Since 2020, Yutong Bus has been in cold weather successively. According to the published first quarter performance, the revenue is 2.808 billion yuan, down 41.97% year-on-year, and the net profit is 143 million yuan. In April, the sales of Yutong Bus dropped 51%.
Obviously, the sharp decline in performance and sales has weakened its profitability. In addition, the epidemic is hard to contain in a short period of time, the sales volume of the bus industry is falling faster than expected, and the uncertainty of the companys overseas market development is increasing, which makes the revenue pressure and challenges faced by Yutong Bus in 2020 increase sharply.
Yutong Bus repeatedly overturned, so what is the root of the problem? According to the annual report published in 2019, the revenue and net profit of Yutong Bus dropped year on year, and the net profit has declined for three consecutive years.
In 2019, the operating revenue was 30.479 billion yuan, down 3.99% year on year; the net profit was 1.94 billion yuan, down 15.7% year on year.
In 2018, the operating revenue was 31.746 billion yuan, a decrease of 4.44% compared with that in 2017; the net profit was 2.301 billion yuan, a decrease of 26.45% compared with that in 2017;
In 2017, the company achieved revenue of 33 billion 222 million yuan, a year-on-year decrease of 7.33%, and net profit of 3 billion 130 million yuan, a year-on-year decrease of 22.62%;
Both revenue and net profit decreased and market share increased steadily
As for the decline of net profit, the financial report in 2019 shows that downward pressure on industrial policies and market demand is increasing, and the profitability of new energy buses of the company has declined due to the further reduction of national new energy subsidy standard. Yutong Bus said that its revenue plan in 2019 was 32 billion yuan, but the company failed to achieve the revenue plan formulated at the beginning of the year due to the impact of new energy vehicle subsidy policy and the overall demand of the industry.
In this industry downturn, Yutong achieved sales of 58700 vehicles in the whole year, down 3.6% year-on-year, still better than the overall level of the industry. Among them, in the large and medium-sized bus market with leading advantages, the total sales volume is still 49800, ranking the first in the industry. In the future, with the upgrading of new energy bus products and the improvement of subsidy requirements, it is expected to further release its market share in large and medium-sized passenger cars and continue to lead the bus industry.
According to Tianfeng securities, the market share of Yutong Dazhong customer increased from 28% in 2009 to 37% in 2017 in the field of Dazhong customer with high competition barriers and profitability. In the past 18 years, the market share has declined, mainly due to the impact of new entrants in the industry. Now, with the high investment in R & D, the strengthening of product competitive advantage and the reversal of market share, the industry is optimistic about its development trend. This can be seen from the market share in the 2019 annual report.
In addition, the gross profit rate of Yutong in 2019 is 24.35%, down 0.98% year on year. Four fees accounted for 18.41%, a year-on-year increase of 1.18%, including sales rate of 9.17%, an increase of 1.26%, management rate of 0.24%, financial rate of 0.33%; R & D rate of 5.82%, a decrease of 0.05%. Under the declining trend of new energy subsidies, Yutongs gross profit rate has declined slightly, but its profit advantage is still stronger than that of its competitors, and it is also a big push for the increase of its market share.
Continuous improvement of cash flow, mainly policy subsidies
However, Yutong Buss operating cash flow significantly exceeds the net profit attributable to the parent, mainly due to the state subsidy blood transfusion in 2019. At present, the companys receivables are 13.86 billion, including 7.21 billion state subsidies. Subsequently, with the state subsidies in place, the companys cash flow will continue to improve.
With the decline of new energy subsidies, the market demand for new energy buses may be at a risk of decline, which leads to pressure on the new energy bus industry, which is adverse to the companys profit growth. However, considering the impact of the epidemic and the overdraft in the early stage of the new energy bus, it is expected that the sales pressure of the new energy bus will increase and the profit growth will be under pressure in 2020.
Continue to increase investment in innovation and R & D and strengthen product competitiveness
In 2019, Yutong Bus company incurred R & D expenditure of 1.774 billion yuan, accounting for 5.82% of operating revenue, which is at a high level in the same industry. It is mainly invested in the improvement and development of T7 series models, high-end tourism, high-end public transportation, CL6 / CL7 and other high-end products, the application of automatic driving technology, the research and development of five meter microcirculation vehicle, as well as the promotion of five modernizations, manufacturing capacity, lightweight, LCC (life cycle cost), technology research projects, etc.
Affected by policies and epidemic situation, market growth space is under pressure
In Yutongs view, the bus industry belongs to the weak cycle industry. The total amount of the industry depends on the total amount and structure of residents travel, and to some extent, it is also affected by national policies. During the reporting period, affected by the early consumption of new energy products, high-speed rail, private cars and other substitutes, the total demand for large and medium-sized passenger cars in the domestic industry decreased by 15.2% year on year. In order to reduce the shrinking market demand, it is necessary to further develop products suitable for and leading customers operational needs, and transform from intercity passenger transport to tourism passenger transport, scenic spots class lines, urban and rural public transport, commuter bus rental services and other fields.
At the same time, in terms of tourism passenger transport, driven by the rapid development of tourism industry and the national new energy policy in the past few years, the tourism bus market as a whole has achieved rapid growth. However, affected by the epidemic situation, the demand for peoples travel and public transport is restrained in the short term, especially for the tourist bus market.
In terms of overseas market, statistics show that in 2019, Chinas large and medium-sized bus exports reached 22711, an increase of 14.36% year on year. According to the report, it is expected that the export market will still have a large growth space due to the advantages of Chinas bus brand in terms of technology, products and market promotion formed in the domestic market. However, with the novel coronavirus pneumonia spreading abroad, the demand for tourist buses in Europe and the Middle East will be reduced to a certain extent, which needs to further enhance the financial services capability of overseas businesses.
Facing the short-term pressure and challenge of domestic and foreign market demand for buses. According to the daily financial report, from the perspective of development trend, new energy will be the general trend. With the decline and extension of new energy subsidy policy and the increase of investment ratio of new infrastructure in transportation, energy and other projects, the development of new energy bus industry will be improved and new energy bus will gradually enter the field of road bus. At the same time, we are optimistic about the upgrading of Yutongs medium and high-end products, the strategy of increasing the development and sales of RV, fuel cell and other products in China, and the measures of continuously developing high-end models in the overseas market and continuously improving the overseas sales system will continue to improve the market share in the industry. To some extent, it can enhance the confidence of investment institutions and investors. Considering the current economic downturn environment, the increase of uncertainty in the domestic and foreign industry market, and the impact of the sharp decline in sales volume of Yutong since 2020, it is more difficult to predict this years revenue expectations. Statement: for the purpose of transmitting more information, the content of this article is for reference only and does not constitute investment proposal. Investors operate on this basis at their own risk. Source: editor in charge of daily financial report: Yang bin_nf4368
Facing the short-term pressure and challenge of domestic and foreign market demand for buses. According to the daily financial report, from the perspective of development trend, new energy will be the general trend. With the decline and extension of new energy subsidy policy and the increase of investment ratio of new infrastructure in transportation, energy and other projects, the development of new energy bus industry will be improved and new energy bus will gradually enter the field of road bus.
Considering the current economic downturn environment, the increase of uncertainty in the domestic and foreign industry market, and the impact of the sharp decline in sales volume of Yutong since 2020, it is more difficult to predict this years revenue expectations.