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GAC 2020 Mid-term Results Presentation
August 28 t h , 2020
The presentation has been prepared by Guangzhou Automobile Group Co., Ltd.
(“GAC” or the “Company”) without independent verification. The presentation does
not express or imply any representations or warranties, and shall not be relied upon
for the accuracy, fairness or completeness of the information described or contained
herein. The Group and any of its affiliates, advisors or representatives shall not be
liable for any loss arising in any way from any information described or contained
herein. You are advised against relying upon any prospective remarks contained in
the presentation.
Disclaimer
1
2
3
4
Content
Industry Development Overview
Operat ion Results Overview
Financial Results Overview
Outlook in 2020 H2
Part 1.Industry Development
Overview
Auto industry was hit hard by COVID-19
1,851 1,9312,198
2,349 2,4602,803
2,888 2,8082,577
1,2321,026
3% 4%14% 6.90% 4.70%
13.70%3.00%
-2.80%-8.23%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2019H1 2020H1
PV CV Total Car Sales Growth Rate
Dropped 16.9% YoY
Growth rate of total sales volume
193
31
143
207 219 230
-18.59%
-79.08%
-43.25%
4.49%14.69% 11.87%
Jan Feb Mar Apr May Jun
PV CV Monthly Sales Annual GrowthAutomobile growth rate YoY
uIn 2020H1, the automotive industry was struggling forward. Affected by the COVID-19, the domestic auto market has declined severely. The automobile production and sales was hit hard especially in February and March.
uSince March, driven by the continuous promotion of automobile consumption policies in various regions, auto production and sales have shown a rebounding momentum. The automobile sales data in the second quarter turned positive year-on-year growth, and the market performed better than expected.
uFrom January to June, the cumulative sales of automobiles reached 10.257 million, declined by 16.9% YoY, of which PV sales drop by 22.4% YoY to 7.873 million, while CV sales up by 8.6% YoY to 2.384 million.
Source: CAAC
Sales and Growth Rate of China Auto Market(10,000 units)
Monthly Auto Sales and Growth Rate of China in 2020H1(10,000 units)
Sales in all segments dropped, market share of Japanese and German brands continued to expand
Source: CAAC
2019H1 2020H1
Sedan SUV MPV Minivan
Minivan,-19.8%
Sedan,-26%
SUV,-14.9%
MPV,-45.7%
Minivan,1.9%
MPV,6.6%
SUV,42.5%
Sedan,49%
Minivan,2%
MPV,4.6%
SUV,46.7%
Sedan,46.7%
u In 2020H1, all PV segments have shown a double-digit decline. The YoY decline in the sedan market and the MPV market has significantly expanded (decline by 26% and 45.7%, respectively); the SUV market has a year-on-year decline of 14.9%, but the sales volume surpassed that of sedan for the first time, ranked the top in terms of market share.
uThe sales of Japanese and German brands have grown against the trend, while other brands have declined to varying degrees. The largest decline is in French brands. Proprietary brands, German brands, and Japanese brands continue to rank among the top3 in terms of market share respectively, among them, the market share of proprietary brands decreased by 3.3% YoY. With the continuous sales rise, Japanese brands have reached a market share of 23.7%, further narrowing the gap with German brands.
China's PV Segment Sales in 2020H1(10,000 units)
Market Share of Various Brands in 2020H1
36.3%
25.0%
23.7%
9.3%4.2%
0.3%
Proprietary
German
Japanese
US
South Korean
French
39.3%
23.1%
21.4%
9.6%4.6% 0.7%
2019H1
2020H1
NEVs sales declined severely
Source: CAAC
uIn 2020H1, new energy vehicles(NEVs) dropped 37.4% YoY to 393,000 units. Among them, 352,000 new energy passenger vehicles were sold, declined by 38.5% YoY; 40,000 new energy commercial vehicles were sold, declined by 25.2% YoY;
uFrom the perspective of sales trends, February 2020 was the lowest point in the sales of new energy vehicles in 2020H1, mainly due to the epidemic outbreak. However, the sales of new energy vehicles showed a recovery growth trend since March 2020.
19.8 20.3 14.6 5.4 4.0
57.8
105.3106.0
56.3
35.2
77.6
125.6 120.6
61.7
39.3
2017 2018 2019 2019H1 2020H1
CV PV
Fell by 37.4% YoY
China's NEVs Sales Volume in Recent Years(10,000 units)
Monthly Sales Volume of China's NEVs in 2020H1(10,000 units)
2.9
0.9
3.5 4.3
5.7 7.2 1.2
0.2
1.2
2.0
1.7
2.0
Jan Feb Mar Apr May Jun
PEV HEV
Part 2.
Operation Results Overview
Main operating results of GAC in 2020H1
The "dual battle" of epidemic prevention & control and business development has achieved positive results.The epidemic prevention & control is generally stable. Meanwhile, the work and production resumption have been fully promoted, leading the gradual stabilization and improvement Group’s business.
797,000 vehicles were produced, decreased by 15.9% YoY, and 825,000 vehicles were sold, decreased by 17.5%.
The total automobile production capacity reached 2.733 million units per year, an increase of 120,000 units compared with 2019 Y/E (Phase II of GAC Honda’s Zengcheng Factory)
Domestic PV market share rose 0.62 percentage point to 10.47% compared with 2019.
GAC Motor (incl. NEV) 82 GAC Honda, 77 GAC Toyota, 60 GAC FCA, 32.8
GMMC, 20
CV, 1.5
The sales network covers 31 provinces, c i t i e s , a u t o n o m o u s r e g i o n s a n d municipalities with 2533 4S stores
305,000 and 321,000 motorcycles were produced and sold, dropped by 19.7% and 14.4% respectively
Withstand severe tests and actively carry out business recovery
u Implement epidemic prevention measures. No mass epidemics occurred among the Group's 100,000 employees.
u Mobilize resources to produce over 70 million masks, ensuring that the Group and Guangzhou can survive the most stressful moments.
Make every effort to prevent & control the epidemic and produce masks
Efficiently promote work and production resumption
u Promote the work & production resumption in phases. In early April, more than 5,000 parts, logistics suppliers and dealers of the Group realized operation resumption.
u Strive to ensure the supply of domestic & overseas parts and components. The overall capacity utilization rate of the Group has returned to normal level, with that of GAC Honda and GAC Toyota exceeded 120%.
Actively take measures to carry out business recovery
u Launch new products as planned. Innovate marketing models to boost sales and grab orders.u A series of active recovery measures have been adopted. Since the second quarter, GAC’s main operating
indicators have continued to improve, and the cumulative decrease has continued to narrow.
32739
4095
17644
18321
22537
22349
0 5000 10000 15000 20000 25000 30000 35000
Jan
Feb
Mar
Apr
May
Jun
Ø Focus on the retail sales and launch new products
Ø All-staff sales promotion, sales increase month by month
Manage cadence with flexibility, subsidiaries develop with own highlights
Ø Production and sales increased by 87% YoY
Ø Sales ranks among the tops in the industry
0.83%
87%
4%
331%
23%
MoM(%)
1%
46%
14%
118%
3%
MoM(%)GAC MOTOR’s monthly sales volume in 2020H1 GAC NEVs’ monthly sales volume in 2020H1
2949
1583
3458
3950
4084
4138
0 1000 2000 3000 4000 5000
Jan
Feb
Mar
Apr
May
Jun
37%
88%
119%
337%
15%
MoM(%)GAC Toyota's monthly sales volume in 2020H1
Ø Zengcheng Plant Phase II with capacity expansion of 120,000 units/year is completed and put into production
Ø Production in June hits a record high
Ø Sales rank at the forefront among domestic joint venture auto companies
Ø Market share has increased by 1.11 percentage point
0.47%
92%
29%
800%
6%
MoM(%)GAC Honda's monthly sales volume in 2020H1
Manage cadence with flexibility, subsidiaries develop with own highlights
62485
7484
32735
71730
60724
83293
0 20000 40000 60000 80000 100000
Jan
Feb
Mar
Apr
May
Jun
67620
5500
49480
63607
67500
67181
0 20000 40000 60000 80000
Jan
Feb
Mar
Apr
May
Jun
GAC FCA's monthly sales volume in 2020H1
Ø Reshape the Jeep brandØ Stabilize network, reduce inventory,
and stabilize prices
14%
96%
145%
484%
40%
MoM(%)
10%
85%
30%
1484%
0.4%
MoM(%)
Manage cadence with flexibility, subsidiaries develop with own highlights
2064
316
5007
3509
3523
3158
0 1000 2000 3000 4000 5000 6000
Jan
Feb
Mar
Apr
May
Jun
8279
350
2043
5000
7001
6000
0 2000 4000 6000 8000 10000
Jan
Feb
Mar
Apr
May
Jun
GMMC's monthly sales volume 2020H1
Fix on the market changeand launch innovative products
Actively respond to automobile promotion policies • Respond rapidly to the government's policy of
promoting automobile consumption• Increase subsidies by automakers• Introduce special promotion policies in time and
adopt targeted strategies for key cities• Focus on taking the opportunity of Guangdong
Province’s Auto Incentive Policies to the Countryside
Build a new pattern of digital marketing
• Promote revolution in marketing modes• Vigorously carry out online marketing, "CEO selling",
"Cloud launch", "GAC 628 Super Brand Day"• Create the nationwide marketing mode, for example:
GAC New Energy Aion Partner
GS4 PHEV GS4 COUPE GM8 Master Crider Sport•hybrid
Wildlander C-HR EV HYCAN 007 AION V
Actively seek innovation and change, and take multiple measures to seize market
Continue to strengthen innovation and reinforce self-development foundation
�In 2020H1, there were 927 new patent applications, 46% of which were invention patents, and a total of 6,983 valid patent applications
•Improve BOD operating mechanism of the proprietary brand and promote the coordination of R&D, production and sales•Establish chief director mechanism to smooth the relationship among product planning, development, production and sales
Continuous integration of R&D, production and sales
Continuously consolidate development foundation
发明专利46%
�The self-developed seven-speed wet dual-clutch 7WDCT automatic transmission was awarded the "World Top Ten Transmission" by the Automobile Evaluation Institute
n 927 new patent applications in 2020H1
•Solid advancement of QDR project, promote cultivation and quality improvement of new models• Focus on cost control and improve product cost competitiveness• Highlight star model cultivation and enrich product matrix• Promote the transformation of innovation achievements and accelerate the improvement of patent quantity and quality
•GAC New Energy achieves growth against the trend•Research and development on NEV technology, fuel cell vehicle, graphene battery sample have achieved certain results
Speed up the development of NEV
•Strengthen technological precipitation and continuously update Adigo autonomous driving system• Accelerate the application of autonomous driving technology
The stamina for intelligent development continues to increase
� GAC’s f i rs t hydrogen fue l ce l l passenger car Aion LX Fuel Cell will be operated for demonstration this year
�Independent designed and developed cells, integrated drive IDU, etc. have made phased progress
�The "super fast charging battery" based on the three-dimensional graphene (3DG) material has completed preliminary verification
� Adigo 3.0 system, remote control parking, 5G T-BOX / V-BOX technology have been applied in mass production.
Continue to strengthen innovation and reinforce self-development foundation
Part 3.Financial results
overview
2020H1 Key Financial Indicators
Sales revenue incl.
JVs and Affiliates
(RMB 100 mm)
Revenue
(RMB 100 mm)
Net profit attributed
to the parent
company
(RMB 100 mm)
Operating income
(RMB 100 mm)
Earnings per share
(RMB)
Dividends per
share
(RMB)
1754.98
1597.03
2019H1
2020H1
283.51
256.42
2019H1
2020H1
49.19
23.18
2019H1
2020H1
44.88
22.40
2019H1
2020H1
0.48
0.23
2019H1
2020H1
0.05
0.03
2019H1
2020H1
2020H1 Key Financial Indicators
(RMB 100 mm, except EPS) 2020H1 2019H1 change(%)
Revenue 256.42 283.51 -9.56%
Cost of operation 240.84 255.64 -5.79%
Sales and distribution cost 14.30 17.35 -17.58%
Administrative expenses 14.25 12.98 9.78%
R&D expenses 3.92 7.43 -47.24%
Financial expenses -0.63 0.59 -206.78%
Income from investment 41.15 49.60 -17.04%
Net profit attributed to the parent company 23.18 49.19 -52.88%
Earnings per share (RMB) 0.23 0.48 -52.08%
Summary of Comprehensive Income
(RMB 100mm) 30-6-2020 30-6-2019 change(%)
Total assets 1297.87 1374.10 -5.55%
Total liabilities 468.14 549.55 -14.81%
Total equity 829.73 824.54 0.63%
Summary of Balance Sheet
(RMB 100mm) 2020H1 2019H1 change (%)
Net cash f lows from operat ing act ivi t ies -63.66 -33.66 -89.13%
Net cash f lows from investment act ivi t ies -2.77 -32.94 91.59%
Net cash f low from f inancing act ivi t ies -36.34 -18.40 -97.50%
Net increase in cash and cash equivalents -102.64 -84.89 -20.91%
Ending cash and cash equivalents 203.01 298.78 -32.05%
Summary of Cash Flow
2020H1 Key Financial Indicators
Analysis on Profit Change
49.1910.60
8.793.05 2.23 1.22 14.45
1.3323.18
Net profit of previous period
Gross profitIncome from investment
Sales and distribution cost
Administrative expenses
R&D expensesOther income and Non-operating income
other Net profit of this period
(RMB 100mm)
Part 4.Outlook in 2020H2
Economy and auto industry outlook in 2020H2
The consumer confidence has been restored, with constantly auto sector promoted policies being issued.
Enterprise are driven to conduct reform and innovation by the epidemic.
Increasing risk of global economic
downturn
Global finance, trade, supply chain and tourism have suffered heavy losses.The global economy is experiencing sustained downside risks.
China's economy returned to a positive growth since May, 2020.China's economy will get endogenous improvement on a MoM basis
China's economy resurgence and
endogenous improvement
Opportunities and challenges coexistence in
auto sector
China auto sales are expected to decline by 10% to 20% in 2020.
Key Actions in 2020H2
Implement “Six Stabilities” and ”Six Guarantees”
Try out to stabilize growth
Strengthen the Party building
Maintain good political ecology
Adhere to market orientation
Accurate promotion to boost volume
Carry out “targeted policy for each
subsidiary”
Enhance the balanced development
Strengthen proprietary brand
Consolidate core competitiveness
Cultivate new driving forces
Seize the new development highland
Deepen reform and tackle key issues
Enhance corporate governance ability
Thank you!