BYD’s net profit declined in the first three quarters, which analysts believe is inseparable from the price increase of bulk raw materials.
On October 28, BYD Co., Ltd. (002594, hereinafter referred to as “BYD”) released its third-quarter financial report.
The financial report shows that BYD achieved revenue of 54.307 billion yuan in the third quarter, a year-on-year increase of 21.98%; net profit attributable to shareholders of listed companies was 1.270 billion. Yuan, a year-on-year decrease of 27.50%.
In the first three quarters of 2021, BYD achieved revenue of 145.192 billion yuan, a year-on-year increase of 38.25%; net profit attributable to shareholders of listed companies was 2.443 billion yuan, a year-on-year decrease of 28.43% .
In terms of sales volume, from January to September 2021, BYD’s entire series sold 452,744 vehicles, a year-on-year increase of 68.32%; of which sales of new energy vehicles were 337579, a year-on-year increase of 204.29 %.
While auto sales are growing strongly, BYD’s profits have failed to achieve year-on-year growth.
In this regard, Hu Danni, an analyst at Head Leopard Research Institute, told reporters that the decline in net profit is closely related to the increase in upstream raw material costs. Since the beginning of this year, the prices of bulk commodities such as copper and aluminum, the main raw materials for automobiles, have risen rapidly.
Previously, BYD’s “Battery Price Increase Contact Letter” showed that the price of LiCoO2, a raw material for lithium battery cathodes, has risen by more than 200% this year, and the price of electrolyte has risen by more than 150%. The supply of anode materials continues to be tight.
In terms of R&D investment, BYD’s R&D expenses in the first three quarters of 2021 will be 5.234 billion yuan, a year-on-year increase of 6.99%. “The increase in R&D expenses has a certain impact on the company’s net profit, but it is not the main factor,” Hu Danni believes. “The reason for the sharp drop in the company’s net profit is mainly due to the sharp increase in upstream raw material prices.”
Zhang Xiang, a researcher at the Automotive Innovation Center of North China University of Technology, believes that it may be necessary to reshuffle the industry and clear excess capacity before BYD and other leading new energy car companies will usher in a steady increase in profits year by year.
Zhang Xiang told reporters that from the perspective of the entire industry, one partyOn the other hand, the decline of government energy subsidies year by year will have a significant impact on corporate profits. On the other hand, China’s new energy vehicle market is too competitive, with serious overcapacity. “New energy car companies, especially new car manufacturers, are in a state of burning money to build cars. Many smart cars are sold at prices lower than the cost of the company. Auto companies such as BYD also have to control their prices to increase their competitiveness in the market.”
Regarding the growth of BYD, Huang Yiqing, an analyst at Head Leopard Research Institute, believes that BYD is still on the rise. During the reporting period, the spin-off and listing of BYD Semiconductor Co., Ltd. is in progress. Huang Yiqing said that the spin-off and listing of BYD’s semiconductor business will provide a path reference for the spin-off of power batteries, and the spin-off of power batteries is expected to accelerate.
Huang Yiqing introduced that the blade battery has been supplied to car companies such as Changan, Xiaokang, and Beiqi in the domestic market, and has been awarded Toyota’s designated projects overseas, and is expected to be supplied to Ford, Mercedes, etc. Car companies.
At the close of trading on October 29, BYD (002594) closed at 311.31 yuan per share, up 1.08%, with a total market value of 819.8 billion yuan.