Recently, Changan Automobile released its 2024 interim results report. The financial report shows that in the first half of 2024, Changan Automobile achieved operating income of 6.723 billion yuan, a year-on-year increase of 17.15%; The net profit attributable to shareholders of listed companies was 2.832 billion yuan, a year-on-year decrease of 63.00%; The net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 1.169 billion yuan, down 5.89% year-on-year; During the reporting period, the total non-recurring profit and loss of Changan Automobile was 1.663 billion yuan, of which 1.471 billion yuan was included in the current profit and loss.
Sales volume is the main reason for the increase in operating income. In the first half of the year, the cumulative sales volume of Changan Automobile was 1.334 million units, up 9.7% year-on-year, which was the highest in the past seven years. Among them, the sales volume of new energy of independent brands was 299,000, a year-on-year increase of 69.9%; The overseas sales volume of independent brands was 203,000 units, a year-on-year increase of 74.9%; However, the high sales volume pushed up the revenue, but the profit dropped sharply by 63.00%. Changan Automobile said that it was mainly due to the acquisition of Deep Blue Automobile in the first quarter of 2023, and confirmed a non-recurring profit and loss of 5.021 billion yuan. After excluding the impact, Changan Automobile’s non-net profit decreased by 5.89% in the first half of the year. At the same time, although the sales volume has increased, it is not as profitable as before. In the first half of the year, Changan Automobile’s gross profit margin was 13.8%, down 2.54 percentage points compared with the same period. Some analysts pointed out that the decline in gross profit margin was due to the decline in the company’s fuel vehicle share and the loss of new energy vehicle brands under the background of industry price war.
At present, Changan Automobile’s main new energy brands include Deep Blue Automobile and Aouita Technology, but the financial performance of these two companies is still mixed. The sales revenue of Deep Blue Automobile and Aouita has increased substantially, and the losses have also narrowed, but they are still at a loss, which means that Deep Blue Automobile and Aouita still need to rely on their parent companies for "blood transfusion".
The financial report shows that in the first half of 2024, the revenue of Deep Blue Automobile was 13.981 billion yuan, with a net loss of 739 million yuan and a loss of 320 million yuan in the same period; Avita’s revenue was 6.152 billion yuan and its net loss was 1.395 billion yuan, a decrease of 360 million yuan compared with the same period. Changan said that due to the improvement of product structure, Deep Blue Automobile promoted cost reduction and efficiency increase, and its profit loss decreased year-on-year; Aouita benefited from the gradual enrichment of product lines, the improvement of product benefits and the year-on-year reduction of profit losses.
The data shows that the sales volume of Deep Blue cars in the first half of the year was 71,000, a year-on-year increase of 73.6%. Deng Chenghao, general manager of Deep Blue Auto, said during the 2024 Chengdu Auto Show that if Deep Blue Auto sells more than 30,000 vehicles a month, it can achieve profitability. At present, relying on the support of Chang ‘an, Deep Blue operates in the form of "light assets" in terms of factories and channels, and 90% of its distribution stores have achieved profitability.
As for Aouita Automobile, although its market size is not as large as that of Deep Blue Automobile, it delivered 21,000 vehicles in the first half of the year, which was double compared with the same period. Recently, Aouita decided to enter the hybrid market, and expanded its sales volume through pure electric and hybrid power layout. At the same time, Aouita spent 11.5 billion yuan to acquire a 10% stake in Huawei Yinwang Company, which will strengthen the connection between Aouita and Huawei, and take advantage of the latter’s technical awareness in consumers’ minds, thereby enhancing brand tenure and brand sales.
According to the plan of Changan Automobile, the sales target of Changan New Energy is 750,000 vehicles in 2024, and the annual targets of Changan Qiyuan, Deep Blue Automobile and Aouita are 250,000, 280,000 and 90,000 vehicles respectively. Judging from the known sales volume, as of the end of August, the completion rate of the sales target of the above brands was less than 40%, and the sales pressure was huge. To this end, Changan Automobile will continue to exert its efforts in the new energy vehicle market in the second half of the year, and will launch a number of brand-new and redesigned models such as Qiyuan E07, Qiyuan, Qiyuan, and the fourth generation CS75PLUS.
In terms of joint venture brands, Changan Ford sold 111,600 vehicles in the first half of the year, up 13.36% year on year, while Changan Mazda sold 36,800 vehicles, up 14.44% year on year. Although the joint venture brand is no longer the "profit cow" of Changan Automobile, Changan Ford still contributed 1.821 billion yuan of profit to Changan Automobile, up 127.86% year-on-year, and still brought 619 million yuan of investment income to Changan Automobile.