continued to repurchase the company's stock, but also failed to return SAIC's stock price to its previous peak.
On the evening of December 1, SAIC Motor Corporation (abbreviation: SAIC; stock code: 600104) announced that as of November 30, 2020, it had paid a total of 1.321 billion yuan to buy back 70.1 million shares of the company and repurchased shares. The quantity accounts for 0.60% of the company's total share capital; the highest repurchase price is RMB 19.99 per share, and the lowest price is RMB 17.81 per share.
It is worth noting that since July of this year, SAIC Group has continued to return to the company's stock. SAIC said that the share repurchase was based on confidence in the company's sustainable development and company value.
However, in the eyes of industry insiders, SAIC Group’s performance has continued to decline since 2019; BYD’s market value was surpassed in October this year, losing its long-held position as the No. 1 market value of A-share auto companies. It is SAIC’s share repurchase that boosted Reasons for market confidence. According to statistics from the Z1z
Travel Association, in the first three quarters of this year, SAIC’s cumulative vehicle sales were 3.613 million, ranking first among domestic automakers, but this performance fell 18.1% year-on-year; at the same time, SAIC’s first three quarters revenue year-on-year It fell 14.81% to 498.662 billion yuan, and the net profit attributable to listed shareholders fell 19.93% year-on-year to 16.648 billion yuan.
From the perspective of overall scale and market sales, SAIC is the largest automobile group in China. However, with the accelerating arrival of the new energy vehicle era, it faces the rise of a number of new automakers such as BYD, Weilai, Ideal, and Xiaopeng. , The current SAIC Group seems to be somewhat powerless.
Comparison of share price trends between SAIC and BYD in recent years
Source: China Galaxy Securities
1
-THE FIRST-
Both its own brand of fuel vehicles and new energy have lost both
Volkswagen, General Motors and other joint venture brands in the domestic market. The shortcomings are fully exposed.
"Based on the possibility that the epidemic is still spreading globally in the second half of the year, the risk of instability and uncertainty in the economic situation is still large, and the global industrial chain collaboration is facing challenges, the company expects that the domestic auto market sales in 2020 will be approximately 23.3 million- 24.1 million vehicles, the year-on-year growth rate dropped by 10% to 7%.” SAIC Motor released a signal that its full-year performance is not optimistic in its semi-annual report. Insiders in the industry believe that SAIC has overemphasized objective reasons. In fact, after the first decline in net profit in the past ten years of the SAIC Group's overall listing in 2019, it started a performance downturn model.
SAIC Group’s profits have declined since 2019.
According to the company’s annual report, the “Enterprise Observer” has compiled
. “The joint venture brands SAIC Volkswagen and SAIC GM encountered sales bottlenecks while the new energy vehicle brands failed. These two factors resonated and made SAIC’s Performance fell to the bottom." Senior auto analyst Ren Wanfu told the "Enterprise Observer".
Statistics from the China Automobile Association show that the total national vehicle sales in the first nine months of this year was 17.116 million, a year-on-year decrease of 6.9%; among the major companies of SAIC, SAIC Volkswagen, SAIC-GM, SAIC-GM-Wuling, and SAIC passenger car sales were sequentially year-on-year Down 25.9%, 22.0%, 14.5% and 12.6%, the decline has exceeded the industry average.
"Sales of joint ventures such as SAIC Volkswagen and SAIC GM are weak, and there are objective factors in the cyclical adjustment of Volkswagen and GM brand products. What needs attention is that SAIC’s self-owned brand passenger cars have long been weak in market competition. It is difficult to blame external factors." Ren Wanfu pointed out. The core technology of
is the fate of independent brands of Chinese automakers. In order to make up for shortcomings in core technologies, SAIC has invested a large amount of research and development funds to jointly develop transmissions and engines with the multinational car company General Motors, and share intellectual property rights worldwide.
SAIC once confidently declared that its technical strength has been able to compete with joint venture brands. The "A-framework" created by SAIC Heavy Gold is known in the industry as China’s first self-developed complete vehicle architecture platform; the mastery of the core technology of the powertrain has led SAIC to formulate the "2020 Roewe and MG dual independent brands to achieve sales 1 million vehicles" goal.
things backfired. According to the information released by the Passenger Association, the Shanghai Auto Roewe as an example, theThe cumulative sales of RX5, small SUV product RX3, and medium and large SUV product RX8 were 123,000, 9,311, and 6412, respectively. None of them entered the market mainstream models, and their sales could not be comparable to similar products of Great Wall, Changan, and GAC Trumpchi. ratio.
“Although they have mastered a number of core technologies, both Roewe and MG have the problems of chaotic market layout, lack of product highlights, and low market awareness, so consumers do not buy it.” Shi Yang, an automobile commentator, pointed out. While the self-owned "dual-brand" market for fuel vehicles was frustrated, SAIC Motor Group also suffered in the field of new energy vehicles.
In 2014, the country started the first year of new energy vehicles. In 2015, SAIC Group announced a fixed increase of 15 billion yuan to invest in new energy, intelligent vehicles and other cutting-edge directions. It can be said that SAIC is the fastest in the country to launch an overall new energy strategy and has One of the car companies with more complete new energy product solutions.
"Unfortunately, in the market competition surrounded by new car-making forces, the lack of product highlights and inaccurate market positioning have made SAIC Group's new energy vehicles'get up early and catch up late.' Independent Auto Analysis Teacher Zhang Xiang told the "Enterprise Observer".
The top ten domestic new energy vehicle sales in September 2020
Source: Travel Federation
Shiyang and many other industry insiders believe that SAIC has put too much emphasis on the overall strategy at the expense of market sensitivity and the flexibility of rapid adjustment strategies . For example, the new energy vehicle product line is placed in the independent brands Roewe and MG under the subsidiary SAIC Passenger Vehicle, so that the new energy vehicles are also trapped in the aforementioned situation of the Roewe and MG brands. The complex and chaotic product line of
has led to the poor performance of SAIC's new energy vehicles in the range of less than 100,000 yuan. For example, the Roewe i5 and i6 are still traditional car models, and the prices are fighting each other. The attractiveness is far less than the well-positioned rising star Wuling Hongguang MINI EV and Great Wall Euler Panda.
The high-end new energy brand Roewe marvel X, which sells for nearly 300,000 yuan after subsidies, is not attractive to middle-income people because of its serious shortage of brand power. According to data from the Travel Federation, the cumulative sales of the Roewe marvel X in the first nine months of this year have been less than 100.
“By contrast, BYD’s market layout looks very clear.” Zhang Xiang, an independent auto analyst, pointed out that in recent years, Qin, which has a subsidized price of less than 100,000, has gradually expanded to a mixed range of 200,000 to 300,000 yuan. Tang DM is an electric SUV, Han DM is a hybrid sedan, and Han EV is a pure electric sedan. BYD’s new energy products have only one competitive product in each price range and in different categories. "The more critical issue is that BYD’s product features are more prominent, making it easier to stand out from the competition in the market. For example, BYD’s “Han” series are in short supply in the market due to the blade batteries with both safety and high energy density. Since its establishment, only one model of the ideal car has been released, and it is sought after by consumers because of its unique program-extending features." Zhang Xiang said.
2
-THE SECOND-
The hidden dangers of SAIC’s “No. 1 Project”
"Tesla, BYD, Weilai and other new car manufacturers are rising rapidly. In such a competitive environment, SAIC also urgently needs a high-end Electrified brands compete for the market in order to increase the company's value and overall valuation." A person in charge of the investment department of a domestic securities company who has investigated SAIC said to the "Enterprise Observer."
At the end of November, the "No. 1 Project" presented by SAIC Motor-Zhiji Automobile attracted the attention of the industry.
"The automotive industry is undergoing a major transformation of'everything can be digitized'. Such changes will have a subversive impact on the automotive industry, just like the iPhone 4 strangling functional machines. Now, we are on the eve of subversion." Liu Tao, deputy head of the group, said to the outside world.
Regarding Zhiji Auto, SAIC said that based on the background of the times and the profound changes in the automotive industry, SAIC started preparing for the “Zhiji Auto” high-end smart pure electric vehicle project two years ago and designated it as the “One No. Project". As a new carrier of SAIC Group's transformation and development, Zhiji Automobile has carried the important task of SAIC Group's mechanism reform and innovation and brand breakthrough.
It is understood that the chairman of SAIC Group Chen Hong personally took charge of the establishment of Zhiji Automobile, which was established by SAIC Group and Shanghai Pudong.The new area and Alibaba Group jointly created the three parties, with an initial financing scale of 10 billion yuan, setting the largest initial financing scale for domestic car manufacturing.
SAIC Group stated that Zhiji Auto is a user-oriented automotive science and technology company that "drives value with user data" and is the world's first corporate form of a future company. Among the main partners, Shanghai Pudong New Area provides core technology resources such as AI and chips; Alibaba provides ecosystem resources such as user big data and Alibaba Cloud. Zhiji car is expected to hit the road next year.
However, SAIC Motor's high-profile publicity on the "No. 1 Project" of Zhiji Auto did not seem to surprise more automotive professionals.
"Actually, all the forward-looking technologies promoted by SAIC in Zhiji Auto have been reflected in its current models, especially the R series under Roewe. It is possible to have a new breakthrough technology in Zhiji Auto. And the difficulty is very large." Senior automotive analyst Ren Wanfu said. In comparison, SAIC does not have BYD’s accumulation of batteries, so it is difficult to make revolutionary progress in the underlying battery technology; and in the field of autonomous driving, even if It is the world's top companies such as Google Waymo and Tesla. At present, they are facing relatively obvious technical bottlenecks in L4 unmanned driving technology in all scenarios.
During the Guangzhou Auto Show in November this year, SAIC Group officially announced that it will separate the new energy product "R Series" from the SAIC Roewe brand. It is worth noting that, according to SAIC Passenger Vehicle's previous plan, the R brand has three series of flagship MARVEL, sedan ER and SUV ES. The promotional selling points are also user-centric, 5G intelligent forward-looking technology, and super battery life.
"The product performance is similar. How to effectively distinguish the R series from the Zhiji car in the market, so as to avoid the chaotic competition that SAIC's independent dual-brand Roewe and MG have shown in the market, and ultimately become obscured. This is SAIC. Another test before the group." Shi Yang and many other industry insiders pointed out.
At present, Dongfeng, Changan, Baoneng, Geely Lynk & Co, BAIC and other auto companies are also accelerating the deployment of high-end new energy vehicles. How to stand out in the severely homogenized market competition is the prospect of investors for Zhiji Auto The main concern.
"If Zhiji Auto wants to succeed, the biggest variable lies in Alibaba." Many industry insiders expressed this view. Back then, SAIC's passenger car Roewe RX5 succeeded in market sales. A key reason was that it was equipped with SAIC Motor. Zebra system jointly developed with Alibaba. The Zebra system is an Internet intelligent system including voice recognition, remote car search, mobile payment and other functions. The Roewe RX5 model thus created the domestic automotive Internet era.
It is undeniable that the Zebra system is the largest engine of SAIC's high-speed development in passenger cars. However, because Alibaba was not satisfied with the customer of SAIC passenger cars, it sold the Zebra system to Skoda, Peugeot Citroen, Hongqi and many other car companies. As competitors gradually adopt the Zebra system, the uniqueness of SAIC Roewe RX5 has been greatly reduced, and market sales have plummeted.
"From the past, the exclusiveness of Ali Auto's ecology will be a key factor in the future success of Zhiji Auto." Many industry insiders pointed out.
3
-THE THIRD-
Will SAIC “Zhiha” repeat the battle for dominance
"This time the launch of the Zhiji car, SAIC is also the last fight. Once this attempt is declared fruitless again, then SAIC will lose more Time is the last period of strategic opportunity for the domestic new energy vehicle market. "Zhiji Auto is regarded by the industry as a lasting battle that SAIC cannot lose.
SAIC once stated that the name is taken from the "Zhiji" in the "Book of Changes", which means to consider everything with wisdom, while the "wisdom car" implies the creation of a new era of intelligent travel with the symbiosis of people and vehicles. The equity structure behind
Zhiji Auto attracts more attention from outsiders. According to official disclosures, in the Zhiji car project, SAIC Motor holds 54% of the shares, Shanghai Pudong New Area and Alibaba Group each hold 18%, and employees and other investors hold 10%. According to SAIC Group, there are currently more than 200 people in the Zhiji Auto project team, half of whom are from within SAIC Group. The total number is expected to reach 300 by the end of the year.
Industry insiders and investors who are optimistic about the development prospects of Zhiji Auto believe that SAIC’s joint Alibaba deployment of Zhiji Auto is an innovation in the operation mode of state-owned auto companies and has establishedA more open capital structure.
"In the Zhiji car project, SAIC not only regards Ali as a strategic supplier, but also allows Ali to participate in shares, hoping to deeply bind Ali. And Zhiji Automobile can only rely on Ali's innovation in the Internet of Vehicles and artificial intelligence. In order to make a bloody road in a market with severe homogeneity."
From the perspective of Alibaba, investing in Zhiji Auto is a new start for its car-making movement. Independent auto analyst Zhang Xiang said that for Ali, investing in Zhiji Auto means directly entering the field of car manufacturing. The advantage is that compared to self-built cars, with SAIC’s advantages in vehicle engineering, supply chain, quality control, and channels, Ali does not need to start from scratch, and at the same time can devote more of its resources to the Internet of Vehicles and artificial intelligence. , High-precision navigation to further enhance the advantages. More people in the industry believe that the state is currently investigating the overcapacity of domestic new energy vehicles, and Alibaba has invested in Zhiji Auto and found a strong backing for its car manufacturing. At the same time, if Zhiji Auto seeks to go public in the future, Alibaba will also earn a considerable income.
It seems that Zhiji Auto has become a win-win business between SAIC and Alibaba. On the other hand, voices that are not optimistic about the cooperation between SAIC and Alibaba have also emerged one after another. Among them, the views of He Xiaopeng, chairman of Xiaopeng Motors, have attracted the attention of the industry.
Many insiders believe that He Xiaopeng's statement is not without reason. As mentioned above, Zhiji Auto is not the first cooperation between SAIC and Alibaba. The hot sales of
Roewe RX5 has also triggered a dispute between SAIC and Alibaba over the dominance of Zebra Network and its basic ecosystem. As a Zebra network solution provider, Alibaba sold Zebra Networks to other car companies outside of SAIC for the sake of enriching the system ecology; SAIC Group regards Zebra Networks as its own exclusive car networking team and opposed it Alibaba sells Zebra Network. Views and positions are diametrically opposed, which eventually led to the escalation of the battle for the right to speak on the zebra network, and the zebra team reshuffled.
"This internal battle for Zebra Networks has caused it to miss the golden development period of intelligent network technology. Under the continuous internal friction, the development of Zebra system led by Alibaba has stagnated, and the sales of SAIC Roewe RX5 market have been sluggish. Ending." Zhang Xiang said.
The "China Intelligent Connected Market Development Trend Report" released by the third-party agency IHS Markit also shows that in the market share of new car sales from January to July this year, the actual sales of new cars equipped with Baidu Internet of Vehicles accounted for 49%, and Tencent accounted for The ratio is 35%, while Alibaba accounts for 16%, ranking last among the BAT Big Three.
"This time, SAIC, Shanghai Pudong New Area and Alibaba have joined Zhiji Auto. Will the battle for dominance that year break out again? Once it breaks out, will the situation become more chaotic?" In the opinion of many industry insiders, How to balance the interests of all parties and avoid conflicts will undoubtedly be the key to how far Zhiji Auto can go.
