Tiger Securities: the three main contributors behind Teslas five consecutive quarterly profits

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 Tiger Securities: the three main contributors behind Teslas five consecutive quarterly profits


According to the financial report, the third quarter revenue reached 8.771 billion US dollars, up 45% month on month and 39% year on year. The market is expected to be 8.36 billion US dollars. Net profit was $874 million, up 94% month on month and 156% year-on-year. After adjustment, eps0.76 was double that of the same period last year, and the market was expected to be $0.57.

Record delivery in the third quarter and revenue growth year on year

Revenue in the third quarter reached 8.771 billion US dollars, up 45% month on month and 39% year on year, higher than the market expected of 8.36 billion US dollars.

Earlier, according to Tesla, the company had record third quarter deliveries. Compared with the second quarter, when most factories were closed due to public health incidents, this represents a huge leap forward. According to the data, Tesla delivered 139300 vehicles in the third quarter, up 44% year-on-year, a record high. The last record was 112000 vehicles delivered in the fourth quarter of 2019, exceeding analysts expectations. Analysts had previously expected a range of 129900 to 137000 vehicles. Previously, 88400 vehicles were delivered in the first quarter and 90650 vehicles were delivered in the second quarter.

In fact, it is a big probability that Teslas financial report exceeds the expectation. After all, Teslas auto sales account for 86.77% of the total revenue, and the auto sales revenue is determined by the vehicle delivery volume and ASP (unit vehicle price). Combined with the record Q3 delivery data published before, it is not surprising that the revenue exceeded the expectation.

The only surprise was the rise in ASP. The average selling price of Tesla in the last quarter was 52271, while that in this quarter was close to 55000, which was mainly due to the introduction of modely earlier this year. As the price of modely is higher than that of Model3, that is, the more money modely sells, the greater its contribution to ASP, and the better Teslas revenue performance will be.

This quarters revenue growth is not only due to the increase in car sales, but also due to the large increase in carbon credits. Tesla CFO Zachary kirkhorn said Teslas third quarter results benefited from better than expected carbon credits. The carbon credits business is stronger than we expected, and this year our credit business has more than doubled from last year, he said.

Carbon credits, as the name suggests, sell carbon credits to rival car companies, and Tesla earns revenue by selling zero emission vehicle (ZEV) credits and greenhouse gas emission (GHG) credits to other manufacturers. Instead of building their own electrified or energy-efficient vehicles, these manufacturers use the credits they buy to meet market regulations. In the first quarter, Tesla realized three consecutive GAAP quarterly profits based on this project, reversing the loss situation a year ago. This quarters revenue amounted to 397 million, more than tripled from 134 million in the same period last year.

Teslas net profit this quarter was $874 million, up 94% month on month and 156% year-on-year. It has been profitable for five consecutive quarters.

Modely and Chinese power bring hope to Tesla Q4

In addition to modely, there is also good news from China. The influence of Chinas power on Tesla includes supply and demand. From the supply side, the Shanghai factory has increased the third shift production, with an annual production capacity of 250000 vehicles, compared with 150000 vehicles delivered in the same period last year. Compared with the annual delivery of 500000 vehicles, it is equivalent to that only one factory in China has contributed half of that in 2020 Capacity.

From the demand side, with the weak recovery of the United States and the struggle of Europe in the second round of the epidemic, the Chinese market is given high expectations. Tesla did not release regional sales, but data from the China Passenger Car Association (CPCA), the China Automotive Industry Association, showed that sales of Tesla Model 3 cars were basically flat in the third quarter of this year. Overall, Tesla sold about 34100 Shanghai made model 3 models in the third quarter. In conclusion, Tesla benefited from the sales increase of modely. After Q2 financial report, Tesla once again achieved better than expected financial report, and has been profitable for five consecutive quarters. However, the uncertainty of Teslas future is also increasing. Of course, if Tesla can perform better in Shanghai factory or model y, the market will continue to cheer for Tesla. This document does not constitute and shall not be deemed to constitute any agreement, offer, invitation to offer, opinion or proposal to purchase securities or other financial products. Nothing in this article constitutes an investment, legal, accounting or tax opinion of tiger securities, a statement of whether an investment or strategy is appropriate for your personal situation, or any other recommendation for you. Source: editor in charge of mass news: Chen Tiqiang_ NB6485

From the demand side, with the weak recovery of the United States and the struggle of Europe in the second round of the epidemic, the Chinese market is given high expectations. Tesla did not release regional sales, but data from the China Passenger Car Association (CPCA), the China Automotive Industry Association, showed that sales of Tesla Model 3 cars were basically flat in the third quarter of this year. Overall, Tesla sold about 34100 Shanghai made model 3 models in the third quarter.

Summary,

This document does not constitute and shall not be deemed to constitute any agreement, offer, invitation to offer, opinion or proposal to purchase securities or other financial products. Nothing in this article constitutes an investment, legal, accounting or tax opinion of tiger securities, a statement of whether an investment or strategy is appropriate for your personal situation, or any other recommendation for you.