Price hike does not affect China’s new energy vehicle penetration rate approaching a new high
Even if upstream raw materials increase several times a year and downstream car companies raise prices twice within a year, the negative impact on the retail market of new energy vehicles is still limited. , BYD sold over 100,000 units.
On May 10, the latest data released by the China Passenger Transport Association verified this trend. In April, the national retail sales of new energy vehicles exceeded 280,000 units, a year-on-year increase of 78% and a month-on-month decrease of 36.5%. Although the growth rate is much weaker than that in March, compared with the -35% growth rate of auto retail sales and the -38.5% growth rate of SUVs, which used to be the most driving industry growth rate, the new energy vehicle industry is very prosperous.
According to the penetration rate of new energy vehicle sales / narrow passenger vehicle sales, 27 out of every 100 vehicles sold in April were new energy vehicles (27.06%), the second highest penetration rate in history, second only to 28.16% in March.
“China’s new energy vehicles will continue to be in short supply this year, and the two rounds of price adjustments in the first quarter of this year will have limited impact on China’s new energy vehicle sales throughout the year,” said Shen Dai, a technology analyst at SPDB International, in the report. .
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The biggest variable at the moment is still the production and delivery impact of special cases. On May 10, Li Auto’s management said at the first-quarter results meeting that the company’s Changzhou plant has been affected by the surrounding epidemic since late March, and “it is impossible for us to maintain the previous production rhythm.” Previously, Ideal had apologized to consumers for the delay in the delivery of new cars. They said that supply chain companies in Jiangsu, Zhejiang and Shanghai were unable to supply, which affected the company’s production capacity in April.
According to company data, Li Auto delivered 11,034 vehicles in March, a decrease of 10% from January (sales in February were not compared due to the disruption of the Spring Festival). In April, deliveries plummeted to 4,167 units, a month-on-month decrease of over 60% and a year-on-year decrease of more than 1,000 units. Under the circumstance of rising raw material prices, Li Auto’s first-quarter auto sales revenue was 9.3 billion yuan, gross profit margin was 22.44%, and profit margin increased by 0.1 percentage points from the previous quarter.
An investor in the secondary market who bought Ideal shares told “Waidian Finance and Economics” that “electric vehicles have good resilience”, and learned from the dealers that the demand in the whole industry is very strong, and the order volume is not affected by the environment. As for the ideal car, he feels that the cash flow is healthy and the cash reserves are sufficient, which is more favorable for resisting the uncertainty of the epidemic.
Li Auto said that they are expanding the number of certified suppliers to cope with the short-term impact of the epidemic, and will not adjust their mid- and long-term supply chain strategy for the time being. In their view, the shutdown of production under the epidemic is a single event, and it will not “dramatically” adjust the supply chain strategy.
Similar trends are seen in major global auto retail markets. The nine European countries sold about 676,000 vehicles in April, a year-on-year decrease of 22%, but the sales of electric vehicles in the same period were about 127,000, a decrease of only 6% and the penetration rate remained above 20%. In early May, Volkswagen said it had a backlog of 300,000 electric vehicle orders in the Western European market. Previously, Volkswagen, BMW, Mercedes-Benz, etc. had stopped production for at least two weeks due to the situation in Russia and Ukraine.
In April, the United States sold about 1.256 million vehicles, a year-on-year decrease of 17%, while the sales of new energy vehicles in the same period was 86,000, doubling year-on-year, and the penetration rate reached 6.9%. More than half of all new energy vehicles sold in the United States are Tesla, after Musk said the company’s production and deliveries were being affected by the outbreak. According to the latest data, Tesla China delivered only 1,512 vehicles (10,757 produced) in April, with zero exports.
Affected by the epidemic, Tesla’s Shanghai plant was suspended from March 28 to April 18. On April 17 and April 18, 8,000 employees returned to the factory for closed-loop production. The production loss of Tesla’s Shanghai plant is about 2,000 vehicles per day. According to the 2-day shutdown on March 16 and 17, and the 22-day shutdown from March 28 to April 18, the production loss reached about 48,000 units.
On May 10, market sources said that Tesla’s Shanghai plant would be shut down due to a shortage of parts supply. Tesla officials said that there was no relevant information to disclose.
China’s passenger aircraft take-offs and landings improved month-on-month, approximately equal to the level in 2004
- According to data from Feichangzhun, from May 2 to May 8, airports in mainland China completed 49,947 passenger flights, slightly less than the weekly average of 50,988 in 2004.
- This performance has improved compared to previous weeks. From April 11 to April 17, mainland passenger flights took off and landed 35,522 times, “approaching” the weekly average of 33,600 in 2000.
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- Currently, there are 25,000 domestic weekly flights, a decrease of 74% from the same period in 2021 and a decrease of 73% from the same period in 2019. Weekly passenger traffic is 80% lower than the same period in 2021 and 2019.
- According to the statistics of Lu Ting, chief economist of Nomura Securities China, in early May, 330 million people in China received different levels of epidemic prevention management. These regions will account for nearly 30% of the country’s GDP in 2021, with a scale of more than 35 trillion yuan, including the Yangtze River Delta. China’s most dynamic cities (circles), such as Guangzhou and Beijing, are regional and even national economic nodes.
- In Jilin Province, where the number of new coronavirus infections in a single day dropped to less than 50, the search popularity of routes gradually picked up. For example, the popularity of flights from Changchun to Guiyang was 112.9, ranking third. Chongqing, Shenzhen, Xi’an, Guiyang and other cities with relatively well-controlled epidemics occupy the top of the list.
Geely overseas “philatelic”, intends to buy 30% stake in Renault Korea
- Geely Automobile announced today that it will acquire about 34.02% of Renault South Korea’s shares. The initial goal is to produce traditional fuel vehicles (ICE) and hybrid vehicles, mainly for high-growth markets such as South Korea; there will be more cooperation in the future.
- Geely has always been active in foreign investment and cooperation. Some analysts believe that, as a private car company, Geely is more likely to learn technology through cooperation with foreign capital.
- For example, in 2010, it acquired Volvo with US$1.8 billion, obtained technology transfer, established a joint R&D center, and launched the joint venture brand Lynk & Co.
- In 2018, it raised US$9 billion to acquire a 9.69% stake in Daimler, the parent company of Mercedes-Benz. The two parties announced to cooperate in the development of hybrid internal combustion engines for use in European and Chinese models; Mercedes-Benz may also use engines made by Geely.
- Geely also exports technology to the outside world. In 2017, the acquisition of Proton Motors in Malaysia mentioned the delivery of advanced products, technologies, equipment, standards and talents to Malaysia. The acquisition of Renault Korea this time also mentioned the export of car-making platforms and hybrid technologies.
- Geely Automobile sold 1.328 million vehicles last year (Geely, Geometry, Lynk & Co, and Krypton), of which 115,000 were sold overseas;
- The annual revenue is about 102 billion yuan, and the net profit after deduction is 5.25 billion yuan;
- As of the end of last year, it had about 28 billion yuan in cash on its account;
- The annual R&D expenditure was 5.5 billion yuan, accounting for 6.6% from 1.6% in 2017; the technology licensing income was 1.275 billion yuan.
- Geely announced April performance data today, with a total sales of 72,153 vehicles, a year-on-year decrease of about 28%, mainly due to the impact of the epidemic and the supply chain.
Stricter compliance, Goldman Sachs, Bank of America and other major Wall Street investment banks plan to withdraw from the SPAC business
- According to media reports, Goldman Sachs has informed clients that it plans to exit the SPAC ( special purpose acquisition company ) business.
- According to the rules, the first stage of a SPAC is to raise funds through listing, and the second stage is to search for acquisition targets, complete the merger, and then change the name to go public.
- Not only will Goldman suspend all new SPAC listings, but it will also exit Phase 2 — unless the combined operations of individual SPACs are “very close to completion,” the report said.
- This is inconsistent with Goldman Sachs’ usual ” client first ” standard. With Goldman’s abrupt exit, clients (SPAC sponsors) will have to find new underwriters, and those in the second phase who need to close the M&A within a deadline will be particularly passive.
- The report said that the retreat was mainly due to concerns about liability risks. The U.S. Securities and Exchange Commission (SEC) issued new guidelines at the end of March this year, and in addition to requiring more disclosures from SPAC sponsors, underwriters are also taking more responsibility.
- Previously, due to lax rules, SPAC sponsors tended to withhold information and exaggerate prospects to attract investors, resulting in a significant increase in related lawsuits .
- The SPAC market is also cooling rapidly. From January to April this year, only 58 SPACs were listed in the United States, with a fundraising scale of US$10.29 billion; less than 1/10 of last year’s total.
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- Goldman Sachs was the second-largest Wall Street investment bank in underwriting SPACs last year. Together with Bank of America and Citigroup, they underwritten 27% of SPAC transactions worth over $47 billion. At a 5% transaction fee, the revenue is about $2.35 billion.
- Goldman Sachs had a net income of US$59.34 billion and a net profit of US$21.64 billion last year, of which the investment banking business contributed 1/4 of the net income. Bank of America is also said to be curtailing related cooperation, and may withdraw further if the policy changes.
Apple restructures service business, streaming media, advertising are new growth priorities
- According to media reports, Apple is restructuring its services business to further improve profitability. The changes include changes in the responsibilities of several executives and identify advertising and streaming as two areas of growth.
- Services and hardware are two of Apple’s businesses. From January to March this year, Apple’s service revenue was $19.8 billion, mainly from advertising and subscription services (Apple TV+, Apple Music, iCloud, etc.); hardware revenue was $77.5 billion, about 65% from iPhone sales.
- Although service revenue accounts for only 20%, it is generally regarded as the key to future performance growth. On the one hand, its gross profit margin is as high as 72.6%. In addition, mobile phones and tablets are mature markets with limited growth rates.
- According to reports, in this adjustment, Apple’s vice president of services Peter Stern will no longer be in charge of advertising, but will focus more on services such as video and iCloud.
- Apple’s advertising business is “big enough to live on its own,” the people said.
- As for streaming Apple TV+, reports say Apple may make sports a priority. In addition to the MLB (Major League Baseball) exclusive live broadcast agreement reached at the beginning of the year, it is said that it is also seeking cooperation with the NFL (Major Football League) and the NBA.
- Apple TV+ was launched in September 2020; as of February this year, its global market share was about 5.6%, behind Netflix (about 45%) and Disney+ (17.6%).
Sinovac has an annual profit of nearly 100 billion yuan, but was accused of layoffs and suspension of year-end bonuses
- A few days ago, some netizens left a message on the Beijing public legal service website, saying that Kexing Zhongwei, a subsidiary of Kexing Biological Holdings, “maliciously withheld year-end awards, reduced dismissal compensation, and illegally laid off staff.”
- Kexing Bio’s revenue in 2021 will reach US$19.375 billion (128 billion yuan), with a net profit of US$14.458 billion (about 95.541 billion yuan), and the net profit attributable to the parent company is about 53.9 billion yuan.
- In a horizontal comparison, Huawei’s net profit last year was 113.7 billion yuan, PetroChina’s was 92.71 billion yuan, Sinopec’s was 71.208 billion yuan, and Baidu’s was 18.8 billion yuan. Kexing Bio has made money faster than PetroChina and Sinopec, and can compete with Huawei and five times more than Baidu.
- Sinovac’s revenue mainly comes from the sales of the CoronaVac vaccine, which was developed by Sinovac. According to the financial report, as of the end of 2021, Sinovac’s vaccines have been approved for use in 56 countries and regions, and more than 2.5 billion doses of vaccines have been provided worldwide, making it the most used new crown vaccine in the world. At present, the company’s annual production capacity of the new crown vaccine has reached 2 billion doses.
- Kexing’s R&D expenses were US$155 million (1.024 billion yuan) last year, accounting for less than 1% of its revenue. These R&D investments include the sum of vaccines such as sIPV (Sabin strain inactivated polio vaccine) and CoronaVac.
CHART OF THE DAY
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OTHER NEWS
China Eastern plans to raise RMB 15 billion to buy aircraft and replenish working capital. The shopping cart includes 4 COMAC C919s.
China Eastern Airlines announced that it plans to raise no more than 15 billion yuan through non-public offering. The 10.5 billion yuan of the raised funds will be used for the introduction of 38 aircraft, including 4 C919 large aircraft from COMAC, 24 ARJ21-700 short and medium-range passenger aircraft, and the remaining 10 aircraft are from Boeing and Airbus. The remaining 4.5 billion yuan is used to supplement working capital. China Eastern Airlines Group intends to subscribe for this non-public offering of shares in cash with an amount of not less than 5 billion yuan. By the end of 2021, China Eastern had operated a total of 758 passenger aircraft, and introduced 33 new aircraft that year.
Raw materials, labor and logistics prices have risen, and it is reported that TSMC will increase prices by 6%.
According to media reports, multiple people familiar with the matter said that TSMC has informed customers that the price of chip foundry will increase by 6% from January next year, including mature and advanced processes. This is TSMC’s second price hike in nearly a year, citing inflation, rising prices for parts and materials, and huge costs for continued expansion. This TSMC plans to invest 100 billion US dollars in three years to increase production capacity, and this year alone plans to invest as much as 40 billion to 44 billion US dollars. TSMC declined to respond to news of the price increase.
Some production lines of BYD’s Changsha plant were shut down for rectification, and the investigation team entered the plant to sample gas.
According to the Securities Times, according to cross-validation of multiple sources, the Changsha BYD factory has not been completely shut down, only some production lines have been shut down for rectification, and other production lines are operating normally. In the past two days, BYD has not issued an announcement on the suspension of work. The investigation team has sampled the gas in the factory area on the afternoon of the 8th, and has also sampled and tested the gas in the BYD Xingsha production base (another production base in Changsha).
Tesla said that it has not yet received a notice of the shutdown of the Shanghai plant, but there may be some impact on logistics.
According to media reports, Tesla’s Shanghai plant stopped production on Monday due to supply chain problems, and planned to produce less than 200 vehicles on Tuesday. Tesla responded that it has not yet received a notice about the suspension of production at the Shanghai factory. The factory has been in production since the resumption of work on April 19, but there may be some impact on logistics. It was previously reported that the Shanghai plant will produce about 1,200 vehicles per day after the resumption of work, and plans to return to the pre-epidemic level of 2,600 vehicles per day on the 16th of this month.
Some Shanghai-based Apple makers saw their revenue drop by more than 40% in April.
Quanta recently disclosed that its April revenue fell by nearly 40% month-on-month and 21.3% year-on-year; its Shanghai factory is the most important MacBook production base in the world. iPad maker Compal Electronics, which has a factory in Kunshan, saw April revenue drop 50% month-on-month and 40% year-on-year. According to statistics, more than half of Apple’s 200 major suppliers have factories in Shanghai and the surrounding Jiangsu province.
Sinopharm Zhongsheng Beijing’s new Omicron inactivated vaccine trial will be administered to vaccinated populations.
Sinopharm China Bio-Beijing Institute of Biological Products conducts “sequential clinical trials” of inactivated vaccines against Omicron strains in Hunan. The test subjects are people aged 18 and over who have received 2 or 3 doses of the new crown vaccine. The test will test the performance of the vaccine at different intervals and in different dose sequences. Earlier this month, the vaccine began trials in people who had not been vaccinated against the new crown. The vaccine was approved for clinical research at the end of last month.
Luckin said that it has no plans to list in Hong Kong and will continue to work on the U.S. capital market.
In response to the recent rumors of listing in Hong Kong, Luckin responded that it will continue to work on the U.S. capital market and is not seeking a listing in Hong Kong at present, but will “continue to monitor the development of the capital market and evaluate all ways to create value for stakeholders.” Luckin announced plans to re-list on U.S. exchanges in January this year; in April, it announced the completion of financial debt restructuring and the end of bankruptcy protection proceedings, marking the return of the company’s governance to normal.
Three Squirrels suspend offline store expansion.
The three squirrels said on the investor interaction platform that there were problems with the large-scale and extensive development model of stores in the past. For this reason, the company has fully suspended store expansion, and vigorously shut down stores that do not meet long-term positioning and poor performance. The next step We will focus on improving the profitability of a single store and focus on the high-quality development of high-quality stores. The three squirrel offline stores will account for 33.7% of the total revenue in 2021, and more than 300 stores will be closed that year, which is similar to the number of new stores. In the first quarter of this year, 400 of its 1,000 or so stores were temporarily closed due to the epidemic and other reasons.
Sunac China is in talks to sell a 51% stake in the star project Shenzhen Ice and Snow Cultural Tourism City.
According to media reports, Sunac China is negotiating to sell a 51% stake in Shenzhen Ice and Snow Cultural Tourism City, and Shenzhen Metro Group is one of the intended buyers. In November 2020, Sunac China and Huafa Co., Ltd. jointly won the land plot of the project, and the equity distribution of the project between the two parties is 51% and 49%. The Shenzhen Ice and Snow Cultural Tourism City project is expected to be completed in 2026. It will be the world’s largest “indoor snow world” by then. It will become a star project of Sunac’s indoor snow field just like Guangzhou Sunac, which is an hour or two away by car. However, Sunac has been short of funds this year, and has raised funds through the disposal of assets of about 25.72 billion yuan and two equity financings.
The 100-yen sushi restaurant in Japan that has been maintained for nearly 40 years cannot withstand the rising cost, and the price has risen.
Sushiro, a well-known conveyor belt sushi chain in Japan, has announced that it has abandoned its selling point since 1984 – a plate of sushi for as little as 100 yen (about 5.17 yuan). The price of these sushi is currently adjusted to 120-150 yen. The company claims that 70% of its ingredients are imported, and the recent depreciation of the yen against the dollar to a 20-year low is unbearable for the company. Rising fish prices and rising global freight rates also added to their cost pressures.
The related revenue of COTY, which represents luxury beauty products such as Gucci and Burberry, increased by 21% in the first quarter.
COTY, one of the world’s largest beauty companies, owns the beauty and fragrance businesses of many luxury brands including Gucci, Burberry, Hugo Boss and more. In the first three months of this year, COTY’s revenue from these luxury beauty and fragrance sales rose 21% year-on-year. Earnings per share also tripled because of the price increase. Among them are inflation factors, but also strong demand for high-end fragrances and skin care products in the United States and Europe. The company is optimistic about its full-year forecast, raising its earnings forecast for this year.
The sales of movie tickets in the first quarter of the US AMC theater chain increased by more than 5 times year-on-year.
AMC’s first-quarter financial numbers beat market expectations as Americans walked back to movie theaters. While still in the red, the loss was 52 cents per share, better than analysts’ forecast of 62 cents. Movie ticket sales also increased by more than 5 times compared to the same period last year. But its CEO warned last month that studios are just beginning to return to their pre-pandemic pace to release blockbusters and that U.S. box office receipts may take until 2025 to reach pre-coronavirus levels.
Demand is strong, and new crown mRNA vaccine maker BioNTech tripled its sales and profits in the first quarter.
In the three months ended March 31, German biopharmaceutical company BioNTech posted revenue of 6.4 billion euros, more than triple the year-ago period and above analysts’ expectations. Net profit was 3.7 billion euros, compared with 1.1 billion euros in the same period last year. The increase in revenue was due to the large number of deliveries of the Covid-19 vaccine. In the first quarter, BioNTech and Pfizer have invoiced 750 million doses of the vaccine. From January to April this year, the two companies have signed orders for 2.4 billion doses of the vaccine.
In response to economic market changes, Uber has slowed hiring.
Uber CEO told employees that due to changes in the economic market, the company will cut spending on marketing and incentives, strictly control costs, and carefully recruit employees. He said Uber is now more focused on free cash flow than nominal profit. In the first quarter of this year, Uber’s revenue rose 136% year-on-year to $6.854 billion, but losses also widened to $5.9 billion, mainly due to investment losses in Didi, Grab and Aurora.
Research says that the number of Android apps dropped by one-third after GDPR implementation in Europe.
A study published in the U.S. National Bureau of Economic Research found that in the quarters following the European General Data Protection Regulation (GDPR) implementation in 2018, the number of apps on the Google Play Store fell by a third, and fewer new apps were launched 47%. The authors would like to illustrate that GDPR’s strict privacy policies can hurt app innovation. Opponents argue that this causation does not hold, as Europe also had data protection laws before the GDPR, and these disappearing apps accounted for only 3% of app usage, likely the result of natural market phasing out. Skeptics say it would be more convincing to compare European and US data over the same period.
Some NFT enthusiasts will be able to share NFTs for free on Instagram.
Zuckerberg said digital collectibles will be tested on Instagram this week. The pilot is primarily open to a small group of NFT enthusiasts and collectors in the US, allowing them to share their creation or purchase of NFTs on Instagram without incurring any associated fees. At the same time, the company also said that it will use its Spark AR software to develop a 3D AR version of NFT that is compatible with Instagram.
Text | Gong Fangyi Lin Guangying Intern Wang Yuqing Intern Yi Silin
Editor | Gong Fangyi
The title image comes from the movie “Back to the Future” (1985)
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