Tue Nov 12, 2019 23:51
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DONGFENG GROUP (489)

Principal Activities

Principally engaged in the manufacture and sale of automobiles, engines and other automotive parts and rendering of financing services.

Latest Results

The Group's profit attributable to shareholders for the 6 months ended 30-06-2019 amounted to RMB 8.50 billion, an increase of 5.3% compared with previous corresponding period. Basic earnings per share was RMB 0.9864. An interim dividend of RMB 0.1 per share was declared. Turnover amounted to RMB 48.45 billion, a decrease of 16.4% over the same period last year, gross profit margin up 2.2% to 16.1%. (Announcement Date: 29 Aug 2019)

Business Review - For the six months ended June 30, 2019

In the first half of 2019, under the severe market situation, the Company maintained its focus on goals and achieved high-quality development.
The sales volume beat the market comprehensively and the market position remains stable. The Company sold 1,374,400 units of vehicles in the first half of 2019, representing a decrease of 9.0% on a year-on-year basis. Although the year-on-year growth declined, the descending rate was 3.4 percentage points lower than that of the industry market (the overall descending rate of the industry was about 12.4%). Against the background of negative growth in the automobile market and a large volume base , it has fully demonstrated the strength of steady growth and the ability of innovation and development of the Company. The Company has made steady progress in its economic operation, and its main operating performance indicators have steadily improved .

The sales performance of passenger vehicles of the Company outperformed the market as a whole. In the first half of 2019, the sales volume of the passenger vehicle of the Company was approximately 1,134,000 units, representing a year-on-year decrease of 11.3%, which was 2.7 percentage points lower than the descending rate of the industry (the overall descending rate of the passenger vehicles industry was about 14.0%). Sales volume of joint-venture passenger vehicles was 979,000 units, decreased by 7.9% on a year-on-year basis.

The sales performance of commercial vehicles achived a year-on-year increase against the industry trend. In the first half of 2019, the sales volume of commercial vehicles of the Company was 240,500 units, increased by 3.9% on a year-on-year basis, which was 8.0 percentage points higher than the industry (the overall descending rate of the commercial vehicles industry was about 4.1%). Among which, the sales volume of medium and heavy trucks was 137,000 units, representing a year-on-year decrease of 0.8%; and the sales volume of light trucks was 92,500 units, representing a year-on-year increase of 14.5%.

Inventory of vehicles has decreased significantly compared with the beginning of the year. As at the end of June, the total inventory was 405,800 units, which was less than the opening balance of the year by 22,300 units, representing a year-on-year decline of 5.2%.

1. Passenger Vehicle Business

Dongfeng Nissan, Dongfeng Honda and Dongfeng Infiniti beat the market in the passenger vehicle business. Dongfeng Honda and Dongfeng Infiniti grew against the sluggish market. All the leaders and employees of Dongfeng Peugeot Citroen Co., Ltd. and Dongfeng Renault Co., Ltd. overcame difficulties to push forward the reform and business adjustment.

The interim sales revenue of passenger vehicles of the Group for 2019 decreased by approximately RMB10,911 million, or 44.6%, to approximately RMB13,563 million from approximately RMB24,474 million for the interim period of 2018. The decrease in revenue was mainly from the passenger vehicle business of Dongfeng Peugeot Citroen Automobile Sales Co., Ltd. and Dongfeng Liuzhou Motor Co., Ltd..

2 Commercial Vehicle Business

The sales volume of Dongfeng Commercial Vehicle Co., Ltd. for the interim period of 2019 increased by 1.7% year on year, outperforming the industry. The sales volume of Dongfeng Automobile Co., Ltd. for the interim period of 2019 increased by 14.6% compared to the corresponding period of last year, beating the market by a big margin. Dongfeng Liuzhou Motor Co., Ltd.’s commercial vehicles’ sales volume outperformed the market. The sales volume of Zhengzhou Nissan’s commercial vehicles for the interim period of 2019 increased by 19.7% on a year-on-year basis, with market share increment ranking first in pickup truck industry in the first half of the year.

The interim sales revenue of commercial vehicles of the Group for 2019 increased by approximately RMB881 million, or 2.8%, to approximately RMB32,364 million from approximately RMB31,483 million for the interim period of 2018. The increase in revenue was mainly due to the sales growth of Dongfeng Commercial Vehicles Co., Ltd..

3 Auto Financing Service Business

Notable growth was achieved in the financing service sector, with 33.1% revenue increase on a year-on-year basis. The revenue and profit before income tax of Dongfeng Motor Finance Co., Ltd., Chuang’ge Financial Leasing Co., Ltd. and Dongfeng Nissan Auto Finance Co. for the first half of 2019 realized a year-on-year increase. The profit before income tax of Dongfeng Peugeot Citroen Auto Finance Co., Ltd. for the first half of 2019 also increased compare to the corresponding period of last year.

The interim revenue of financing service of the Group for 2019 increased by approximately RMB618 million, or 33.1%, to approximately RMB2,484 million from approximately RMB1,866 million for the interim period of 2018. The Group''s financing service business maintained its steady growth.

Business Outlook - For the six months ended June 30, 2019

As a result of many unfavorable factors such as the trade war initiated by the United States against China, consumption in the Chinese auto market became sluggish in the first half of 2019. The overall consumption was low, while the decrease in the sales in the industry being reduced in June. In the second half of 2019, China will still face many risks and challenges in its economic development. The downward pressure on the domestic economy will still be great. It is expected that the automobile market will show a negative growth rate of approximately 5% throughout the year. New energy vehicles are expected to see an upward trend, but due to decrease in subsidies and related uncertainties, the annual sales volume of new energy vehicles in China is expected to be approximately 1,500,000 units.

In the 5-10 years to come, Dongfeng Motor Group will make greater efforts to realize high-quality development, and will focus more on the quality development, earnings and construction of core capabilities. The Group will implement the principles of innovative development and concentrated development into the new planning scheme.

The Company will take the construction of domestic excellent enterprise and even become a world-class automotive enterprise as its development goal, adhere to the enterprise orientation of “providing users with all-round high-quality automotive products and services” and actively promote the orderly development of various missions. Its main development goals of the Company are as follows:

(1) To forerun the industry in terms of operation quality and continue to improve and consolidate the operating profit margin;

(2) To strive to expand the market share of automobile, and expand the operation scale based on high-quality development;

(3) To hold the leading position of the self-owned brand in the industry by 2023;

(4) To become a leader in the industry’s new business with becoming first tier in the industry in terms of sales volume of new-energy vehicle by 2023;

(5) To continuously promote our brand popularity and elevate the international influence of Dongfeng brand to strive to become a global mainstream car brand.

Source: Dongfeng Motor (00489) Interim Results Announcement

Business Nature

The Group is one of the three largest automotive manufacturers in the PRC. Apart from manufacturing commercial and passenger vehicles, members of the Dongfeng Motor Group also manufacture commercial and passenger vehicle engines and a comprehensive range of auto parts for various vehicles.

Prospect

The Board considers that the business segments of the Dongfeng Motor Group as a whole contributed to encouraging results in 2006. On the other hand, the Dongfeng Motor Group has been facing long-term challenges. Its honorable shareholders, please be assured that it always uphold the philosophy of adding value for you regardless of setbacks or accomplishments. The Board is committed to enhancing and strengthening the Company¡¦s profitability and position in the industry in order to push forward its lasting development in 2007 and the years to come.

Chairman
Zhu Yanfeng
Contact Info
Company Address:
Special No. 1 Dongfeng Road, Wuhan Economic and Technology Development Zone, Wuhan, Hubei 430056, PRC¡¦
Web: http://www.dfmg.com.cn
Quote
HSI: 27,065.28 138.73
7.93
0.05 (0.6%)
As of16:15 12 Nov 2019
Open: 7.97 52Wk High: 8.80
Day High: 7.97 52Wk Low: 5.87
Day Low: 7.78 P/E: 4.623
Prev. Close: 7.88 Yield: 4.948%
Volume: 7.03M
Mkt Cap: 22.50B
Turnover: 55.36M NAV: 15.641
Quotes are delayed by at least 15 minutes.
Contact DONGFENG GROUP
Company Address:
Special No. 1 Dongfeng Road, Wuhan Economic and Technology Development Zone, Wuhan, Hubei 430056, PRC¡¦
Web: http://www.dfmg.com.cn

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