In the environment of rapid growth in China's new energy vehicle market, BAIC Blue Valley is still in the midst of declining sales and high losses.

　　Recently, Beijing New Energy Automobile Co., Ltd. (the securities name is BAIC Blue Valley) released its 2021 semi-annual financial report. Data show that from January to June 2021, the company achieved revenue of 2.437 billion yuan, a year-on-year decline of 21.69%; a net loss of 1.409 billion yuan, a year-on-year decrease of 2.68%.

　　Although affected by the shortage of raw materials and other unfavorable factors, thanks to the recovery of the auto market from the epidemic, the revenue and sales growth of independent auto companies in the first half of this year have increased significantly. However, BAIC Blue Valley, which is on the fast-growing new energy vehicle track, has not yet reversed its decline, and revenue and sales are showing a further decline.

　　Revenue declines and deep losses

　　In the environment of the rapid growth of China's new energy vehicle market, BAIC Blue Valley is still in the midst of declining sales and high losses.

　　From January to June 2021, BAIC Blue Valley’s operating income was 2.437 billion yuan, a year-on-year decrease of 21.69%; the net loss attributable to shareholders of listed companies was 1.813 billion yuan, which was 2.68% smaller than the same period last year; attributable to shareholders of listed companies The net loss after deducting non-recurring gains and losses was RMB 20.97, which was 5.43% larger than the same period last year. In the first half of this year, auto companies generally recovered from the impact of the epidemic and achieved a significant rebound in financial performance. BAIC New Energy still failed to stabilize its decline.

　　In response to the company’s loss and expense growth, BAIC Langu explained that due to intensified industry competition, multiple iterations of competing products and obvious brand differentiation, the company increased its promotion efforts, resulting in a year-on-year decline in gross profit margin; in addition, the company’s production and sales did not meet expectations , The existing gross profit cannot cover the inherent costs and expenses, which intensified the year-on-year decline in gross profit margin; in order to promote the improvement of the ARCFOX polar fox brand and channel construction, the company increased its brand communication and increased its advertising and operating expenses; in order to build its own technological capabilities, self-developed research and development The amortization of non-patented technology increased.

　　Data shows that in the first half of this year, BAIC Blue Valley’s sales expenses and R&D expenses increased by 75.92% and 55.94% year-on-year, respectively, to 532 million yuan and 408 million yuan. However, in comparison with the new forces in car manufacturing, Xiaopeng Motors' research and development expenses in the same period reached 1.398 billion yuan, and Weilai's research and development expenses in the same period were 1.57 billion yuan, which were significantly higher than the investment level of BAIC Blue Valley.

　　Although the company suffered serious losses, BAIC Langu stated that during the reporting period, production and operation were normal, financial conditions were stable, monetary funds were sufficient, and credit lines were sufficient. At present, all debts are repaid on time.

　　Today, BAIC Blue Valley has two product brands, ARCFOX Polar Fox and BEIJING. Among them, Jihu is a high-end brand. Two high-end pure electric passenger cars, Alpha T and Alpha S, are currently on the market. The BEIJING brand is an economical brand. Series models.

　　Production and sales data show that in July 2021, BAIC Blue Valley only produced 350 cars, down 68.77% year-on-year, and sold 3,491 cars, up 73.77% year-on-year; among them, the highly anticipated Jihu brand delivered 525 cars in July. The month-on-month increase was 90%. As of July, the company has produced 2,507 cars, a year-on-year decrease of 73.81%, and sold 10,450 cars, a year-on-year decrease of 37.46%.

　　The obvious imbalance between the production and sales of BAIC Langu means that most of its vehicles sold this year are dealing with previous inventory. Data show that the company's capacity utilization rate in the first half of this year was only 5.35%, while the capacity utilization rate in 2020 is still 9.96%.

　　According to the statistics of the China Association of Automobile Manufacturers, the production and sales of pure electric passenger vehicles in the first half of 2021 were 958,000 and 941,000 respectively, a year-on-year increase of 1.7 times and 1.6 times respectively. BAIC Blue Valley’s production and sales have declined year-on-year, which is in sharp contrast with the accelerated expansion of China’s new energy vehicle market.

　　subsidies to decline the decline of the brand

　　As the “head player” of new energy vehicles with annual sales of more than 100,000, the sales performance of BAIC New Energy has declined significantly, and it is even far lower than that of new car manufacturers.

　　In 2018 and 2019, taking advantage of the policy dividend of new energy vehicles, BAIC New Energy, which has an earlier layout in the industry, once reached a record high of annual sales of more than 150,000 vehicles, ranking firmly as the leader of China's new energy vehicle industry. in. BAIC's EU series has also become the only domestic single model with a breakthrough of 100,000 vehicles. At the same time, with high government subsidies, the company also achieved net profits of 155 million yuan and 92.101 million yuan in 2018 and 2019, respectively.

　　However, the sales volume of BAIC New Energy has experienced a cliff-like decline in 2020. The cumulative sales volume that year was only 25,914 units, a year-on-year decrease of 82.79%. In the first half of this year, the company's sales have not improved yet. BAIC Blue Valley's annual net loss reached 6.482 billion yuan.

　　The industry’s view is that under the gradual decline of subsidies, consumption upgrades, and the shift of new energy vehicle sales from public vehicles (such as taxis and online car-hailing) to private vehicles, BAIC New Energy failed to grasp the industry’s policy-driven development. Turning to market-driven opportunities to improve product power and brand power, it quickly declined. The impact of the epidemic has further exacerbated the downward trend.

　　In terms of personnel affairs, BAIC Langu also experienced significant changes in the first half of the year. As of the announcement in the mid-year report, nine executives of this company have applied for resignation. Among them, the company's chairman, director, chairman and member of the strategy committee of the board of directors, Jiang Deyi, had been in office for less than six months and resigned at the beginning of this year on the grounds of work. After replacing Jiang Deyi’s chairman, Liu Yu, the company’s manager, also resigned as manager and was replaced by Dai Kangwei, deputy secretary and general manager of Beijing New Energy Automobile Co., Ltd., who had a background in technology research and development.

　　In recent years, BAIC's new energy vehicles have frequently caught fire and spontaneous combustion accidents, posing safety hazards. Affected by this, in March 2021, BAIC New Energy recalled some EX360 and EU400 pure electric vehicles, a total of 31963, on the grounds of consistency differences in the power battery systems of some vehicles, which became a larger case of new energy vehicle recalls. . However, some vehicles have experienced problems such as fast charge and slowdown and shortened battery life after the recall and upgrade. This way of achieving "safety upgrades" by limiting battery performance has caused complaints and dissatisfaction from car owners.

　　As the “first new energy vehicle stock in China”, BAIC Blue Valley’s share price has also fallen from a level of close to RMB 15 per share in 2016 to a trough of RMB 5 per share in the first half of 2020. It wasn't until 2021 that the concept of new energy vehicles rose sharply, and BAIC Blue Valley's stock price took advantage of the momentum to recover.

　　Extreme Fox car has a difficult breakthrough

　　Facing the increasingly competitive market environment, BAIC New Energy has begun to change its thinking and will focus more on market sales and product development. At the same time, it will cooperate with Huawei, Baidu, Magna and other partners to enhance product technology development capabilities.

　　BAIC Langu stated in its financial report that the company focused on four areas of work in the first half of this year. In terms of high-end brands, promote ARCFOX brand promotion and channel construction, and establish a market channel layout that combines direct sales and distribution, and a combination of urban business district showrooms and delivery centers; in terms of product technology development, the high-end model of Polar Fox αS is launched and the development is completed. Two long-life battery packs, a new generation of SOA (Service-Based Software Architecture) vehicle control electronic and electrical architecture design, and a new generation of smart cockpit platform integrated design. In addition, the company has also set out to improve product quality control, optimize organization settings and assessment and incentive mechanisms, implement cost reduction and efficiency enhancement, and improve asset structure.

　　In April 2021, BAIC Blue Valley and Magna cooperated to release the second model of its high-end brand ARCFOX Polar Fox-Alpha S. Among them, the Alpha S Huawei HI version is also equipped with Huawei's high-end autonomous driving ADS system, which is priced from 388,900 yuan to 429,900 yuan. According to official information, this model is not only equipped with Huawei's HI solution, but also the first smart electric vehicle equipped with Huawei's lidar solution.

　　On May 21st, BAIC Blue Valley raised funds through a non-public offering of shares, raising a total of 5.5 billion yuan. The fixed increase was oversubscribed by 20%, including BAIC Group, CATL, Beijing Electronic Control, Caitong Fund, etc. to participate in the fixed increase. The funds raised this time will be used for ARCFOX brand high-end vehicle development and network construction projects, power exchange business system development projects, 5G intelligent network connection system upgrade projects and supplementary working capital. BAIC Blue Valley said that as the fundraising projects are completed and put into production one after another, the company will further increase the scale of its new energy vehicle business and enhance and consolidate its market position.

　　For the second half of the year, BAIC New Energy stated that it will continue to focus on ARCFOX polar fox brand promotion and channel construction; and jointly promote the N61 HBT model project with Huawei to ensure that the αS HI version and other key products in the second half of the year are completed on schedule, and at the same time promote the N61 HBT long-term development. Pre-research work for the aviation version and N60 HBT project; jointly promoted the Robotaxi project with Baidu, completed the system loading, product verification, and system integration joint testing of the Apollo autonomous driving system on the Jihu car, and realized the product delivery as planned.

　　In the "Blue Valley Plan" formulated at the beginning of this year, BAIC Blue Valley proposed a plan to "return BAIC New Energy to No. 1 within three years", and set the goal of selling 12,000 vehicles for Jihu in 2021.

　　However, data shows that from January to July this year, the cumulative wholesale sales of Polar Fox Alpha T were 1,191, and the cumulative wholesale sales of Polar Fox Alpha S were 604, which is a long distance away from 12,000 vehicles. The goal is difficult to achieve.

　　In addition, the fact that the Jihu brand chooses to rely on Huawei, Baidu and Magna to improve its product strength instead of relying on its own research and development model has also been questioned. An automotive analyst told Caijing.com Auto that Polar Fox Alpha S is not Huawei’s only cooperative model. With the expansion of Huawei's smart car technology, it is difficult to maintain the first-mover advantage established by the first cooperation between Polar Fox and Huawei. Too long. However, the unmanned vehicle cooperation between Jihu and Baidu can hardly bring substantial results to the company's operations in a short period of time. Whether it is compared to traditional car companies or new front-end car manufacturers, the magnitude of BAIC Blue Valley's self-research investment is relatively low. It can be said that the current response measures of BAIC Blue Valley are still not enough to get the company out of danger.