On the first trading day of July, the "good start", A-shares rebounded, and they wanted to hit 3,000 points.
However, the market is still shrinking. Behind this is on the one hand investors pessimistic about the drivers of domestic economic growth, on the other hand is also the depletion of funds, except for the "national team" and a few institutions, retail investors, there is basically no high-quality incremental funds to enter, so that the market has fallen into a kind of "negative feedback" of funds and emotions. However, when the whole industry is good, it is often difficult to see which sector is bright, but if you can still "shine" in the "dark" sectors and individual stocks, there is a high probability that it is still worth paying attention to.
Here is a screenshot of the rise and fall of 15 industries before and after each of the 124 industry classifications in the second level of Shenwan in June, the real estate service sector fell by 23.29% in the past month, and there were 17 industries that fell by more than 15%, while only 9 industries rose in the past month. Looking carefully, three of the top 4 in the 9 industries are related to the chip semiconductor sector, which is mainly driven by the recent "Kete Valuation" strongly promoted by the market. In addition, the passenger car sector ranked second, with an increase in the past month.
It is understandable that even if the domestic market is still controversial about the development speed of the new energy vehicle industry, technical barriers or future overcapacity, it cannot be denied that the rapid development of the domestic new energy vehicle industry chain has contributed to the contribution of the domestic manufacturing industry in recent years. While driving the whole ecological chain, it is also driving the troika of "investment, consumption and export" in the mainland. For a time, a number of new energy vehicle companies have emerged in China. As a result, the A-share related passenger car field has also received widespread attention from market funds with the growth of production and sales. However, the heat of the capital market and public opinion has been concentrated in domestic new energy passenger car brands, and in addition to passenger cars, there is a similar segment that is easy to be ignored by the market.
In fact, there are already companies in domestic commercial vehicles that have quietly risen, and their stock prices have doubled.
In the commercial vehicle sector, Yutong Bus has quietly risen
For example, in 2023, the revenue will stop falling and rebound, and the domestic bus company Yutong Bus (600066. SH）。 The market is expected of the performance of Yutong bus, the company's share price will gradually rebound from the beginning of 2023, double in half a year, start a new upward trend around January at the beginning of this year, and rise by more than 100% again in more than 4 months. The logic of strong support for the rise and pullback lies more in the market's optimistic expectation of the commercial vehicle market space and the company's future performance increment.
From the perspective of the industry, there are two core growth logics, one is the increase in the penetration rate of new energy commercial vehicles under the "dual carbon" strategy, and the data shows that the market penetration rate of new energy passenger vehicles in mainland China has reached 34.7% in 2023, while the overall penetration rate of commercial vehicles is only 11.1%. It can be seen that after the new energy of commercial vehicles, the growth space is larger, and from the perspective of utility, the development of new energy commercial vehicles for environmental improvement is more cost-effective, after all, in addition to medium and long-distance buses, the new energy of short-distance buses in the city is an important trend;
The other is the gradual recovery of the bus industry, according to the data of China Bus Statistical Information Network, in 2023, the sales volume of 7 meters and above buses in the mainland bus industry will be 87,926, an increase of 4.42% compared with 2022. As a leading enterprise in the field of domestic commercial buses, Yutong Bus's performance growth in 2023 can not stop there.
According to the annual report, Yutong's revenue rebounded to 27.04 billion last year, an increase of 24.05%, nearly 20 percentage points higher than the industry growth. Moreover, the company's profitability is relatively bright, with the net profit attributable to the parent company reaching 1.8 billion, an increase of 139.36%; deducted non-net profit of 1.4 billion, an increase of 466.72%; Net operating cash flow continued to be positive, increasing by 44.97%. It can be seen that behind the performance growth of Yutong bus, the driving factors of the domestic bus industry are small.
In the annual report, the company explained that the core of the performance drive lies in the overseas market: "Benefiting from the recovery of overseas bus market demand and the growth of overseas new energy bus demand, the company's export business continued to make efforts, and export sales achieved substantial growth; At the same time, the proportion of the company's export business increased, the sales structure improved, and the performance contribution increased. "From the perspective of the company's regional sales, the overseas revenue brought by the export of passenger cars in 2023 will be as high as 10.406 billion, a year-on-year increase of more than 85%, and the proportion of revenue has reached 38.48%, nearly forty percent;
On the other hand, domestic sales are still not fully recovered, and are still in a state of decline (-1.71%). Looking back on the development of Yutong Bus in the past ten years, from 2014 to 2019, the company's business focus has always been in China, and the income of overseas export business has stabilized at about 4 billion, while the domestic business has reached nearly 30 billion revenue in 2016, although it has continued to decline in the next three years, it is still around 25 billion. After 2020, on the one hand, the epidemic affected the start of construction, and on the other hand, the domestic tourism industry was seriously hindered, resulting in a decline in demand for buses, which has declined for four consecutive years from 2020 to 2023, and 13.697 billion is the lowest point of domestic business income in the past ten years.
Why has domestic business repeatedly shrunk?
Looking back at the core business of Yutong Bus. The company is a listed company deeply engaged in commercial buses, the industrial chain from product development, manufacturing and sales to the full coverage of the automobile manufacturing enterprises, the core products can meet the market demand of 5-18 meters of different specifications of buses. The company's complete product chain of more than 100 series is mainly used for highway passenger transport, tourist passenger transport, bus passenger transport, group commuting, school buses, scenic buses, airport shuttle buses, autonomous microcirculation vehicles, etc. In terms of use, the demand for long-distance passenger transport and bus short-distance passenger transport in highways and tourism has a greater impact on the company's bus sales.
Broadly speaking, the bus industry is a weak cyclical industry, and the total amount of the industry not only depends on the total number of residents and travel structure, but also affects by national and local policies. Although the overall domestic economy will gradually recover in 2023, due to the impact of weakness in the early stage, the internal demand is still insufficient, as mentioned earlier, the domestic economy mainly relies on new energy to drive, and according to the data of China Bus Statistical Information Network, the total demand of the large and medium-sized bus industry in mainland China last year fell by 10.88% year-on-year, especially the demand for buses and school buses declined significantly;
The core reason behind this is that in the years before 2023, short-distance buses have basically realized new energy, and due to the pressure on local finances in the past two years, the demand for replacement procurement has gradually declined. Judging from the data in the above table, it is true that the sales of short-distance commercial buses such as buses and school buses (the decline in the birth rate in the past two years has led to a slight decline in demand) have declined significantly, while the seat buses have increased by 88.64% year-on-year, indicating that the demand for domestic tourism and group commuting (including overseas) has picked up. Whether growth can be restored in the future depends on factors such as urbanization development, public transport urban construction, and the integrated development of rural passengers, goods and mail.
Why is overseas business bringing such an increase?
In fact, in 2022, Yutong Bus's overseas business will begin to take off. The reason disclosed in the company's 2022 annual report is that with the release of rigid demand in some countries or regions and the holding of large-scale events, industry demand has recovered. The world economy has stabilized and rebounded, and the pent-up market demand for passenger transport, tourism, and groups in the early stage will be gradually released. Especially during the Qatar World Cup, Yutong provided 888 pure electric buses for the World Cup, as a transportation guarantee service for the event, and established a good international image and brand reputation, although the company did not disclose the sales situation in various regions last year, superimposed on the "Belt and Road" policy, the Middle East will probably account for a high proportion.
The country is weak, and domestic buses going to sea have become the "antidote". In 2023, the number of overseas passenger car sales will increase by 48.63% year-on-year. The reason given by the company is: "The backlog of market demand in the early stage of the overseas market has been released in large quantities, and the domestic bus industry, especially the new energy bus, has been recognized by the overseas market by virtue of its continuous improvement of technical level and supply chain advantages." ”
Judging from the research report of the brokerage, with the recovery of overseas demand for commercial buses, the market has strong expectations for domestic buses to go overseas and the penetration rate of new energy, and the overseas market does provide strong performance expectations. Judging from the overseas sales of Yutong buses, the gross profit margin of overseas sales of buses is 8.7% higher than that of domestic sales, and the gross profit margin of overseas sales has increased by 1.63% year-on-year in 2022, with both volume and price rising.
However, I have to say that a not very optimistic data, according to the disclosure of Yutong Bus's 2023 annual report, the company's production and sales of new energy vehicles have declined significantly. Because the market expects that the penetration rate of new energy buses will increase at home and abroad, and the company's new energy production and sales will decline, in fact, it has brought great uncertainty to the sustainability of this performance.
2023 has passed, and the new energy bus market has fallen to a historical low, and the sales of new energy buses last year were only a quarter of the peak sales in 2016. Whether the domestic new energy bus market can bottom out and rebound is the core driving force for the continuous growth of Yutong bus' performance.
Fortunately, the market has shown signs of recovery this year. According to the data, in March 2024, a total of 2,571 large and medium-sized new energy buses above 7 meters were sold in China, an increase of 62.72% from the previous month (1,580), and although the year-on-year (2,933) decreased by 12.34%, the month-on-month increase was very obvious and can be expected. If the internal and external dual circulation, Yutong, as the first commercial bus company in the domestic market share, will undoubtedly obtain stronger performance expectations.
In summary, the overall market and performance expectations of Yutong Bus are still very clear. On the one hand, the performance increment comes from the overseas market, and the next short-term depends on the recovery of the domestic tourism industry, the demand for medium and large buses is repaired, and the domestic market is still the basic plate of Yutong buses; On the other hand, the performance increment is more medium and long-term, that is, the new energy and renewal of domestic and overseas commercial buses, which is an important expectation that can drive Yutong's performance to a higher level.