sales growth and continuous improvement of brand influence. Meanwhile, it is expected that the profitability of BYD new energy vehicles will be significantly improved in the second half of the year. In the field of fuel vehicles, BYD will continue to enhance its product strength, increase the market share of the fuel vehicle business, and promote the rapid growth of its business while effectively controlling costs."

Battery "open" promotes ecology

Since the first announcement of the opening of the power battery supply in 2017, the industry has been rumored that BYD supplies batteries to domestic and foreign OEMs. On July 5 this year, BYD and Changan Automobile signed a strategic cooperation agreement in Shenzhen to jointly establish a power battery joint venture with a capacity of 10GWh.

The cooperation with Changan Automobile took the first step in the external supply of BYD power battery. Chuanfu Wang said: "This strategic cooperation is an important development of BYD's open supply and marketing system and has great strategic significance for the power battery business and even the long-term development of the Group." Meanwhile, BYD expects to accelerate the pace of opening up and introduce more domestic and foreign. The main engine factory realized a series of strategic measures including sales of power batteries, establishment of joint ventures, and introduction of strategic investment to accelerate the development of the power battery business and consolidate the leading position in the industry.

In August of this year, Chuanfu Wang revealed that BYD can only supply 20,000 new energy vehicles per month. If the production capacity is sufficient, the monthly capacity of BYD new energy vehicles can be increased to 30,000-4,000.

This also fully proves that in the external and internal supply of the battery, it is actually possible to synergize and share the cost through the effect of scale. BYD and its customers will benefit. Up to now, BYD has accumulated rich experience in service customers in the battery B2B business direction, and with the addition of more partners, it is believed that this relationship will be further deepened.

In the face of strong demand for power batteries by itself and the outside world, BYD is rapidly increasing its power battery capacity. In addition to establishing a joint venture with Changan Automobile, in June 2018, BYD announced that its power plant with an annual production capacity of 24GWh was officially launched in Qinghai. In addition, public information indicates that BYD and Chongqing Laoshan District signed an investment cooperation agreement in August 2018, and plans to build a power battery project with an annual production capacity of 20GWh.

According to the plan announced by BYD, its power battery capacity in 2020 can reach 60GWh.

Bloomberg New Energy expects that the global demand for power batteries will exceed 1500GWh in 2030. By then, the annual sales volume of new energy vehicles will reach 28%. It is estimated that the annual sales of new energy vehicles will reach 20 million in 2025 and 42 million in 2030. the above. During the period 2020-2030, the compound annual growth rate will reach 20%.

Real progress of rail transit

Compared with the new energy vehicle and battery business, the rail transit business is another point of view for BYD. According to the information disclosed by BYD, since the release of “Cloud Track” in October 2016, it has won orders from many cities at home and abroad.

Technology is BYD's DNA and core competitiveness. As a multi-track R&D team of more than 1,000 people, BYD has invested 5 billion Yuan to build a rail transit product brand. It belongs to the type of straddle monorail, one of the better solutions for the medium and small volume rail transit landing mode.

According to the relevant standards of Circular 52, at present, there are more than 200 cities in China that are in line with the construction of trams, light rails and subways. It can be seen that the market cake for medium and small-capacity rail transit is very large, and there are many opportunities for BYD and manufacturers and operators who are interested in farming this market.

As of July 2018, BYD's straddle-type monorail (cloud track) project has been researched by municipal government leaders in more than 100 cities around the world. In many cities in China, cloud-track cooperation has been signed, and the Yinchuan Huabo Park section has already been installed. Open to traffic. At the same time, BYD has actively expanded its overseas market and has signed strategic cooperation agreements with Brazil, the Philippines, Egypt, Morocco and Cambodia. In addition, it is also in talks with several cities (countries). In May of this year, BYD announced that it won the bid for the Salvador rail transit project in Brazil, amounting to approximately 689 million US dollars.

With the introduction of relevant national policies, in the future, domestic and international rail transit projects will continue to land, and it is expected to further open up space for BYD's development.

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