Interpretation of SAIC's 2018 Financial Statement: Self-owned Brand with Full Wings

SAIC is one of the few domestic listed companies to record positive growth in the downturn of 2018. According to the annual earnings forecast released by SAIC, SAIC achieved a net profit attributable to shareholders of listed companies of approximately RMB36 billion in 2018, an increase of RMB1.6 billion compared with 2017, an increase of 4.6% year-on-year. The improvement was due to SAIC's record sales of 7.0517 million vehicles in 2018, up 1.75% from a year earlier, and its expected market share of more than 24%, further widening the gap with its competitors. If SAIC's growth in 2017 was due to joint ventures and joint efforts by its own brands, the growth in 2018 was largely due to a strong break-out by its own brands. Compared with 2017, SAIC added 122,000 vehicles in 2018, while Roewe, Mingjue, Chase and other independent brands added 196,000 vehicles. The independent brands not only drove the total sales growth of SAIC, but also compensated for some of the lost sales of the joint venture brands. Together with brands such as Baojun and Wuling, SAIC's China-branded cars sold more than 2.94 million units, continuing to lead the country, accounting for 42% of the group's overall sales. Relatively speaking Although SAIC Volkswagen, GMAC-SAIC and GMAC-SAIC Wuling are still among the top four domestic auto companies in terms of sales volume, the growth rate of sales volume is not obvious. SAIC GM and GMAC-SAIC Wuling even experienced a decline in sales volume, and SAIC-VW sales volume increased only slightly by 0.1% for the whole year. On the contrary, SAIC Passenger Vehicle, the core of SAIC, has developed rapidly in recent years and become a template for domestic self-brand automobile enterprises to break through upwards. The Roewe and MG brands of SAIC Passenger Cars are clearly positioned and do not cause internal friction. Roewe faces the mainstream passenger car market while MG is mainly young. The two brands complement each other and jointly launch an impact on the passenger car market. SAIC 2018 Financial Statement Interpretation: Self-owned brand Feather Wing Fullness SAIC completed the sales of 701,900 vehicles in 2018, an increase of 34.45% over the same period of last year. Among them, the Roewe RX, known as the "Dinghai Magic Needle," sold more than 200,000 vehicles in five years; New MG 6 word of mouth and sales steadily increased; MG ZS has become the new global model of its own brand. In 2018, SAIC sold 270,000 new cars overseas and formed six "10,000-class" overseas markets in Thailand, the United Kingdom, Indonesia, Chile, Australia, New Zealand and the Middle East. Mingjue Brand has made outstanding contributions to realize overseas sales of 73,000 vehicles, an increase of 176.5% year-on-year. Mingjue Brand has already found its own way to internationalization. Interpretation of SAIC's 2018 Results: Overseas market mentioned by independent brand Feather Fullness, SAIC Group in recent years Shanghai Automobile Group Co., Ltd. Has won the first place in the country in vehicle exports for three consecutive years. This is mainly due to SAIC's adherence to global layout and multinational operations. SAIC has set up 3 overseas vehicle manufacturing bases in Thailand, Indonesia and India, 11 regional marketing service centers in Europe, North America, South America, Africa, the Middle East and Australia and New Zealand, and nearly 500 overseas marketing service outlets. "Going out" has become the goal of many independent brand automobile enterprises at this stage, but many automobile enterprises still stay in the stage of shouting slogans, it is not easy to really "go out", the most basic is the need for the quality of its products, otherwise no matter how good the planning can only be on paper. "New Four Modernizations" leads SAIC to insist on "New Four Modernizations" (electric, intelligent networking, sharing, internationalization) as the starting point, continue to increase innovation efforts, and transform to mobile travel services and product suppliers. In recent years, SAIC has invested more than 50 billion yuan, leading the domestic automobile enterprises. SAIC, in particular, has made a lot of headway in electronicalisation. SAIC's sales of new energy vehicles exceeded 140,000 vehicles in 2018, an increase of more than 120% year-on-year and a "doubling" growth for the fifth consecutive year. Sales of proprietary Roewe and MG NEVs doubled year-on-year to 96, 000 vehicles. Interpretation of SAIC's 2018 earnings: The explosive growth of sales of its own brand plump-wing products has benefited from the rapid upgrading of SAIC's core technology for new energy vehicles. SAIC fully implements the three technical routes of "pure electricity, plug-in power and fuel cell", and independently controls "battery, electric drive and electric control "Three core technologies, has launched more than 20 new energy products. It is worth mentioning that in January 2018, SAIC won the second prize of the State Award for Scientific and Technological Progress for its project entitled "Key Technologies and Industrialization of Low-energy Plug-in Hybrid Passenger Vehicles", which is the only automotive project to win the award. By 2020, SAIC will have invested nearly 10 billion yuan in the research and development of new energy technologies! In terms of intelligent networking, SAIC has successively established joint ventures and cooperation with China Mobile, Huawei, Wuhan Guangting, TTTech, Mobileye and other domestic and foreign enterprises within one year to accelerate research and development in key areas such as intelligent driving decision-making control system, high-precision maps, vehicle communication technology, 5G Internet vehicles and so on. It is understood that the Roewe Marvel X "last mile" autonomous parking function, will be officially released this year. SAIC Group 2018 results interpretation: own brand wing plump in the sharing, SAIC Group launched a mobile travel strategy brand "enjoy road travel", and to achieve formal operation, the current online fleet size has reached 1400, and the corresponding equipped with qualified drivers, customer satisfaction as high as 99%. The new energy vehicle rental company Global Car Rent, invested by SAIC, has now entered 64 cities with 45,000 vehicles, with a cumulative registered customer base of more than 4 million and daily orders of more than 90,000. What SAIC has achieved in terms of internationalization we will not dwell on. SAIC has already embarked on a sustainable and competitive internationalization path. In addition to the achievements in the "new four modernizations" SAIC has also made great achievements in joint ventures and cooperation. In 2018, SAIC Audi has completed the legal approval formalities for Audi's shareholding, and the MEB New Energy Vehicle Factory will be under construction, with Audi and Volkswagen brand new energy products to be launched; GMAC-SAIC's Cadillac brand remained strong, with annual sales of 228,000 vehicles, up 31.8% year-on-year, and so on. For SAIC, it can be said that independent innovation and joint venture and cooperation are both indispensable. In a word, preempting the layout, firmly investing, sticking to the differentiation road and building its own unique innovation advantages are the magic weapon for SAIC to go strong against the trend, which will also be the powerful engine for SAIC's sustainable development in the future.