Net profit exceeded 4.5 billion yuan, Great Wall Motors grew against the wind in 2019

Even in such difficult times, there are still voices of hope coming from the distance.

On February 21, 2020, Great Wall Motors announced its 2019 annual performance report. In 2019, Great Wall Motor achieved total operating income of 96.455 billion yuan and net profit of 4.526 billion yuan. In the second half of 2019, it achieved net profit of 2.975 billion yuan, a year-on-year increase of 94.3%.

Breaking it down, the net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was 3.982 billion yuan, an increase of 2.4% compared to 2018. At the same time, starting from the second quarter of 2019, Great Wall Motor's net profit continued to improve month-on-month. In the third quarter, net profit increased by 8.47 to 1.4 billion yuan, and in the fourth quarter, net profit increased by 1.25 to 1.575 billion yuan. Overall, both revenue and net profit increased in the second half of the year, with total operating income increasing by 9.0% year-on-year and 33.1% month-on-month, and net profit increasing by 94.3% year-on-year and 91.8% month-on-month.

This can be said to be a glimmer of light in the cold winter, because all Chinese automobile companies have experienced too many challenges in 2019. In 2018, the passenger car market fell by 3% year-on-year. In 2019, the decline in retail sales continued to expand, with a year-on-year decline of 8%. Looking at the quarters of 2019, consumption and taxation became the darkest moment for the auto market in the first half of the year.

The biggest difficulty in the auto market in 2019 is that some regions are unexpectedly rushing to switch to National VI. Under the decline in 2018, many auto companies still have high inventories of National V models, which has led to a decline in the auto market. There is great pressure to switch from stock cars, and in many switching areas, the proportion of National VI vehicles in retail models before the end of June was less than half. Even some models, especially those of self-owned brands, have experienced National VI suspension, and the product sequence has experienced periodic gaps, forcing them to lose market share. This resulted in a tragic year-on-year decline of 30% for self-owned brands in the first half of 2019. The overall market share of self-owned brands also reached a new low in the past five years, with some months falling below 38%.

Under such difficulties, Great Wall Motors still achieved the sales target of 1,060,298 units. Although it is still 9,702 units away from the sales target of 1.07 million units, under such difficult circumstances , no one will accuse Great Wall Motors of not achieving the goal.

From the perspective of model data, the Haval brand has won the annual sales championship in the Chinese SUV market for the 10th consecutive year with an outstanding performance of 769,000 units. The annual sales of the WEY brand have also exceeded 100,000 units again, with cumulative sales exceeding 100,000 units. 320,000 units; the Euler brand sold 39,000 new vehicles; Great Wall Pickup achieved annual sales of 149,000 units, a year-on-year increase of 7.85%. The synergy of the four brands is the key to Great Wall Motors being able to maintain its leading edge in the face of adverse trends. This is good news.

Although there is a lot of good news, we cannot ignore the decline of net profit of 13.54%, the year-on-year decrease of net profit attributable to the company’s shareholders of ?13.73, and the decline of revenue of 2.8%. For these three declines, Great Wall Automobile officials stated that the main reason for the year-on-year decrease in net profit attributable to the company's shareholders in 2019 was that the company continued to strengthen brand building, launched extra-long warranty and other services to enhance brand image and increase brand loyalty; and continued to increase investment in research and development.

Indeed, Great Wall Motors continues to increase marketing in the domestic market to increase its brand premium capabilities. Through marketing activities such as the Must Drive 318 in this life and sponsoring the first sea launch of the CZ-11H carrier rocket, the WEY brand of Great Wall Motors has gained a premium. Capabilities and brand tone continue to improve. Not only that, Great Wall Motors has also invested a lot of money to expand its overseas business.

As of the end of 2019, Great Wall Motors has planned nine production bases and five KD factories in Baoding, Xushui, Tianjin, Yongchuan, Zhangjiagang, Rizhao, Pinghu, Taizhou and Tula, Russia, forming a "9 5” global production system. In terms of channel construction, Great Wall Motors' overseas market covers more than 60 countries and regions including Russia, Australia, South Africa, Chile, Saudi Arabia, and Argentina, and has established a network of more than 500 high-quality dealers.

Overview of the factory in Rayong, Thailand

And it’s not just that. Although the net profit attributable to the company’s shareholders fell by ?13.73 year-on-year, the deductions for the company’s shareholders are non-recurring. The net profit of profit and loss achieved a year-on-year increase of ?2.41, mainly because Great Wall Motors has better optimized the company's operations, which also enables it to have stronger resistance when encountering risks.

For Great Wall Motors, the key to maintaining high-quality development in such a harsh environment in 2019 is its advanced layout and the strong system capabilities it has developed over the years. Such capabilities It will also help Great Wall Motors continue to grow against the wind in 2020.

In 2020, Great Wall Motors will once again focus on overseas markets. After 21 years of exports, Great Wall Motors has decided to enhance its ability to resist risks through true internationalization. This is Wei Jianjun, Chairman of Great Wall Motors Another advance layout. Although the challenge is difficult, for Great Wall Motors, making a little progress every day is not just a slogan, but also a belief that it can persevere to the end.

Text/Lin Jiahao

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This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.