Investment Summary
Net Profit Fell by 26% in the Middle of 2019
According to the interim results of BAIC, in 2019H1, the Company recorded a revenue of
RMB87,764 million, an increase of 14.1% yoy, a net profit attributable of RMB2.09 billion, a
decrease of 25.9% yoy; and an EPS of RMB0.25, while that of 2018H1 was RMB0.36.
Gross Margin Declined due to the Down-regulation of the Product Mix of Beijing Benz
The comprehensive gross margin of BAIC recorded 23.48%, a decrease of 3 ppts yoy. Though
the revenue increased, the gross profit was basically flat, with a slight increase of 0.84%. This
is mainly because Beijing Benz`s low-priced Class-A models accounted for a larger share of
sales, causing the product mix to be down-regulated. In H1, Beijing Benz recorded a sales
volume, revenue and gross profit of 282,000 vehicles, RMB77.81 billion, and RMB22.02
billion, respectively, an increase of 11.9%, 10.8% and 0.16% yoy, with the average gross
profit of single vehicle declined by 10%, approx. In H2, Beijing Benz will launch new models
including the interim modified long-wheelbase GLC SUV, brand-new GLB SUV, EQC EV SUV,
and A35-LAMG. With the increased demand for premium cars, we are confident that Beijing
Benz will continue to maintain its sound growth momentum.