SAIC Motor 2019 net profit down by 28.9% YoY

Shanghai (Gasgoo)- SAIC Motor announced its annual net profit attributable to shareholders slumped 28.9% year on year to RMB25.603 billion, showing the first-time downturn since the group went public in 2011.

Excluding the influence of certain no-recurring gains and losses, the net profit slid 33.41% to RMB21.581 billion. Much of the blame has been laid on the decline in annual vehicle sales volume, the intensified imbalance between supply and demand caused by the transition to the China Ⅵ emission standard to the China Ⅴ, and the reduction of subsidy on NEV purchase.

According to the latest annual report, SAIC Motor earned RMB843.324 billion in gross revenue, facing a year-on-year decrease of 6.53%.

The Chinese biggest automaker sold 6,237,950 new vehicles through 2019, recording a year-on-year decrease of 11.54%. As of November 2019, SAIC Motor had posted sales downturn for 15 consecutive months.

However, the cash flow generated from operating activities netted RMB46.272 billion with a year-on-year hike of RMB415.53%, mainly thanks to the decline in the loans issued to clients by the group's subsidiary SAIC Finance.

“Confronted with the severer-than-expected downturn in domestic auto market, the company is saddled with growing challenges and pressures,” said SAIC Motor. Thus, it endeavors to seize the structural opportunities in NEV field and overseas markets to pull through the cold winter.

With around 185,000 units sold last year, SAIC Motor gained 30.4% year-on-year surge in 2019 NEV sales volume. Besides, the volumes of vehicles exported to and sold in overseas markets jumped 26.5% to roughly 350,000 units.

The development trend of COVID-19 pandemic has been considered as the biggest risk factor to the auto market performance for the year of 2020. The rapid viral spread outside China is aggravating the downward pressure on the world’s economy and the supply risks of the global automotive supply chain.

On the other hand, the pent-up consumers' demands are bound to be unleashed with the pandemic fading away. More governmental policies and incentives are expected to be issued to spur consumption, stabilize employment and increase the investment in infrastructure construction. Based on the judgement, SAIC Motor expects China auto sales in 2020 to reach 22.9 million to 23.8 million units, sliding 11.6% to 8.1% compared to 2019.

Furthermore, SAIC Motor sets a sales goal of 6 million complete vehicles for 2020 with an expected revenue of RMB780 billion (photo source: SAIC Motor's WeChat account).