Since the second half of 2018, we have come to a conclusion that it is not too much to describe the development of the auto parts industry with "inconsistency between the outside and the inside". The total performance data of 135 listed companies in the first half of this year show that the trend of "the stronger, the weaker" is more and more obvious, and there is no continuous improvement of profits under the growth of scale. What is the situation faced by parts enterprises today? How can we get out of the dilemma?

 

The overall revenue growth has been significantly driven, and the net profit has not been continuously improved

 

According to the statistical data of the report on in-depth market research and investment prospect prediction and analysis of the auto parts manufacturing industry released by the forward looking Industry Research Institute, the cumulative revenue of 135 enterprises in the first half of this year reached 402.39 billion yuan, an increase of 16.52% compared with 345.34 billion yuan in the same period in 2017. The cumulative net profit attributable to listed shareholders was 27.476 billion yuan, an increase of 18.66% compared with 23.156 billion yuan in the same period in 2017.

 

Among them, five companies with a revenue of more than 10 billion yuan in the first half of 2018 are Weichai Power, Huayu automobile, Junsheng electronics, Zheng Meiji and Fuyao Glass. Their impact on the overall revenue growth of the industry is very obvious. Excluding these five enterprises, the whole market is another picture. The revenue of 130 other listed Parts Companies in the first half of this year totaled 193.06 billion yuan, a year-on-year increase of only 7.5%; The cumulative net profit reached 15.378 billion yuan, a year-on-year increase of only 1.04%.

 

Analysis of two competitive situations

 

1. The stronger the strong, the weaker the weak.

 

Large enterprise groups rely on diversified layout to reduce market operation risks; Rely on continuous merger and reorganization to improve asset utilization and reduce losses and costs. In the first half of 2018, Junsheng electronics had a revenue of 22.6 billion yuan, a year-on-year increase of 72.90%, and a net profit of 821 million yuan, a year-on-year increase of 33.39%. The increase was mainly due to the completion of the delivery of Takata's excellent assets. Junsheng electronics integrates takada's excellent assets with its KSS company into Junsheng Safety System Co., Ltd. therefore, Junsheng safety revenue ranks among the top 30 global auto parts and becomes the second largest supplier of auto safety products in the world. At present, Junsheng electronics adheres to the two development directions of automotive electronics and safety and maintains high investment to ensure the certainty and sustainability of long-term development.

 

2. The scale continues to expand, but the profits do not increase, or even decline seriously

 

The revenue of 135 enterprises fell in 30, while the profit decreased year-on-year and the loss reached 63, accounting for nearly half. Many small and medium-sized auto parts enterprises are in dire straits and their future is uncertain.

 

At present, with the growth of China's automobile market and the improvement of product preservation rate, the demand for new cars has begun to decrease, resulting in the intensification of industry competition. At the same time, the polarization of the parts market is becoming more and more obvious. Sino foreign joint ventures, zero integration cooperation and merger and integration among peers herald the start of a new round of reform. Under the situation that manufacturing costs generally continue to rise, ensuring the stability of main business and team has become the key for some parts enterprises to tide over the difficulties.

 

Strengthening the main business and opening up territory is still the focus

 

In the first half of this year, there were few enterprises that maintained rapid growth in both revenue and net profit. Yinlun Co., Ltd. was one of them - revenue increased by 30.82% and net profit increased by 21.18% year-on-year. Yinlun Co., Ltd. has built five marketing platforms with products as the core, and has continuously opened up new customers and projects in recent years. In the first half of this year, yinlun Co., Ltd. has become the designated supplier of heat exchange assembly of Geely PMA pure electric platform, with a supply of 3.38 million sets in the future; Become a supplier of D4 and P4 engine oil coolers for Jaguar Land Rover UK factories, with a total supply of 2.25 million units expected in the future. In addition, yinlun also passed the audit of the battery water-cooling board system of GM global new energy vehicles. This series of actions laid the foundation for the continuous development of yinlun's future market.

 

Xusheng shares are deeply tied to Tesla. The increase of Model3 production has led to a sharp rise in Xusheng's revenue. In the first half of this year, the revenue increased by 40.52% year-on-year and the net profit increased by 20.24% year-on-year. Xusheng began to cooperate with Tesla in 2013, starting from the supply of individual aluminum parts to the supply of core system parts such as transmission system, suspension system and battery system. From 2015 to the first six months of this year, the sales revenue of Xusheng to Tesla accounted for 50.27%, 56.61%, 56.46% and 60.10% of the main business revenue respectively. In order to avoid the high risk of customer concentration, Xusheng has established cooperative relations with Polaris, Weilai, Faraday, Ningde times, Great Wall Motor and JAC.

 

The diversified layout of group enterprises reduces risks, accelerates mergers and acquisitions and improves market competitiveness

 

The diversified layout of group enterprises can effectively reduce the fluctuation risk of the single market, and taking advantage of the situation and accelerating M & A has also become the main measure for these enterprises to improve their market competitiveness.

 

The revenue growth of Huayu automobile and Junsheng electronics came from foreign mergers and acquisitions. The performance of Huayu automobile in the first half of the year continued to maintain rapid growth by acquiring 50% of the shares of Xiaosi lamp (now renamed Huayu vision). Junsheng electronics has completed the consolidation of the high-quality assets of takada company, and has added about US $5 billion in new orders since the handover.

 

Zheng Meiji's revenue in the first half of this year was 12.72 billion yuan, a year-on-year increase of 290.04%. Zheng Meiji has successfully realized the transformation from coal machinery field to auto parts market and moved towards "two wheel drive". At present, the revenue of auto parts field has accounted for 3 / 4 of its total revenue. Zheng Meiji completed the merger of SEG automotive GmbH in June this year after acquiring the equity of six parts companies of ASIMCO group in early 2017. In the first half of the year, the total revenue of Zhengmei auto parts reached 9.155 billion yuan, of which 7.124 billion yuan was added by SEG company.

 

At present, China's economy has shifted from high-speed development to high-quality development. Although the production and sales volume of domestic automobile industry has ranked first in the world, on the whole, it is in the process of transformation from investment scale driven development to innovation driven development, and from imported technology to independent innovation. Parts industry is an important foundation for the healthy development of automobile industry. The development of parts industry is inseparable from four key factors: key technology, quality brand, enterprise strategy and industrial chain coordination. There is still room for progress in these four aspects.