It is widely known that the property market was booming last year. As a matter of fact, the vehicle market was also robust. Domestic vehicle behemoths recorded high growth in the sales of their own brand vehicles and new-energy vehicles. Among nearly 20 A-share vehicle manufacturers which have released their 2016 annual reports, over half of them recorded year-on-year growth in profit. The outstanding sales results boosted their confidence in proposing huge cash bonus.
New-energy vehicles saw strong growth
SAIC Motor Corporation Limited (600104.SH) released its 2016 annual report on April 6. So far, all of the three top vehicle manufacturers, namely BAIC Motor Corporation Limited (01958.HK), Guangzhou Automobile Group Co., Ltd. (02238.HK; 601238.SH) and SAIC Motor, have released their annual reports. The top three vehicle manufacturers not only recorded surging growth in the sales of their own brands but also maintained high growth in new0energy vehicles.
The annual report of SAIC Motor shows that the company realized a net profit of 32.009 billion yuan in 2016, representing an increase of 7.43 percent year on year. Amid the fluctuation of the domestic vehicle market, it sold 6.489 million complete vehicles for the whole year, increasing 9.9 percent year on year. More than 320,000 passenger vehicles with proprietary brand were sold, surging 89 percent year on year. 46,000 Maxus, a light commercial vehicle with proprietary brand, were sold, hiking 32 percent year on year. Meanwhile, driven by e550 and e950, over 25,000 new-energy vehicles were sold last year, jumping 85 percent year on year.
BAIC Motor recorded even more outstanding performance last year. Its annual report shows that the company recorded a net profit of 6.367 billion yuan, hiking 91.83 percent year on year. 457,000 complete vehicles with proprietary brand were sold in 2016, jumping 35.6 percent year on year. For new-energy products, it maintained its leading position in the pure electric new-energy vehicle market. 48,000 new-energy vehicles were sold for the whole year, surging 138.7 percent year on year.
Based on the sales, the new-energy vehicles of Guangzhou Automobile maintained the strongest growth trend as a result of the low base for last year. Its annual report shows that Guangzhou Automobile sold a total of 3,665 new-energy passenger vehicles in 2016, representing an increase of 156.29 percent year on year. It achieved a net profit of 6.288 billion yuan in 2016, increasing 48.57 percent year on year.
Guangzhou Automobile attributed the growth to the surging growth of its proprietary brand, further enhanced R&D strength, the acceleration in the introduction of new products and the outstanding performance of star types. The output and sales of passenger vehicles of Guangzhou Automobile maintained high growth in 2016, representing an increase of 101.84 percent and 90.66 percent year on year. Trumpchi GS4 continued selling well and GS8 has become another star product with proprietary brand.
Boosted by the booming sales, Guangzhou Automobile decided to expand the capacity for new-energy vehicles. GAC Motor, a subsidiary of Guangzhou Automobile, decided to implement a capacity expansion for new-energy vehicles with 200,000 vehicles for each year in end-March with a total investment of 4.694 billion yuan. GAC Motor is principally engaged in the production and sale of Trumpchi vehicles.
Despite the slower growth in the industry due to the investigation on the deception for subsidies and the policy changes, major vehicles manufacturers still increased their investment in new-energy vehicles. As a leader in the industry, BYD Company Limited (01211.HK; 002594.SZ) sold 96,000 new-energy vehicles in 2016, hiking 69.85 percent year on year and ranking first in the world again. For the new energy vehicle market in 2017, the company indicated that it will further increase the input and expand capacities to speed up in the R&D and introduction of new types.
Huge cash bonus
Vehicles with outstanding performance proposed huge cash bonus. SAIC Motor proposes huge cash bonus every year. Based on its annual report, SAIC Motor proposes a cash dividend of 16.50 yuan (taxes inclusive) for every 10 shares based on the total share capital with a total amount of 19.278 billion yuan, accounting for over 60 percent of its net profit. It has distributed a total cash bonus of 48.606 billion yuan in recent years.
Zhengzhou Yutong Bus Co., Ltd. (600066.SH) is also quite generous. It achieved a net profit of 4.044 billion yuan in 2016, increasing 14.38 percent year on year. The company proposes to distribute 10 yuan (taxes inclusive) for every 10 shares based on the total share capital with a total amount of 2.214 billion yuan, accounting for over 50 percent of its net profit. It distributed 15 yuan (taxes inclusive) for every 10 shares in 2015 with a total amount of 3.321 billion yuan, accounting for over 90 percent of its net profit.
Yutong Bus indicated that the company has achieved the operation target for 2016 and has made breakthroughs in pure electric vehicles. A total of 26,856 new-energy passenger vehicles were sold, increasing 31.36 percent year on year.
Some vehicle manufacturers also proposed huge bonus despite the decrease in profit. Jiangling Motors Corporation, Ltd. (000550.SZ) sold 281,019 complete vehicles in 2016, increasing 6.95 percent year on year. It recorded a net profit of 1.318 billion yuan, decreasing 40.68 percent year on year. Despite the year-on-year decrease in net profit, the company proposes to distribute 6.10 yuan (taxes inclusive) for every 10 shares to all shareholders with a total amount of 527 million yuan. The company proposed 9.7 yuan (taxes inclusive) and 10.3 yuan (taxes inclusive) for every 10 shares in 2014 and 2015 with a total amount of 837 million yuan and 889 million yuan.
Translated by Star Zhang
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