Investment Summary
FY20 Profit Decreases by 10% yoy, Mainly Due to Impairment
In 2020, GAC recorded operating revenue of RMB63,157 million, up by 5.78% Y-o-Y; net
profit attributable to the parent company was RMB5,966 million, down by 9.85% Y-o-Y; in
addition to the impact of COVID-19 pandemic, the decline in results was mainly due to the
large accrued expenses in the fourth quarter (provision for asset impairment of RMB720
million in a lump sum). After deducting non-recurring gains and losses, net profit
attributable to the parent company was RMB4,807 million, up by 25.17% Y-o-Y. Self-owned
brands achieved loss reduction. After deducting non-recurring gains and losses and return
on investment, net loss attributable to the parent company was RMB5.1 billion, down by
12% Y-o-Y. EPS was RMB0.58, down by 11% Y-o-Y. The final dividend was RMB0.15 per share.
Combined with the interim dividend of RMB 0.03 per share, the dividend payout ratio was
31%.
Gross margin decreased by 0.38 ppts Y-o-Y, mainly due to the negative effect of scale caused
by the decline in sales volume of self-owned brands. The period expense ratio for the whole
year decreased by 2.1 ppts Y-o-Y, mainly because the sales expense ratio fell by 1.86 ppts,
and other expense ratios remained flat Y-o-Y. The R&D expenses totaled RMB5.1 billion, of
which 17% was expensed. Joint ventures had a good profitability. The annual return on
investment was RMB9,911 million, up by 2.96% Y-o-Y. Specifically, the return on investment
in associates and joint ventures was RMB9,571 million, up by 1.83% Y-o-Y. At the end of
2020, monetary funds were RMB28.5 billion and interest-bearing liabilities were RMB14.8
billion.