GAC Group’s third-quarter transcript: net profit of 2.3 billion, double the year-on-year growth

On October 27, GAC Group announced its third-quarter results. The report shows that the company achieved operating income of 31.527 billion yuan in the third quarter of this year, a year-on-year increase of 51.58% and a month-on-month increase of 24.6%; net profit attributable to the parent was 2.312 billion yuan, an increase of 144.07% year-on-year; non-net profit attributable to the parent was 2.087 billion yuan, year-on-year. An increase of 292.70%.

Stimulated by the demand-side passenger car purchase tax preference and local consumption incentive policies, coupled with the diminishing impact of the supply-side raw material prices, and the continuous improvement of the supply chain layout of domestic vehicle companies, the group’s domestic passenger car market has returned to the upward channel. These factors all contributed significantly to GAC Group’s performance growth in the third quarter.

The significant increase in gross profit should be attributed to the “volume of sales”

The report shows that GAC Group achieved operating income of 31.527 billion yuan in the third quarter, an increase of 24.6% month-on-month and a year-on-year increase of 51.58%; net profit attributable to the parent was 2.312 billion yuan, an increase of 144.07% year-on-year; %. In the first three quarters, the consolidated operating income was 79.976 billion yuan, a year-on-year increase of 45.10%; the net profit attributable to the parent was 8.062 billion yuan, a year-on-year increase of 52.59%; the non-net profit attributable to the parent was 7.728 billion yuan, a year-on-year increase of 68.87%.

Due to the overall recovery of the domestic market, the production and sales recovery of GAC Group, which was already on an upward trend, accelerated. In September, the group produced 228,100 vehicles and sold 237,200 vehicles, a year-on-year increase of 41.5% and 44.3% respectively. From January to September, a total of 1.8326 million vehicles were produced and 1.825 million vehicles were sold, a year-on-year increase of 26.9% and 22.2% respectively. At the same time, domestic auto production and sales in September were 2.672 million and 2.61 million, up 11.5% and 9.5% month-on-month, and 28.1% and 25.7% year-on-year. From January to September, the production and sales of automobiles reached 19.632 million and 19.47 million respectively, a year-on-year increase of 7.4% and 4.4% respectively. GAC’s monthly and cumulative production and sales growth rates far outpaced the industry.

It is worth mentioning that in the third quarter, GAC’s gross profit achieved a large increase, an increase of 26.8% month-on-month and a year-on-year increase of 10.8%. This should be attributed to the substantial increase in the scale of production and sales and the increase in the market share of high-value models.

In the first three quarters, GAC Group achieved operating income of 79.976 billion yuan, an increase of 45.10% over the same period last year; net profit attributable to the parent was 8.062 billion yuan, an increase of 52.59% year-on-year; non-net profit attributable to the parent was 7.728 billion yuan, an increase of 68.87% year-on-year.

Outstanding performance of independent brands, strong return of joint venture camp

Among the two independent brands of GAC Group, Aian can be described as the “popular fried chicken” in the domestic auto market. This is not only reflected in sales, but also in terms of brand value.

GAC Aeon is one of the few car companies in China with full-stack self-research capabilities of “EV+ICV” (Electrification + Intelligence), with sales exceeding 180,000 in the first three quarters. In September this year, Aian’s production and sales reached a new high, breaking through 30,000 for the first time, up 122.7% and 121.2% year-on-year respectively. From January to September, Aeon produced a total of 182,384 vehicles and sold 182,321 vehicles, an increase of 133.8% and 132.1% year-on-year respectively. The sales volume has been far behind many new car manufacturers. On October 12, GAC Aian’s second intelligent manufacturing center was officially put into operation, and the overall production capacity plan exceeded 400,000 vehicles, which provided a guarantee for the sharp increase in future sales. At the same time, the brand is steadily advancing its premiumization strategy.

With the release of the new brand logo “AI Shenjian” and the launch of a new high-end series – Haobo Hyper and the first high-end electric sports car Hyper SSR, the brand image has been further improved. A week ago, Aion completed the A round of financing, and with a total financing of 18.294 billion yuan, it set a new record for the largest single private financing in the domestic new energy vehicle industry. After the capital increase was completed, the valuation was 103.239 billion yuan, becoming the current domestic unlisted new energy. The highest valuation of a car company.

Different from Aion, GAC’s other self-owned brand, Trumpchi, is more focused on the “XEV+ICV” (electrification + intelligence) field, and the production and sales volume continues to remain strong. In September this year, GAC Trumpchi achieved production and sales of 37,223 units and 33,494 units, a year-on-year increase of 65.1% and 46.1%; from January to September, the cumulative output was 274,605 ​​units and the sales volume was 267,374 units, a year-on-year increase of 32.0% and 20.9% respectively.

During the reporting period, the proportion of GAC Trumpchi electrified products has also been further increased. The Shadow Leopard, GS8 and the newly launched Yingku SUV all launch hybrid versions, and the M8 hybrid version will also be launched by the end of the year. According to reports, the whole series of products will be hybridized in 2025.

The growth of GAC’s own brand sales is certainly a bright spot, and the profitability of the joint venture is also of great significance. During the reporting period, GAC Group’s investment income in associates and joint ventures increased significantly, which promoted the year-on-year increase in net profit attributable to the parent and non-net profit attributable to the parent deducted from the parent company. Data show that in the first three quarters, GAC achieved a total investment income of 12.268 billion yuan, a year-on-year increase of 48.1%, of which the investment income in the third quarter increased by 111.7%. The joint ventures GAC Toyota and GAC Honda have regained a strong momentum of development. Among them, GAC Toyota, whose sales continued to grow against the trend this year, completed the production and sales of 91,649 vehicles and 96,000 vehicles in September, an increase of 89.5% and 98.8% year-on-year; from January to September, the cumulative production of vehicles was 758,399 vehicles, an increase of 32.1% year-on-year, and the cumulative sales There were 764,808 vehicles, a year-on-year increase of 31.1%, which is very likely to hit the million-dollar sales target. From January to September, GAC Honda produced a total of 577,866 vehicles and sold a total of 572,963 vehicles, up 8.8% and 4.4% year-on-year, respectively. The overall performance was also steady with progress.

Moreover, in the first three quarters, the electrification transformation strategy of GAC’s joint venture brands has accelerated significantly. For example, pure electric products such as GAC Honda e:NP1 Extreme 1 and GAC Toyota bZ4X have been launched successively, and will continue to usher in new growth points. With the gradual improvement of the production constraints on the supply side, the delivery of hot-selling products has been solved one after another, combined with the end effect of the policy and the peak consumption season in the fourth quarter, the GAC joint venture camp is also expected to achieve satisfactory results.

Further increase the overall industrial chain layout

It is worth noting that in the first three quarters, in addition to the continuous increase in the overall production and sales scale, GAC Group also achieved remarkable results in the industrialization of new energy vehicles and the development of new technology fields.

During the reporting period, GAC Energy Technology Co., Ltd., jointly invested by GAC Group and GAC Aeon, was officially registered and established. The company conducts business around the construction and operation of charging and swapping networks, technology research and development, and battery operation management. It is expected to invest 4.96 billion yuan in the future. Juwan Technology Research, which was incubated within the GAC Group, is also actively expanding its production capacity. It is expected to add 8GWh of XFC extreme-speed battery production capacity in 2023, with the ability to support 120,000 new energy vehicles.

Recently, Ruipai Power Technology Co., Ltd., jointly invested by GAC Group, GAC Aeon, and GAC Passenger Vehicle, was officially registered and established. Integration of testing and mass production. At the same time, Inpai Battery Technology Co., Ltd., jointly invested by GAC Aian, GAC Passenger Vehicle, and GAC Commercial, and held by GAC Aian, was officially registered and established with a total investment of 10.9 billion yuan to carry out battery self-research and self-production industrialization construction and Manufacturing and sales of autonomous batteries. In addition, GAC Aeon also signed a strategic cooperation with Ganfeng Lithium, an upstream material supplier. This means that a series of intensive actions will make GAC’s layout in the energy ecological industry chain increasingly perfect.

Since the beginning of this year, the automobile market has faced complex challenges, but GAC Group’s operating indicators of revenue and net profit have achieved high growth, which is evident in its operating capabilities. Looking forward to the fourth quarter, the supply and demand sides will continue to repair, and the company’s own operating strength will continue to strengthen. GAC Group is expected to continue to record good performance throughout the year. Judging from various financial indicators in the first three quarters, GAC Group has a great hope of exceeding its annual growth target.

Liang Luozhe, reporter from Southern Metropolis Bay Financial Society