Behind the 160% increase in BYD's performance: the gross profit margin of the automobile business surpassed that of Tesla, and the production and sales of new energy both declined.

BYD ushered in a high-profile moment in 2020-in addition to becoming the listed company with a market capitalization of more than 500 billion yuan, the just-released 2020 results also recorded a 1.6 times year-on-year increase in net profit.

"before that, BYD predicted that the annual net profit of returning to the mother would be 4.3 billion to 4.6 billion yuan, which was actually at the lower end of the range (2020 net profit). Behind BYD's double profits, there are more data worth deliberating. " Some people in the industry said that BYD released its 2020 results on the evening of March 29.

The gross profit margin of automobile business surpassed that of Tesla.

According to the financial report, in 2020, BYD achieved an operating income of 156.598 billion yuan, an increase of 22.59% over the same period last year; a net profit of 4.234 billion yuan, an increase of 162.27% over the same period last year; and a net profit of 2.954 billion yuan, an increase of nearly 12 times over the same period last year.

From a sub-business point of view, BYD's three core businesses have achieved revenue growth. Of this total, revenue from automobile, automobile-related products and other products business was about 83.993 billion yuan, up 32.76 percent over the same period last year; revenue from mobile phone parts, assembly and other products business was about 60.043 billion yuan, up 12.48 percent from the same period last year; revenue from rechargeable batteries and photovoltaic business was about 12.088 billion yuan, up 15.06 percent from the same period last year. The three major businesses account for 53.64%, 38.34% and 7.72% of the group's total revenue, respectively.

However, judging from the production and sales of complete vehicle products, BYD's production and sales of new energy vehicles in 2020 were both lower than the previous year, of which the annual production of new energy vehicles was 194100, down 14.73% from the same period last year; sales were 162900, down 12.52% from the same period last year. Overall, BYD's sales fell 7.46% for the whole of 2020.

It should be noted that the income of mobile phone components, assemblies and other products and automobiles, automobile-related products and other products also includes epidemic prevention materials. In 2020, BYD cross-border production aid masks, "3-day drawings, 7-day export cover machine, 10-day products", however, the annual report does not separately list the performance of epidemic prevention materials products.

"the profits of the mask business are difficult to separate, so the reference significance of profits is limited." A brokerage analyst told the Financial Associated Press.

According to the official WeChat account of BYD's fifth division, BYD currently has a maximum daily production of 100 million masks, making it the world's largest mask manufacturer; 192 melt-blown cloth production lines have been built, with a maximum daily output of 175 tons.

According to the financial report, BYD's gross profit margin in cars, auto-related products and other products reached 25.20% in 2020, an increase of 3.31% over the same period last year. Tesla's compound gross profit margin in 2020 was 20.9%. In terms of gross profit margin, BYD surpassed Tesla and other domestic car companies of the same level, such as SAIC, Geely Automobile and Great Wall Motor.

The increase in gross profit margin is partly due to the launch of BYD's new flagship car Hanhe modified flagship SUV Tang, and its deep vertical layout in the industrial chain. In 2020, the proportion of BYD models priced at more than 200000 yuan increased significantly, of which the Han became the first high-end C-class car with monthly sales exceeding 10,000 yuan.

In terms of vertical integration of the industrial chain, BYD has set foot in almost all of them except automotive glass and tires. Especially in the process of automobile intelligent, networked and electrified transformation, the self-development and self-control of its core components such as lithium iron phosphate battery and IGBT, and increasing external supply have also raised BYD's gross profit margin.

Each business segment will operate independently

In its 2020 financial report, BYD predicted that in the first quarter of this year, BYD would make a profit of 200 million yuan to 300 million yuan, an increase of 77.56% and 166.34% over the same period last year.

However, industry insiders believe that BYD's growth forecast for the first quarter is "lower than expected". Because the entire auto industry was hit hard by the epidemic in the first quarter of last year. From the previous to the first quarter of 2019, BYD's net profit for the current period was 750 million yuan.

"the lower-than-expected profit in the first quarter is expected to have a negative impact on market sentiment in the short term, but the core driver of the company's share price is the sales of new energy vehicles. This year, the main focus is the DM-i model." The above-mentioned brokerage analyst said.

According to the financial report, in the passenger car field, BYD DM-i super hybrid officially launched three models, Qin PLUS DM-i, Song PLUS DM-i and Tang DM-i;, after Han Dynasty, new energy vehicles will gradually switch blade batteries. In addition, with the effective control of the domestic epidemic and the gradual resumption of public travel, the launch of BYD Didi customized model D1 is expected to bring new growth momentum to the group.

"the new flagship Han, D1, E9 and other models form differential competitiveness under the pure electric platform and intelligent technology; the DM-i platform hybrid models may grow rapidly after the price is close to or even the same as that of traditional fuel vehicles." Huaxi Securities in the recent release of the research report analysis that.

According to the latest news, BYD Tang DM-i will go on sale at the Shanghai Auto Show in April this year. The new car has already started pre-sale, with a total of three configurations, with a pre-price of 19.78-224800 yuan after subsidy.

In addition to the core business of the vehicle, the spin-off of BYD's semiconductor business has also been mentioned again. In the financial report, BYD said that the spin-off and listing of BYD Semiconductor will help it to further enhance its multi-channel financing capacity and brand effect, and the Group will proceed to cultivate more market-competitive subsidiaries and achieve market-oriented operations.

After completing the strategic investment in Horizon, an automotive smart chip company, on February 9 this year, BYD signed a strategic cooperation contract with Horizon on March 2. "in the future, BYD and Horizon will concentrate resources and work together to identify market pain points, quickly land more popular products, and jointly promote in-depth exploration of scientific and technological research and development." Wang Chuanfu, chairman of BYD, said.

"follow-up BYD in semiconductors, power batteries and other plates are expected to continue to promote, in the intelligent field of layout breakthrough is also worth looking forward to." The above-mentioned brokerage analysts further analyzed that.