In terms of profit, CAR Inc' s adjusted EBITDA (profit before interest, tax, depreciation and amortization) increased by 6.4% year-on-year, about RMB 3.46 billion, but its net profit decreased by 89.3% compared with the same period of 20 18, about RMB 30 million, and its adjusted net profit was about RMB 290 million.
It is worth mentioning that the announcement pointed out that the adjusted net profit and the decline in net profit include external factors such as exchange losses related to CAR Inc' s dollar-denominated liabilities and weak demand in tourist cities.
In addition to revenue and profit, CAR Inc' s strong cash-generating ability in fiscal year 20 19 also attracted market attention. According to the announcement, as of the end of 20 19, CAR Inc' s free cash flow inflow was about 152 billion yuan, the second highest in history.
Driven by a number of business indicators in the annual report, car companies were active in the Hong Kong stock market the day after the annual report was released (18 March). Against the background of the continuous decline of the Hang Seng Index, it closed down more than 4%, and CAR Inc rose 7.59% to close at HK$ 4.68 per share, with the highest intraday increase exceeding 10%.
cash is king
Compared with income, profit and other indicators, the change of free cash flow of CAR Inc. in fiscal year 2065438+09 is the most significant.
According to the annual performance announcement of CAR Inc. 20 19, CAR Inc.' s free cash flow during the reporting period was about 152 billion yuan. In the same period last year, CAR Inc' s free cash flow outflow was about 973 million yuan, a year-on-year change of 255.8%.
The free cash flow of automobile companies increased greatly in 20 19. According to the announcement, it mainly comes from its active used car sales strategy. It is reported that by the end of 20 19, the car company had disposed of a total of 23,203 vehicles, of which 20 19 disposed of used cars 12050 vehicles in the fourth quarter. The resulting second-hand car sales revenue is about 210.3 billion yuan.
At the end of June, 2020, 5438+0, the epidemic broke out. Before the economic environment was dragged down, a large number of used cars were disposed of, or the risk of high sales cost of used cars was reduced in CAR Inc ... Compared with 20 18, the sales cost of used cars decreased by 1.2 percentage points in 20/9, and the depreciation cost increased.
In addition to the sales of used cars, financial leasing has become another source of free cash flow for auto companies ... The announcement shows that as of the end of 20 19, the accounts receivable of spot financial leasing of CRRC shares were about 340 million yuan, a year-on-year increase of 36.4%.
It is worth mentioning that, except for the substantial increase of free cash flow, by the end of 20 19, the total book cash of car companies reached about 5.88 billion yuan, an increase of nearly 70.9% compared with the end of 20 18.
CAR Inc.' s strong cash-generating ability in 2019 years not only maintained the business sustainability during the reporting period, but also consolidated the company's financial situation, which also provided a capital base for the company to cope with the current epidemic with uncertain duration.
According to the summary of the announcement strategy, CAR Inc will continue to adopt the strategy of "cash is king" to cope with the grim situation under the background of the epidemic. It is reported that car companies have stopped buying new cars to maintain advanced safety level, and will continue to sell more used cars to supplement their working capital.
After the announcement of CAR Inc' s current performance, its indicators and development strategy have been recognized by peripheral institutions. 17 In March, according to domestic media reports, after CAR Inc. 20 19 annual results were announced, UBS maintained its overweight rating with a target price of HK$ 5.5 per share.
Epidemic or opportunity
In the 20 19 annual performance announcement, CAR Inc repeatedly mentioned the novel coronavirus (coronavirus pneumonia-19) epidemic. Under the epidemic, CAR Inc was also hit by the decline in business volume and was forced to temporarily close many service points.
In response to the epidemic, CAR Inc not only took the opportunity to increase free cash flow in the above-mentioned fiscal year 20 19, but also became the key to accumulate in advance in wireless mobile technology and user habits.
According to the announcement, the number of self-service pick-up orders from 20 19 to 12 accounts for 88% of the total orders. During the reporting period, 94% of car rental bookings were made through CARINC.app.
CAR Inc has long cultivated the habit of users picking up their own cars, and the corresponding technologies and models have also been matched, which just meets the travel needs of consumers under the epidemic.
According to iResearch's Consumer Consumption Index Trend Report under the Influence of the Epidemic, during the epidemic, residents mainly chose private cars and bicycles that avoided contact with others as much as possible, accounting for 56.3% and 19.7% respectively, and only 8.4% chose to travel by car online. Only 20.3% of the users who usually choose to take taxis online during their daily trips kept their travel habits during the epidemic, and the outflow of users reached 79.7%.
The massive outflow of online car rental users is an opportunity for a series of car rental platforms headed by CAR Inc ..
Taking CAR Inc as an example, during the epidemic period, the promotion of self-service car pickup was obviously strengthened, and the concept of "non-contact car pickup in the whole process" was put forward. In addition, according to the announcement, CAR Inc has launched various long-term rental schemes for returning to work in late February to attract more users to choose car rental as a mode of travel under the epidemic.
Focus 2020: improving profitability
Although EBITDA hit a record high in fiscal year 20 19 and achieved profit, the year-on-year decline in net profit still needs CAR Inc to sound the alarm. In the announcement, the car company also said that improving profitability will be the focus in 2020.
According to the announcement, CAR Inc will stimulate the company's profitability by improving operational efficiency and controlling costs.
CAR Inc' s fleet rental utilization rate may be a major concern in improving operational efficiency.
According to the announcement, among the total rental income of the car company by the end of 20 19, the "fleet rental and other" income was about 640 million yuan, which was 24.9% lower than the same period of 20 18. CAR Inc attributed this to the reduction of UCAR's rental fleet.
In addition, according to the announcement, CAR Inc will launch an enhanced intelligent assistant system in the company at the beginning of the second quarter to further improve operational efficiency.
In terms of cost control, according to the announcement, CAR Inc.' s operating costs, management expenses and financial expenses all increased to varying degrees during the reporting period, or CAR Inc. will strengthen cost control in 2020.
It is reported that UBS Group AG predicts that CAR Inc will take comprehensive measures such as reducing price discounts, improving fleet utilization, stabilizing depreciation rate of used cars and reducing financial costs in 2020, which is expected to significantly improve the company's profits. At the same time, UBS predicts that CAR Inc' s adjusted net income will increase at a compound annual growth rate of 47% during the period of 20 19-202 1.
According to the conference call of CAR Inc.' s earnings report, CAR Inc. has paid off $500 million in debt since 2020. At the same time, Car Co., Ltd. also announced on March 13 that the interest rate of panda bonds remained unchanged at 5.50%, and the funds corresponding to the upcoming panda bonds were ready.
Holding a lot of cash, the debt ratio has dropped sharply, and the hidden opportunity of car rental business after the epidemic, CAR Inc. 2020 has a promising future.
This article comes from car home, the author of the car manufacturer, and does not represent car home's position.