Editor introduction: Without the support of major institutions, its stock price has been falling all the way, and its company executives also announced in June that they would reduce their holdings.
Picture/official website
Recently, Great Wall Motor released its first quarter results. According to the announcement, its net profit attributable to shareholders and non-net profits in the first quarter declined, and government subsidies accounted for half of the net profit attributable to shareholders.
But in fact, Great Wall Motors' decline had already appeared last year, and its profits both fell sharply in the fourth quarter of last year. In the 2021 annual report, although the revenue was 100 billion yuan, the net profit attributable to the shareholders was only a few billion yuan, and the skyrocketing costs greatly squeezed its profit margin. The significant increase in cost of
is to realize Great Wall Motor's five-year plan, but at present, its results seem to be unsatisfactory.
Interestingly, after the stock price of Great Wall Motors last year, it was continuously raised after it released its five-year plan in the first half of the year. The stock price soared and attracted countless retail investors. At the same time, major institutions and executives frequently reduced their holdings. According to the highest point of the stock price at that time, it has now fallen by one-third.
Increase revenue but not profit, and the performance decline has been seen
Recently, Great Wall Motor released its operating data for the first quarter of this year.
According to the first quarter report, Great Wall Motor achieved revenue of 33.619 billion yuan, and increased by 8.04% year-on-year; net profit attributable to shareholders was 1.634 billion yuan, a year-on-year decrease of 0.34%; net profit excluding non-network was 1.303 billion yuan, a year-on-year decrease of 2.41%.
In other words, Great Wall Motors increased revenue in the first quarter but did not increase profit, and its net profit attributable to shareholders declined slightly, while non-net profits have recorded negative numbers for the fourth consecutive quarter. Not only that, there is also a government subsidy of 800 million yuan in its non-recurring profit and loss items, accounting for half of the net profit attributable to the parent.
Overall, Great Wall Motors' growth rate has slowed down, and its performance has also maintained a superficial calm by relying on government subsidies.
. Just before that, Great Wall Motors had just released its 2021 results.
According to the annual report, the operating income in 2021 was 136.405 billion yuan, a year-on-year increase of 32.04%; the net profit attributable to shareholders of listed companies was 6.726 billion yuan, a year-on-year increase of 25.43%.
However, although its overall performance growth last year, its overall decline has actually emerged in the annual report. It can be seen that its revenue is as high as 100 billion yuan, but its net profit attributable to shareholders is only a few billion yuan. The difference between the two is zero, and the net profit attributable to shareholders is not high. Among them, the subsidy amount for new energy vehicles is 1.627 billion yuan, and its net profit margin is only 4.93%.
If you want to say that reading the annual report is not obvious enough, then it depends on its performance in the fourth quarter of last year.
2021 Great Wall Motor's net profit attributable to shareholders was 1.781 billion yuan in the fourth quarter, a year-on-year decrease of 35.82%, and the net profit attributable to shareholders was 550 million yuan, a year-on-year decrease of 71.93%.
Although Great Wall Motor's overall performance grew in 2021, its net profit attributable to shareholders actually declined severely and even slashed its knees in the fourth quarter.
Cost soared sharply, and the five-year plan was under pressure
In fact, Great Wall Motors' annual non-recurring net profit has also shown a downward trend in recent years.
data shows that between 2018 and 2020, Great Wall Motor's non-net profit at the end of each period increased by -9.53%, 2.52%, and -3.77% year-on-year. In other words, in addition to the slight increase in 2019, its non-net profits in 2018 and 2019 both declined.
At the same time, its gross profit margin has also declined. According to data, Great Wall Motor's gross profit margin reached 28.61% in 2013, but it fell to 16.83% in 2019, and its gross profit margin further fell to 16.16% in 2021.
gross profit margin is falling like a slide, and its costs and expenses are also rising, which squeezes the profit margin.
In 2021, Great Wall Motor's operating costs reached 114.367 billion yuan, a year-on-year increase of 33.71%. I am afraid that even the growth rate of revenue is below its cost growth rate. The over-squeezed profit margin caused by Great Wall Motors to have a revenue of 100 billion yuan, but its net profit attributable to shareholders was only a few billion yuan.
For the reasons for the increase in cost expenditure, Great Wall Motors' five-year plan has to be mentioned.
In mid-last year, Great Wall Motor Chairman Wei Jianjun said at the 2025 strategic press conference: It is necessary to achieve global annual sales of 4 million vehicles by 2025, of which 80% are new energy vehicles, with operating income exceeding 600 billion yuan. In the next five years, the cumulative R&D investment will reach 100 billion yuan.
In order to achieve the goal as soon as possible, Great Wall Motors has continuously launched new cars. In 2021, its five major brands launched a total of 8 new cars, which has also caused a surge in R&D and marketing expenses.
In 2021, its R&D expenses increased to 4.49 billion yuan, an increase of 46.36%; sales expenses reached 5.192 billion yuan, an increase of 26.53%.
In addition, Great Wall Motors implemented a multi-brand system and began to establish an organizational structure of "one car, one brand, one company" in 2021, which has led to an increase in employee expenditures.
Last year, Great Wall Motors' management expenses were 4.043 billion yuan, a year-on-year increase of 58.39%. Great Wall Motors also stated that it was caused by the increase in the number of managers and the increase in equity incentive fees.
has a large amount of cost investment, and combined with the results of the first quarter of this year, it is inevitable that it is a bit sad.
According to data from the China Passenger Car Association, among the 15 auto companies, Great Wall Motors had the lowest year-on-year growth rate, with sales of only 15,000 vehicles in March.
At the same time, its main brand tank brand suffered a suspension of production; the sales of Haval brand fell by 25.13% year-on-year; the sales of Great Wall Pickup fell by 27.68% year-on-year.
. Regarding its five-year plan, Shen Meng of Xiangsong Capital believes: "Combined with the negative impact of the epidemic and the economy on consumer demand, it may last for a long time, which makes it more difficult for Great Wall Motor to achieve its goals."
Major institutions and senior executives reduced their holdings at high prices
Perhaps due to the impact of performance, Great Wall Motor's stock price showed a stable decline.
At the end of October last year, Great Wall Motor's stock price reached its peak of 69.8 yuan per share, and its total market value reached 644.6 billion yuan, it continued to decline. As of April 27, its share price closed at at 22.82 yuan per share, which has fallen by two-thirds from its highest point last year.
Picture/Jiufang Zhitou
However, unlike the decline in the stock price in the second half of the year, its stock price in the first half of the year increased rapidly because Great Wall Motors released its five-year plan. Affected by this, Great Wall Motors was once given a "increasing holdings" and "buy" rating by major institutions, and attracted the attention of retail investors.
Judging from the situation at that time, Great Wall Motors, which had revenue of only 103.308 billion yuan in 2020, shouted a revenue slogan of reaching over 600 billion yuan. The purpose is to really achieve the goal, or to take the dividends after the slogan, which is worth thinking about.
Coincidentally, after the slogan was shouted, unlike the increase in holdings that were highly watched by retail investors, it seemed that there was something wrong, and major institutions began to frequently reduce their holdings.
htmlOn July 28, Schroeder reduced his holdings of Great Wall Motors by 10.1745 million shares at an average price of HK$30.3077 per share. After the reduction of holdings, Schroder's latest holdings were 243,651,500 shares, and the shareholding ratio dropped from 8.19% to 7.86%.
lost the support of major institutions, and its stock price fell all the way, and its company executives also announced in June that they would reduce their holdings.
11 On November 12, the company's deputy general manager Zhao Guoqing and the board secretary Xu Hui reduced their holdings of the company's shares by 452,500 through centralized bidding, with a total reduction of more than 27.92 million yuan.
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. Major institutions and executives who reduced their holdings at high levels finally gained a lot, but the retail investors who took over became leeks.
Original author: Tianyi
Editor: Qiu Tianyi
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