On the evening of July 9, JAC released its 2024 semi-annual performance forecast. According to preliminary calculations by the financial department, the company achieved significant performance growth during the reporting period: net profit reached 290 million yuan, a year-on-year increase of 86.86%. What is even more striking is that the company turned a loss into a profit, with a net profit of approximately 78 million yuan after deducting non-recurring gains and losses, compared with a negative 240 million yuan in the same period last year.
This good news quickly triggered a market response. After the market opened the next day (July 10), JAC's stock price rose sharply, with an increase of nearly 9% at one time, and finally closed with an increase of more than 6%. Some shareholders expressed with relief: "I have been building a position for a long time, and finally I see some movement!"
This marks that JAC Motors has finally turned positive after going through a difficult period of 7 years.
Image source: Jianghuai Automobile Group
After seven years, the non-net profit deduction has been "regularized"
JAC's non-net profit deduction has started a difficult journey since it achieved a profit of 844 million yuan in 2016. In 2017, the company's performance took a turn for the worse and fell into a quagmire of losses, with non-net profit deducting negative 93 million yuan. This year, the company's revenue fell by 6.33% year-on-year, and its net profit plummeted by 62.83%.
Faced with such a severe situation, JAC attributed the reasons to multiple factors such as declining SUV sales, declining new energy subsidies, and rising raw material prices. That year, JAC's SUV products sold 121,300 units, a year-on-year decrease of 154,200 units.
At the same time, in order to promote product upgrades and structural optimization, JAC Motors maintained high investment in safety, energy saving, environmental protection, intelligent network connection and intelligent manufacturing in 2017. However, in terms of R&D investment, the expenditure for the year was 1.997 billion yuan, a decrease of 7.47% from the previous year.
It is worth noting that due to the decline in the company's performance, JAC's management team has reduced their salaries, with the average reduction of 50% for directors and senior management teams. Among many car companies, the salary package of JAC’s senior management team is not outstanding. The 2018 financial report shows that the pre-tax income of Anjin, then chairman, was 540,000 yuan, and the pre-tax income of vice chairman and general manager Xiang Xingchu was 480,000 yuan, a decrease of 300,000 yuan and 160,000 yuan respectively from the previous year. .
In 2019, Jianghuai Automobile’s non-net losses narrowed significantly for a time. Thanks to strict budget control and all-round cost reduction and efficiency improvement, as well as new progress in the cooperation project with NIO, JAC's non-net profit for the year narrowed significantly to negative 980 million yuan, and its net profit even increased. Turn losses into profits.
According to Jianghuai Automobile, the cooperation project with NIO achieved new results this year. es6 was produced and delivered, and the cumulative delivery of es8 and es6 exceeded 20,000 units. The compensation and processing fees paid by NIO to JAC increased from 310 million yuan in the previous year to 600 million yuan.
However, the good times did not last long. In the following years, the company's non-net profit fell into an accelerated decline until 2022, when it fell to a record low of negative 2.795 billion yuan in the past ten years. This year, the company faced multiple challenges such as macroeconomic downturn and parts shortage, and both sales and performance declined. Among them, total operating income fell by 9.26% year-on-year, and net profit plummeted 8.9 times year-on-year.
According to the financial report, in the direct materials, direct labor, manufacturing expenses, fuel and power and other fields of JAC's manufacturing industry that year, material costs accounted for 90% of the total costs.
Fortunately, as sales begin to pick up in 2023, especially the substantial increase in overseas exports, JAC's operating conditions have finally turned around. Net profit returned to a positive value, and net losses after non-exclusions also narrowed significantly. In the first half of this year, JAC finally turned a profit after deducting non-net profits.
The reasons behind the positive return of non-net profit deductions
Although JAC's sales data in the first half of 2024 were not satisfactory - cumulative sales of 206,000 vehicles, a decrease of 7.57% from the same period last year, the company still achieved a positive return of non-net profit deductions , behind this achievement lies the company’s multi-faceted efforts and strategies.
In terms of sales structure, although the passenger car segment suffered a double-digit decline, the commercial vehicle segment's sales of 128,000 units achieved growth, balancing the overall sales performance to a certain extent. However, JAC's performance improvement does not rely solely on sales, but stems from a series of refined management measures.
Image source: Baidu Stock Exchange
Jianghuai Automobile said that the main reason for the expected increase in performance in the first half of this year is that the company continues to optimize its debt structure, and loan interest has been significantly reduced. Affected by exchange rate fluctuations, exchange gains have increased significantly, making financial expenses higher than the same period last year. Significantly reduced.
Judging from the first quarter financial report of 2024, JAC’s operating conditions have shown significant improvement. Net loss narrowed to 10 million yuan, a significant year-on-year increase of 89.4%.
Even more gratifying is that the company's overall gross profit margin increased to 11.44%, a month-on-month increase of 0.61 percentage points. Among them, the gross profit margins of passenger cars and commercial vehicles reached 8.7% and 11.9% respectively, a year-on-year increase of 5.85 and 3.05 percentage points respectively, showing the effectiveness of product structure optimization and cost control.
At the same time, JAC has also made significant progress in cost control. Sales, management and R&D expense rates have all dropped significantly, further increasing profit margins.
Based on JAC's performance improvement momentum, Huaxin Securities maintains a "buy" investment rating for JAC. It predicts JAC's 2024 revenue will be 48.49 billion yuan and net profit will be 260 million yuan.
-
-
-
-
-
-
-
-
-
-