Shulou(Shulou.com)11/24 Report--

A few days ago, BYD released its results for the third quarter of 2022. According to the financial report, BYD's revenue in the third quarter was 117.081 billion yuan, up 115.59 percent from the same period last year; the net profit belonging to shareholders of listed companies was 5.716 billion yuan, up 350.26 percent from the same period last year; and the net profit belonging to shareholders of listed companies after deducting non-recurring gains and losses was 5.335 billion yuan, an increase of 930.48 percent over the same period last year.

In the first three quarters of this year, BYD achieved revenue of 267.688 billion yuan, an increase of 84.37% over the same period last year, and net profit of 9.311 billion yuan, an increase of 281.13% over the same period last year. In addition, the net cash flow generated by BYD's operating activities in the first three quarters was 91.037 billion yuan, an increase of 185.62%.

Such eye-catching results are mainly due to the surge in sales of BYD's new energy vehicles, not only a sharp increase in revenue, but also an all-time high in net profit in the third quarter. But at the same time, a more noteworthy figure is that BYD's bicycle profits also soared in the third quarter.

According to BYD's sales data of 538800 vehicles in the third quarter, combined with a net profit of 5.716 billion yuan minus BYD's 603 million yuan, it is roughly calculated that the bicycle profit is 9000 yuan, which is close to the 10,000 yuan mark. It is understood that BYD's bicycle profit in the first half of last year was only 800 yuan. In the first quarter of this year, the bicycle profit increased to about 2300 yuan, the bicycle profit in the second quarter was about 7300 yuan, and in the third quarter it was close to 10,000 yuan. BYD's bicycle profit increased significantly in just over a year.

High-end + scale effect shows that the scale effect brought by the increase in sales volume of BYD's bicycle profit is the most important factor in the rapid growth of BYD's profit. In terms of sales data, since March this year, BYD's sales have exceeded 100000 for four consecutive months, reaching 160000 in July, 174000 in August and 200000 to 201300 in September. The cumulative sales in the first nine months of this year have exceeded 1 million to 1.1753 million, an increase of 249.6% over the same period last year, and the market share has reached 9.9%.

The large-scale effect has greatly reduced the production cost, which is mainly reflected in three aspects. First of all, with the increase of production, the fixed cost of production will be shared, and the average fixed cost per car will be reduced. Secondly, with the increase of production, the purchase of raw materials will get lower prices, and the cost savings of raw materials will naturally increase the profit level. In addition, with the large-scale production, the technology of the factory will be improved, and the output per unit time will be higher, so that the labor cost and management cost will be reduced, so that the cost apportioned to the bike will be reduced.

In addition, BYD's platform is also beginning to bear fruit. For example, e-platform 3.0 has initially achieved a high degree of platform, and a large number of parts can be shared among the models under this platform. Dolphins, meta-PLUS and seals, which are currently at the top of BYD's sales list, all use this 3.0platform, and more models will be upgraded to this platform next year.

In addition, BYD is almost the only car company that controls the whole industry chain in the new energy vehicle market. The three main parts of electric vehicles: battery, electric control and motor BYD can be completely self-produced, which can resist external risks to a large extent. At the same time, BYD also has a great say in the entire supply chain, coupled with the rising sales this year, it is believed that it can get lower prices than other enterprises in the purchase of raw materials, effectively alleviating the profit pressure brought about by the rising prices of raw materials upstream.

In addition to these factors, BYD is also taking the initiative to seek higher profits this year, launching a number of high-priced models. Previously, the prices of BYD's main selling models were basically maintained in the price range of 10 to 200000 yuan, while the prices of several high-end models launched this year were in the range of 20 to 300000 yuan. for example, the price of this year's newly launched BYD seal is about 210000-280000 yuan; the price range of Hanchuangshi version is 269000-288000 yuan, while the price of Han Qianshan Cui version is 329000 yuan. The prices of Tang EV and DP-p are also basically around 28-330000 yuan, of which the orders for these models are mainly medium-and high-end models, and the higher the price, the higher the profit.

In addition to the BYD brand, the price of the Tengli brand has reached about 400000 yuan. According to sources, BYD will also launch a new high-end brand at the end of this year or early next year, and the starting price of its first off-road model will exceed 1 million yuan.

In overseas markets, BYD is also actively exploring. Data show that BYD sold a total of 7736 new energy passenger cars overseas in September, up 50 per cent from the previous month. In October this year, BYD also launched ATTO 3 (domestic yuan PLUS), Han, Tang, SEAL (domestic seals) and other models in Europe. Among them, the price of ATTO 3 is 38000 euros, about 270000 yuan; the pre-sale price of Hanghe Tang in Europe is 72000 euros, about 520000 yuan. The price of domestic yuan PLUS is about 13 to 160000 yuan, while the price of Han and Tang is about 26-320000 yuan. It can be seen that the price of foreign models is nearly double that of domestic models, and such a high premium can also make BYD make a lot of money.

According to media reports, an affiliated company of BYD will order eight ro-ro ships with a capacity of 7700 cars in order to better export cars overseas, which shows that BYD is determined to expand the market to the global scope and compete with foreign first-tier manufacturers.

There is still a gap in the ability of Tesla to sell 1 car equal to BYD's ability to sell 7 cars at a premium. The rapid growth of BYD's bicycle profits allows us to see the growth of domestic car brands, but the gap with competitors can not be ignored. According to Tesla's financial report for the third quarter of 2022, its net profit was $3.292 billion and car sales were 343800. According to a rough estimate, Tesla's bicycle profit reached $9575, or about 69000 yuan. The gap between the two is obvious.

There are three main reasons why Tesla's bicycle profit is so high. the first is that Tesla's model is relatively single and a large number of parts can be shared. Under the premise of such a large sales volume, its scale effect is more obvious. The second is that Tesla is a famous cost killer in the industry, and he will cut costs in all visible or invisible places. For example, Tesla uses a purely visual autopilot scheme to completely replace all car radars with cameras, while the cost of a camera is only about 100 yuan, while the cost of a millimeter wave radar is about 1500 yuan to 2000 yuan, and that of lidar is about 6000 yuan to 7000 yuan. The third is that Tesla's price is significantly higher than BYD, at the same time, brand recognition is also higher, Tesla's product premium ability is obviously stronger than BYD.

Conclusion High performance-to-price ratio has always been one of the biggest advantages of domestic car brands, so whether the increasing profit of BYD bikes shows that it is not in conscience.

For consumers, the closer the price of the product is to the cost, the higher the ratio of performance to price, but for enterprises, relatively rational profit is the basic premise of enterprise development. If an enterprise wants to develop healthily, it needs sufficient research and development funds. at the same time, a certain product premium is also inevitable for the enterprise to develop to a certain stage.

We hope to see more and more domestic independent brands rise and surpass foreign first-tier brands on the new energy vehicle track, so a good profit margin is of great significance for enterprises.

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