Great Wall Motor posts 13.64% drop in 2019 net profit, but revenue from overseas business jumps

Shanghai (Gasgoo)- Great Wall Motor Company Limited (GWM) reported an annual net profit attributable to shareholders of 4.497 billion in 2019, a year-on-year decline of 13.64%.

Its total operating revenue slid 3.04% from a year ago to RMB96.211 billion. To be specific, the revenue from the sale of automobiles shrank 5.84% year on year to roughly 86.251 billion, while the value generated from the sale of auto parts and others soared 42.78% to RMB8.857 billion. The significant growth owes much to the increase in the revenue of export sales of auto parts, and the fee of transportation services stripped out from revenue from the sales of complete vehicles at market price and reclassified as part of transportation income.

Despite the decrease in totals, the revenue from overseas business still zoomed up 66.61% from the year-ago period to RMB5.522 billion, the automaker said via its WeChat account.

The full-year R&D expenses surged 55.8% to RMB2.716 billion. GWM said it is building an open innovation platform to jointly advance the R&D of key technologies such as 5G, Internet of Things, self-driving, and V2X, etc., to speed up industrialization of generic technologies.

In the field of intelligent network, in July 2019, the group teamed up with eight firms, including Tencent, AutoNavi, Baidu, China Telecom, China Mobile, Huawei, and Qualcomm, to found a GTO (GreatWall Totally Online) intelligent ecosystem, and to develop “5G+AI”-enable technologies and experience-driven robots.

GWM is primarily engaged in production and sale of pickups, SUVs, sedans as well as relevant auto parts. The annual report shows that the group sold 1,058,648 vehicles in 2019, achieving a year-on-year increase of 1.43%.

This is a rare blooming trend against the downturn in overall auto market, which faced strong headwind from the slowdown in domestic economic growth and political factors like the Sino-U.S. trade dispute.

Striving to maintain a sale growth, GWM kept launching more new models last year, including the Haval H6 GT, the Haval F7x, the 2020 Haval H9, and the 2020 VV6. In the second half of 2019, the group introduced an all-new pickup brand—“Great Wall Pao”, under which both PV and CV models were launched.

Additionally, the automaker stepped up its overseas offensive with its vehicle exports leaping 44.93% year over year to 65,404 units in 2019. During the year, the Tula factory in Russia was completed and put into operation.

Regarding the external cooperation, Spotlight Automotive, a 50/50 joint venture between GWM and BMW, officially kicked off on November 29.

Involving a total investment of RMB5.1 billion, the project is designed to have an annual standard production capacity of 160,000 vehicles and around 3,000 employees. According to the plan, the products will go into, by brand, the respective marketing and service networks of GWM and BMW.