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200 8 Annual Results Presentation A pril 15 th , 2009
21
P.1 2008 Annual Results 2008 Annual Results Presentation Presentation April 15 April 15 th th , 2009 , 2009
description
200 8 Annual Results Presentation A pril 15 th , 2009. Content. PRC Auto Industry Overview. DFG Business Overview. DFG Financial Performance. Outlook of PRC Auto Industry and DFG in 2008. PRC Auto Industry Overview. PRC Auto Market Recorded Stable Growth. - PowerPoint PPT Presentation
Transcript of 200 8 Annual Results Presentation A pril 15 th , 2009
1
Good morning ,ladies and gentlemen,
Welcome to attend DFG’s annual result Announcement for 2008 and thank you for your long term attention and support of our Company. I will brief you on the performance of China auto industry in 2008 as well as DFG’s business and financial performance in 2008 and I’ll also share with you our outlook for China auto industry and the Group’s business arrangement for 2009.
P.*
PRC Auto Industry Overview
First , let me make a general review of PRC auto industry in 2008.
P.*
Unit:0,000
575.8
721.6
879.2
938.1
31.04%
68.96%
71.73%
28.27%
28.37%
71.63%
72.02%
27.98%
Total Sales Volume
PV
CV
2008 was a very eventful year for PRC auto industry. Impacted by global financial crisis and the changes in PRC macro-economy and auto policies and regulations, China auto industry experienced sharp fluctuation in 2008. in the 1H, auto industry saw robust sales growth, while the 2H witness huge market contraction. Annual sales for 2008 was 9.381mn units, representing a growth rate of 6.7%, recorded a sharp decrease of 15.1% compared with the growth rate in 2007.
PV market has been the major growth driver for PRC auto industry. PV sales growth rate in 2008 was 7.27%,0.6% higher than industry average . From 2005 to 2007, PV sales grew by more than 1mn units every year. Although 2008 witnessed slight PV growth decline, PV sales proportion was still on the rise, with PV sales accounting for 72.02% of total PRC auto sales, representing 0.4% YoY growth and increased by 3% compared with that in 2005.
CV market was highly fluctuated due to macro economy slow down and implementation of new emission standard. CV market recorded a sales of 2.625mn units in 2008, representing 5.25% YoY growth, which was 1.4% lower than industry average.
In 2008, PRC auto export also shrank due to declined demand in global market. Total export was 681,000 units, increased by 11.1% compared with PRC auto export of 613,000 units in 2007. This marked the end of more than 50% high export growth in the past few years.
Although PRC auto industry experience high volatility in short term, its growth rate is still significantly higher than other major markets in the world.
Chart1
2005
2005
2006
2006
2007
2007
2008
2008
PV
CV
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet1
2005
2006
2007
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
PV
68.96%
71.73%
71.63%
72.02%
CV
178.7
204
249.4
262.5
CV
31.04%
28.27%
28.37%
27.98%
Total
575.8
721.6
879.2
938.1
Sheet1
0
0
0
0
0
0
0
0
PV
CV
0
0
0
0
0
0
0
0
Sheet2
Sheet3
P.*
PV :
Rapid Growth of Sedan and SUV
PV Consumption Demand Transferring to Mid-western Region
Note:
Jiangsu, Shanghai, Zhejiang, Fujian,
Central and Western Region: Other Provinces in PRC Mainland
Central China –Shangxi, Henan, Anhui,Hubei, Jiangxi, Hunan
PRC PV Registration Composition by Region
In recent years, basic sedan continues to be the major growth driver for the fast growth of PV sales. In 2008, sales proportion of sedan reached 74.7%, which was in line with the sedan growth rate in 2007 and growing by 4.5% compared with that in 2005. Meanwhile, due to increased demand for individualized consumption, SUV sales proportion grew to 6.63% in 2008, increased 1% YoY.
Eastern regions are still the major consumption market for PV, but consumption share in Mid-western regions is steadily picking up. PV registration in Mid-western regions accounted for 36.4% of total national consumption, growing by 3.6% YoY.
Chart3
2005
2005
2005
2005
2006
2006
2006
2006
2007
2007
2007
2007
2008
2008
2008
2008
Sedan
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
P.*
Unit: 0,000
Rising HDT share in Trucks
In 2008, CV sales in China was 2.652 mn units, representing a 5.25% YoY growth. Slow down of growth rate was mainly caused by macro-economy slow down and implementation of new emission standard.
In recent years, sales proportion of HDT maintains a steady growing momentum, reaching 23.6% in 2008, representing 0.9% YoY growth.
Chart1
2005
2005
2005
2005
2006
2006
2006
2006
2007
2007
2007
2007
2008
2008
2008
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2008
2008
2005
2006
2007
2008
2005
2006
2007
2008
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
0
0
0
0
0
0
0
0
&A
0.1561264822
0.1277997365
0.5625823452
0.1534914361
0.1753283838
0.1153626499
0.5431182182
0.1661907481
0.2275058275
0.1104895105
0.5151515152
0.1468531469
0.2364273205
0.0906304729
0.5148861646
0.158056042
Chart4
2005
2006
2007
2008
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
DFG Business Overview
Next , let me brief you on the business performance of DFG.
P.*
Market Share Steadily Increases
Unit0000
DFG :
Unit:0,000
Ever since its listing, DFG has been a consistent outperformer in PRC auto industry. It is well positioned to resist cyclical downward risk because of its multi-strategic-partnership business model. DFG realized a sales volume of 1mn58,000 units, representing a growth of 11.42%, which was 4.7% higher than industry average growth.
DFG’s market share also rose steadily in the past few years. Its market share in 2008 was 11.3%%, increased 1% compared with that in 2005.
Among the Group’s 2008 PV sales, Japanese vehicles sold 514,500 units, which further drove its sales proportion in DFG to 70.77%
Chart8
2005
2006
2007
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
5357170.64%10.19%
7329120.59%9.39%
9210180.37%6.00%
08
08
2008
2008
2008
2008
2008
21643
0.39%
6.17%
9
12490
0.22%
3.56%
Sheet2
2008
350520
100.00%
2
0.00%
2
0.00%
14839
4.23%
68979
19.68%
68214
19.46%
53224
15.18%
3797
1.08%
69992
19.97%
23772
6.78%
43533
12.42%
4166
1.19%
Sheet3
P.*
Unit:0,000
Qashqai
2.4
Remarkable Performance of New PV Models
The Group’s PV business achieved strong growth in the past few years. PV sales was 727,000 units, increased by 14.01% YoY, which was 6.7% higher than PV industry average growth. Aggregate PV sales of the Group ranked NO.3 in PRC PV industry, with a PV market share of 10.8% in 2008, increased by 2% compared with that in 2005.
Fast growth of the Group’s PV business benefits from its extensive product mix and continuous flow of new models across all different PV segments from its JV partners. By the end of 2008, the Group had a wide coverage of 24 PV models. In 2008, the Group launched 7 new models to PRC market. In March, DF Nissan launched Qashqai, which achieved an annual sales of 24,000 units. In April, DPCA launched new Elysee, which saw an annual sales of 46,800 units in 2008. In June, new Teana was launched which sold 44,000 units in half year period. These newly launched models all achieved remarkable sales while at the same time, existing models also achieved good sales. Take DF Honda CRV as an example, since its launch in 2004 to Feb of 2009, aggregate sales exceeded 200,000 units. CRV March sales of 8479 units set a new monthly high for SUV sales in China, which further consolidated its dominating position in PRC SUV market.
Among the Group’s 2008 PV sales, Japanese vehicles sold 514,500 units, which further drove its sales proportion in DFG to 70.77%
Chart9
2005
2005
2006
2006
2007
2007
2008
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
Good Performance in Sub-segments
Strong Performance of Kinland
Dongfeng Kinland HDT was launched in May,2006. Sales volume reached 22,000 units in 2007 and exceeded 40,000 units in 2008. Other CV models such as Tianjin and Chenglong are all well received in the market.
Steady Growth of HDT and MDT Sales Volume
Unit:0,000
Unit:0,000
Unit:0,000
The Group’s CV business also grew steadily in the past few years. In 2008, CV sales was 331,000 units, among which HD and MD trucks sold 155,000 units, increased 27,000 units that of 2005.
The Group’s competitive edge in its HD and MD truck segment results from launching upgraded products to improve its product mix and respond to market demand. Sales of HD product Kinland in 2008 exceeded 40,000 units. MDT launched brand new product Tianjin to upgrade its product structure.
The Group’s LCV market share also increased constantly in recent years, with a sales volume of 131,000 units and a 11.1% market share, representing a 1.4% market share growth compared with that in 2005.
Chart13
2005
2006
2007
2008
12.8
11.7
15.2
15.5
Sheet1
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
Sheet1
2005
2005
2006
2006
2007
2007
2008
2008
PV
CV
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
58
2.5
12.16
1.4L
1.6L
>1.8L
proportion
12.8
11.7
15.2
15.5
Chart1
2007
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
Market Share
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
8.3
10.1
11.7
13.1
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
Market Share
DFG :Constant Upgrading and Expansion of Sales Network Utilization Rate Maintains at a Comparatively High Level
Comparatively High Level of Utilization Rate
Constant Effort in Network Construction
Unit:0,000
Unit:0,000
5357170.64%10.19%
7329120.59%9.39%
9210180.37%6.00%
08
08
2008
2008
2008
2008
2008
21643
0.39%
6.17%
9
12490
0.22%
3.56%
Sheet2
2008
350520
100.00%
2
0.00%
2
0.00%
14839
4.23%
68979
19.68%
68214
19.46%
53224
15.18%
3797
1.08%
69992
19.97%
23772
6.78%
43533
12.42%
4166
1.19%
Sheet3
Chart2
2004
2004
2004
2005
2005
2005
2006
2006
2006
2007
2007
2007
2008
2008
2008
5357170.64%10.19%
7329120.59%9.39%
9210180.37%6.00%
08
08
2008
2008
2008
2008
2008
21643
0.39%
6.17%
9
12490
0.22%
3.56%
Sheet2
2008
350520
100.00%
2
0.00%
2
0.00%
14839
4.23%
68979
19.68%
68214
19.46%
53224
15.18%
3797
1.08%
69992
19.97%
23772
6.78%
43533
12.42%
4166
1.19%
Sheet3
P.*
Strong Revenue Growth
Unit:RMB mn
PV Revenue
CV Revenue
Unit:RMB mn
Unit:RMB mn
Unit:RMB mn
The Group’s sales revenue maintained strong growth momentum with a sales revenue of 70.569 bn in 2008, growing 19% YOY.
Benefiting from fast sales growth, continuous improvement of product mix and outstanding performance of its new products, PV achieved a revenue of 48.66 bn, representing a 16.8% YoY growth.
Benefiting from the rising HDT sales contribution, CV sales revenue in 2008 reached 20.98bn, growing 24.1% YOY.
Chart4
2007
2008
Revenue
59318
70569
Sheet1
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
58
2.5
12.16
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
0
0
0
0
0
0
0
0
&A
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
58
2.5
12.16
0
0
0
proportion
0
0
0
0
2005
2005
2006
2006
2007
2007
2008
2008
&A
LD truck market share
33
817.2
618.9
339
0
0
0
0
0
0
0
0
&A
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
58
2.5
12.16
0
0
0
proportion
0
0
0
0
2005
2005
2006
2006
2007
2007
2008
2008
&A
LD truck market share
33
817.2
618.9
339
2005
2005
2006
2006
2007
2007
2008
2008
&A
DFG: Constant Improvement of Profitability Driven by Improved Product Mix
Unit:RMB mn
Unit:RMB mn
Unit:RMB mn
Unit:RMB mn
EBIT and EBIT Rate
ROERecurring
DFG’s recorded a significant higher sales growth than industry average, which enables the Group to enjoy a scale of economy. Product structure adjustment has achieved effective results, with increased sales of high added value products in its product mix. The Group spared no efforts to reduce cost through continuous improvement of its localization rate. Benefiting from all these efforts, the Group’s profitability has been constantly rising.
In recent years, the Group also saw a fast growth of its gross profit, along with an increased gross margin. In 2008, the Group’s gross profit amounted to 11.881 bn ,growing 21% compared with 2007. Gross margin was 16.8%, increased 0.3% YoY, and was 2.2% higher than 2005. Among which, PV gross margin was 19%, increased 0.7% compared with 2007. CV gross margin was 11.6% in 2008, dropped by 0.4% compared with 2007 due to a sharp market contraction in 2H of 2008.
In 2008, the Group’s EBIT amounted to 5.19 bn, growing 25.7% compared with the same period in 2007. EBIT margin in 2008 was 7.4%, improved 0.4% compared with 2007.
In 2008, the Group’s net profit was 4.04bn, increased by 7.2% compared with 2007. If the one-off deferred tax rebate of 520mn in 2007 is excluded, recurring net profit grew by 24.3%. Net profit margin was 5.7% in 2008, growing by 0.2% compared with that in 2007.
The Group’s ROE in 2008 was 20.7%, increased by 2.4% compared with 18.3% ROE in 2007.
Chart2
2005
2005
2006
2006
2007
2007
2008
2008
Liability-to-Asset Ratio
Unit: Day
The Group further improved its financial structure in 2008, with enhanced debt payment capability. By the end of 2008, the Group’s liability-to-asset ratio decreased from 60.9% in 2007 to 59.5% in 2008.EBIT Interest coverage ratio increased from 11.3% in 2007 to 13.2% in 2008. Its debt to capital ratio dropped from 28.8% in 2007 to 26.4% in 2008.
In 2008, the Group further enhanced its operating efficiency. Its accounts receivable turnover days decreased to 18 days in 2008 compared with the same period in 2007, which effectively reduced occupancy of its working capital.
Chart3
2007
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
0
0
0
0
0
0
0
0
&A
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
0
0
0
0
0
0
0
0
&A
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
0
0
0
0
0
0
0
0
&A
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
0
0
0
0
0
0
0
0
&A
63
45
P.*
DFG: Significant Increase of Cash Flow from Operation, Return Value to Investors through Stable Dividend Policy
Unit:RMB mn
Unit:RMB mn
Unit:RMB mn
Unit:RMB mn
The Group’s cash flow from operation reached 7.748bn, thanks to improved account receivable management. Net cut of account receivable in 2008 was 4.5bn. The Group’s cash flow increased 2.646 bn compared with that of 2007 due to such factors as increased profit before tax.
DFG has adopted a steady dividend payment policy to return value to its shareholders. From 2006-2008, the Group’s net profit was 2.081bn, 3.77 bn and 4.04bn respectively. Aggregate dividend payment amounted to 1.121bn.
Chart1
2007
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2008
2008
2005
2006
2007
2008
2005
2006
2007
2008
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
58
2.5
12.16
1.4L
1.6L
>1.8L
proportion
12.8
11.7
15.2
15.5
2005
2005
2006
2006
2007
2007
2008
2008
&A
LD truck market share
33
817.2
618.9
339
2005
2005
2006
2006
2007
2007
2008
2008
&A
0.1561264822
0.1277997365
0.5625823452
0.1534914361
0.1753283838
0.1153626499
0.5431182182
0.1661907481
0.2275058275
0.1104895105
0.5151515152
0.1468531469
0.2364273205
0.0906304729
0.5148861646
0.158056042
2007
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2008
2008
2005
2006
2007
2008
2005
2006
2007
2008
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
58
2.5
12.16
1.4L
1.6L
>1.8L
proportion
12.8
11.7
15.2
15.5
2005
2005
2006
2006
2007
2007
2008
2008
&A
LD truck market share
33
817.2
618.9
339
2005
2005
2006
2006
2007
2007
2008
2008
&A
0.1561264822
0.1277997365
0.5625823452
0.1534914361
0.1753283838
0.1153626499
0.5431182182
0.1661907481
0.2275058275
0.1104895105
0.5151515152
0.1468531469
0.2364273205
0.0906304729
0.5148861646
0.158056042
Followed is DFG’s financial performance.
P.*
Growth Prospect for PRC Auto Industry in 2009
Unit:0,000
Auto Sales Volume Growth in Major Auto Markets
Looking into the future, we still see a large growth potential for PRC auto industry due to the continuous development of China’s economy and a comparatively lower PV penetration rate( 33 units for 1000 people in 2007).So we see great growth potential for auto development in China.
Chinese economy is negatively impacted by global economic crisis, but the government recently released a series of policies to revive auto industry and stimulate auto sales. Coupled with the 4tn government investment, we believe all these measures will gradually take effect. According to statistics released by CAAC, 1Q PRC auto sales totalled 2,678,800 units, growing 3.9% YoY, and growing 24.51% QoQ. What’s more, PRC auto sales volume exceeded US for the first time in history to make it become the largest auto consumption market in the world. From an optimistic point of view, we think PRC auto industry will cross the sales threshold of 10 mn units, realizing a 10% growth rate.
Chart1
2005
2006
2007
2008
2009E
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
0
0
0
0
0
0
0
0
&A
23
878
758
656
Sheet1
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
USA
Japan
23
878
758
656
Sheet1
2005
2005
2006
2006
2007
2007
2008
2008
PV
CV
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
58
2.5
12.16
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
Chart1
China
China
Japan
Japan
5357170.64%10.19%
7329120.59%9.39%
9210180.37%6.00%
08
08
2008
2008
2008
2008
2008
21643
0.39%
6.17%
9
12490
0.22%
3.56%
Sheet2
2008
350520
100.00%
2
0.00%
2
0.00%
14839
4.23%
68979
19.68%
68214
19.46%
53224
15.18%
3797
1.08%
69992
19.97%
23772
6.78%
43533
12.42%
4166
1.19%
Sheet3
P.*
C-Quatre Sedan
Hatchback 207
PSA Peugeot Citroën
Benefiting from the government’s stimulus package to boost domestic demand, and coupled with DFG’s distinctive competitive edge, 1Q sales was 264,700 unit, increased by 8.86% compared with the 4Q of 2008. Among this, PV sold 198,300 units, growing by 5.47% compared with 4Q 2008. CV sold 664,000 units, growing by 20.41% QoQ..
Based on the most difficult scenario in PRC auto industry in 2009, we made our business plan for 2009. We aim to achieve better performance and improved management through continuous improvement of the weak links in the Group’s operation and to turn challenge into opportunities.
The Group plans to launch 7 new PV models in 2009. DF Nissan JV will launch new Sylphy. DPCA will launch C-Quartre sedan, hatch-back 207, hatch-back Elysee and C5. DF Honda plans to launch new model Civic and a brand new medium-high sedan.
Sales target for DF Nissan is 388,000 units; DPCA is 210,000 units; DF Honda plans to sell 185,000 units.
In 2009, DFG will continue to optimize its product structure to further improve its competitive edge and maintain a sustainable development. We aim to achieve a higher-than-industry average growth rate and a PRC leading profitability.
P.*
P.*
Tel: +8627 8428 5031
Fax: +8627 8428 5057
16,901
20,980
0
5000
10000
15000
20000
25000
20072008
36.6
31.9
58.2
53.7
46.9
51.6
43.3
41.89
49.61
45.19
55.14
62.39
53.01
47.99
72.15
67.29
56.75
55.76
46.71
52.81
63.5
57.63
68.9
75.86
71.71
55.34
84.72
80.87
71.36
72.69
64.09
67.16
77.28
69.23
80.09
83.93
85.94
66.35
105.66
92.26
83.5583.68
20
30
40
50
60
70
80
90
100
110
123456789101112
2005200620072008
12.8
11.7
15.2
15.5
0
5
10
15
20
2005200620072008
576
622
879
938
1,000
0
200
400
600
800
1000
1200
20052006200720082009E
2.2
4.01
0
1
2
3
4
5
20072008
345
388388
320
330
340
350
360
370
380
390
400
200620072008E
28.8%
26.4%
25.0%
25.5%
26.0%
26.5%
27.0%
27.5%
28.0%
28.5%
29.0%
20072008
60.9%
59.5%
58.5%
59.0%
59.5%
60.0%
60.5%
61.0%
61.5%
20072008
Good morning ,ladies and gentlemen,
Welcome to attend DFG’s annual result Announcement for 2008 and thank you for your long term attention and support of our Company. I will brief you on the performance of China auto industry in 2008 as well as DFG’s business and financial performance in 2008 and I’ll also share with you our outlook for China auto industry and the Group’s business arrangement for 2009.
P.*
PRC Auto Industry Overview
First , let me make a general review of PRC auto industry in 2008.
P.*
Unit:0,000
575.8
721.6
879.2
938.1
31.04%
68.96%
71.73%
28.27%
28.37%
71.63%
72.02%
27.98%
Total Sales Volume
PV
CV
2008 was a very eventful year for PRC auto industry. Impacted by global financial crisis and the changes in PRC macro-economy and auto policies and regulations, China auto industry experienced sharp fluctuation in 2008. in the 1H, auto industry saw robust sales growth, while the 2H witness huge market contraction. Annual sales for 2008 was 9.381mn units, representing a growth rate of 6.7%, recorded a sharp decrease of 15.1% compared with the growth rate in 2007.
PV market has been the major growth driver for PRC auto industry. PV sales growth rate in 2008 was 7.27%,0.6% higher than industry average . From 2005 to 2007, PV sales grew by more than 1mn units every year. Although 2008 witnessed slight PV growth decline, PV sales proportion was still on the rise, with PV sales accounting for 72.02% of total PRC auto sales, representing 0.4% YoY growth and increased by 3% compared with that in 2005.
CV market was highly fluctuated due to macro economy slow down and implementation of new emission standard. CV market recorded a sales of 2.625mn units in 2008, representing 5.25% YoY growth, which was 1.4% lower than industry average.
In 2008, PRC auto export also shrank due to declined demand in global market. Total export was 681,000 units, increased by 11.1% compared with PRC auto export of 613,000 units in 2007. This marked the end of more than 50% high export growth in the past few years.
Although PRC auto industry experience high volatility in short term, its growth rate is still significantly higher than other major markets in the world.
Chart1
2005
2005
2006
2006
2007
2007
2008
2008
PV
CV
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet1
2005
2006
2007
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
PV
68.96%
71.73%
71.63%
72.02%
CV
178.7
204
249.4
262.5
CV
31.04%
28.27%
28.37%
27.98%
Total
575.8
721.6
879.2
938.1
Sheet1
0
0
0
0
0
0
0
0
PV
CV
0
0
0
0
0
0
0
0
Sheet2
Sheet3
P.*
PV :
Rapid Growth of Sedan and SUV
PV Consumption Demand Transferring to Mid-western Region
Note:
Jiangsu, Shanghai, Zhejiang, Fujian,
Central and Western Region: Other Provinces in PRC Mainland
Central China –Shangxi, Henan, Anhui,Hubei, Jiangxi, Hunan
PRC PV Registration Composition by Region
In recent years, basic sedan continues to be the major growth driver for the fast growth of PV sales. In 2008, sales proportion of sedan reached 74.7%, which was in line with the sedan growth rate in 2007 and growing by 4.5% compared with that in 2005. Meanwhile, due to increased demand for individualized consumption, SUV sales proportion grew to 6.63% in 2008, increased 1% YoY.
Eastern regions are still the major consumption market for PV, but consumption share in Mid-western regions is steadily picking up. PV registration in Mid-western regions accounted for 36.4% of total national consumption, growing by 3.6% YoY.
Chart3
2005
2005
2005
2005
2006
2006
2006
2006
2007
2007
2007
2007
2008
2008
2008
2008
Sedan
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
P.*
Unit: 0,000
Rising HDT share in Trucks
In 2008, CV sales in China was 2.652 mn units, representing a 5.25% YoY growth. Slow down of growth rate was mainly caused by macro-economy slow down and implementation of new emission standard.
In recent years, sales proportion of HDT maintains a steady growing momentum, reaching 23.6% in 2008, representing 0.9% YoY growth.
Chart1
2005
2005
2005
2005
2006
2006
2006
2006
2007
2007
2007
2007
2008
2008
2008
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2008
2008
2005
2006
2007
2008
2005
2006
2007
2008
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
0
0
0
0
0
0
0
0
&A
0.1561264822
0.1277997365
0.5625823452
0.1534914361
0.1753283838
0.1153626499
0.5431182182
0.1661907481
0.2275058275
0.1104895105
0.5151515152
0.1468531469
0.2364273205
0.0906304729
0.5148861646
0.158056042
Chart4
2005
2006
2007
2008
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
DFG Business Overview
Next , let me brief you on the business performance of DFG.
P.*
Market Share Steadily Increases
Unit0000
DFG :
Unit:0,000
Ever since its listing, DFG has been a consistent outperformer in PRC auto industry. It is well positioned to resist cyclical downward risk because of its multi-strategic-partnership business model. DFG realized a sales volume of 1mn58,000 units, representing a growth of 11.42%, which was 4.7% higher than industry average growth.
DFG’s market share also rose steadily in the past few years. Its market share in 2008 was 11.3%%, increased 1% compared with that in 2005.
Among the Group’s 2008 PV sales, Japanese vehicles sold 514,500 units, which further drove its sales proportion in DFG to 70.77%
Chart8
2005
2006
2007
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
5357170.64%10.19%
7329120.59%9.39%
9210180.37%6.00%
08
08
2008
2008
2008
2008
2008
21643
0.39%
6.17%
9
12490
0.22%
3.56%
Sheet2
2008
350520
100.00%
2
0.00%
2
0.00%
14839
4.23%
68979
19.68%
68214
19.46%
53224
15.18%
3797
1.08%
69992
19.97%
23772
6.78%
43533
12.42%
4166
1.19%
Sheet3
P.*
Unit:0,000
Qashqai
2.4
Remarkable Performance of New PV Models
The Group’s PV business achieved strong growth in the past few years. PV sales was 727,000 units, increased by 14.01% YoY, which was 6.7% higher than PV industry average growth. Aggregate PV sales of the Group ranked NO.3 in PRC PV industry, with a PV market share of 10.8% in 2008, increased by 2% compared with that in 2005.
Fast growth of the Group’s PV business benefits from its extensive product mix and continuous flow of new models across all different PV segments from its JV partners. By the end of 2008, the Group had a wide coverage of 24 PV models. In 2008, the Group launched 7 new models to PRC market. In March, DF Nissan launched Qashqai, which achieved an annual sales of 24,000 units. In April, DPCA launched new Elysee, which saw an annual sales of 46,800 units in 2008. In June, new Teana was launched which sold 44,000 units in half year period. These newly launched models all achieved remarkable sales while at the same time, existing models also achieved good sales. Take DF Honda CRV as an example, since its launch in 2004 to Feb of 2009, aggregate sales exceeded 200,000 units. CRV March sales of 8479 units set a new monthly high for SUV sales in China, which further consolidated its dominating position in PRC SUV market.
Among the Group’s 2008 PV sales, Japanese vehicles sold 514,500 units, which further drove its sales proportion in DFG to 70.77%
Chart9
2005
2005
2006
2006
2007
2007
2008
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
Good Performance in Sub-segments
Strong Performance of Kinland
Dongfeng Kinland HDT was launched in May,2006. Sales volume reached 22,000 units in 2007 and exceeded 40,000 units in 2008. Other CV models such as Tianjin and Chenglong are all well received in the market.
Steady Growth of HDT and MDT Sales Volume
Unit:0,000
Unit:0,000
Unit:0,000
The Group’s CV business also grew steadily in the past few years. In 2008, CV sales was 331,000 units, among which HD and MD trucks sold 155,000 units, increased 27,000 units that of 2005.
The Group’s competitive edge in its HD and MD truck segment results from launching upgraded products to improve its product mix and respond to market demand. Sales of HD product Kinland in 2008 exceeded 40,000 units. MDT launched brand new product Tianjin to upgrade its product structure.
The Group’s LCV market share also increased constantly in recent years, with a sales volume of 131,000 units and a 11.1% market share, representing a 1.4% market share growth compared with that in 2005.
Chart13
2005
2006
2007
2008
12.8
11.7
15.2
15.5
Sheet1
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
Sheet1
2005
2005
2006
2006
2007
2007
2008
2008
PV
CV
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
58
2.5
12.16
1.4L
1.6L
>1.8L
proportion
12.8
11.7
15.2
15.5
Chart1
2007
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
Market Share
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
8.3
10.1
11.7
13.1
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
Market Share
DFG :Constant Upgrading and Expansion of Sales Network Utilization Rate Maintains at a Comparatively High Level
Comparatively High Level of Utilization Rate
Constant Effort in Network Construction
Unit:0,000
Unit:0,000
5357170.64%10.19%
7329120.59%9.39%
9210180.37%6.00%
08
08
2008
2008
2008
2008
2008
21643
0.39%
6.17%
9
12490
0.22%
3.56%
Sheet2
2008
350520
100.00%
2
0.00%
2
0.00%
14839
4.23%
68979
19.68%
68214
19.46%
53224
15.18%
3797
1.08%
69992
19.97%
23772
6.78%
43533
12.42%
4166
1.19%
Sheet3
Chart2
2004
2004
2004
2005
2005
2005
2006
2006
2006
2007
2007
2007
2008
2008
2008
5357170.64%10.19%
7329120.59%9.39%
9210180.37%6.00%
08
08
2008
2008
2008
2008
2008
21643
0.39%
6.17%
9
12490
0.22%
3.56%
Sheet2
2008
350520
100.00%
2
0.00%
2
0.00%
14839
4.23%
68979
19.68%
68214
19.46%
53224
15.18%
3797
1.08%
69992
19.97%
23772
6.78%
43533
12.42%
4166
1.19%
Sheet3
P.*
Strong Revenue Growth
Unit:RMB mn
PV Revenue
CV Revenue
Unit:RMB mn
Unit:RMB mn
Unit:RMB mn
The Group’s sales revenue maintained strong growth momentum with a sales revenue of 70.569 bn in 2008, growing 19% YOY.
Benefiting from fast sales growth, continuous improvement of product mix and outstanding performance of its new products, PV achieved a revenue of 48.66 bn, representing a 16.8% YoY growth.
Benefiting from the rising HDT sales contribution, CV sales revenue in 2008 reached 20.98bn, growing 24.1% YOY.
Chart4
2007
2008
Revenue
59318
70569
Sheet1
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
58
2.5
12.16
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
0
0
0
0
0
0
0
0
&A
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
58
2.5
12.16
0
0
0
proportion
0
0
0
0
2005
2005
2006
2006
2007
2007
2008
2008
&A
LD truck market share
33
817.2
618.9
339
0
0
0
0
0
0
0
0
&A
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
58
2.5
12.16
0
0
0
proportion
0
0
0
0
2005
2005
2006
2006
2007
2007
2008
2008
&A
LD truck market share
33
817.2
618.9
339
2005
2005
2006
2006
2007
2007
2008
2008
&A
DFG: Constant Improvement of Profitability Driven by Improved Product Mix
Unit:RMB mn
Unit:RMB mn
Unit:RMB mn
Unit:RMB mn
EBIT and EBIT Rate
ROERecurring
DFG’s recorded a significant higher sales growth than industry average, which enables the Group to enjoy a scale of economy. Product structure adjustment has achieved effective results, with increased sales of high added value products in its product mix. The Group spared no efforts to reduce cost through continuous improvement of its localization rate. Benefiting from all these efforts, the Group’s profitability has been constantly rising.
In recent years, the Group also saw a fast growth of its gross profit, along with an increased gross margin. In 2008, the Group’s gross profit amounted to 11.881 bn ,growing 21% compared with 2007. Gross margin was 16.8%, increased 0.3% YoY, and was 2.2% higher than 2005. Among which, PV gross margin was 19%, increased 0.7% compared with 2007. CV gross margin was 11.6% in 2008, dropped by 0.4% compared with 2007 due to a sharp market contraction in 2H of 2008.
In 2008, the Group’s EBIT amounted to 5.19 bn, growing 25.7% compared with the same period in 2007. EBIT margin in 2008 was 7.4%, improved 0.4% compared with 2007.
In 2008, the Group’s net profit was 4.04bn, increased by 7.2% compared with 2007. If the one-off deferred tax rebate of 520mn in 2007 is excluded, recurring net profit grew by 24.3%. Net profit margin was 5.7% in 2008, growing by 0.2% compared with that in 2007.
The Group’s ROE in 2008 was 20.7%, increased by 2.4% compared with 18.3% ROE in 2007.
Chart2
2005
2005
2006
2006
2007
2007
2008
2008
Liability-to-Asset Ratio
Unit: Day
The Group further improved its financial structure in 2008, with enhanced debt payment capability. By the end of 2008, the Group’s liability-to-asset ratio decreased from 60.9% in 2007 to 59.5% in 2008.EBIT Interest coverage ratio increased from 11.3% in 2007 to 13.2% in 2008. Its debt to capital ratio dropped from 28.8% in 2007 to 26.4% in 2008.
In 2008, the Group further enhanced its operating efficiency. Its accounts receivable turnover days decreased to 18 days in 2008 compared with the same period in 2007, which effectively reduced occupancy of its working capital.
Chart3
2007
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
0
0
0
0
0
0
0
0
&A
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
0
0
0
0
0
0
0
0
&A
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
0
0
0
0
0
0
0
0
&A
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
0
0
0
0
0
0
0
0
&A
63
45
P.*
DFG: Significant Increase of Cash Flow from Operation, Return Value to Investors through Stable Dividend Policy
Unit:RMB mn
Unit:RMB mn
Unit:RMB mn
Unit:RMB mn
The Group’s cash flow from operation reached 7.748bn, thanks to improved account receivable management. Net cut of account receivable in 2008 was 4.5bn. The Group’s cash flow increased 2.646 bn compared with that of 2007 due to such factors as increased profit before tax.
DFG has adopted a steady dividend payment policy to return value to its shareholders. From 2006-2008, the Group’s net profit was 2.081bn, 3.77 bn and 4.04bn respectively. Aggregate dividend payment amounted to 1.121bn.
Chart1
2007
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2008
2008
2005
2006
2007
2008
2005
2006
2007
2008
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
58
2.5
12.16
1.4L
1.6L
>1.8L
proportion
12.8
11.7
15.2
15.5
2005
2005
2006
2006
2007
2007
2008
2008
&A
LD truck market share
33
817.2
618.9
339
2005
2005
2006
2006
2007
2007
2008
2008
&A
0.1561264822
0.1277997365
0.5625823452
0.1534914361
0.1753283838
0.1153626499
0.5431182182
0.1661907481
0.2275058275
0.1104895105
0.5151515152
0.1468531469
0.2364273205
0.0906304729
0.5148861646
0.158056042
2007
2008
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2008
2008
2005
2006
2007
2008
2005
2006
2007
2008
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
58
2.5
12.16
1.4L
1.6L
>1.8L
proportion
12.8
11.7
15.2
15.5
2005
2005
2006
2006
2007
2007
2008
2008
&A
LD truck market share
33
817.2
618.9
339
2005
2005
2006
2006
2007
2007
2008
2008
&A
0.1561264822
0.1277997365
0.5625823452
0.1534914361
0.1753283838
0.1153626499
0.5431182182
0.1661907481
0.2275058275
0.1104895105
0.5151515152
0.1468531469
0.2364273205
0.0906304729
0.5148861646
0.158056042
Followed is DFG’s financial performance.
P.*
Growth Prospect for PRC Auto Industry in 2009
Unit:0,000
Auto Sales Volume Growth in Major Auto Markets
Looking into the future, we still see a large growth potential for PRC auto industry due to the continuous development of China’s economy and a comparatively lower PV penetration rate( 33 units for 1000 people in 2007).So we see great growth potential for auto development in China.
Chinese economy is negatively impacted by global economic crisis, but the government recently released a series of policies to revive auto industry and stimulate auto sales. Coupled with the 4tn government investment, we believe all these measures will gradually take effect. According to statistics released by CAAC, 1Q PRC auto sales totalled 2,678,800 units, growing 3.9% YoY, and growing 24.51% QoQ. What’s more, PRC auto sales volume exceeded US for the first time in history to make it become the largest auto consumption market in the world. From an optimistic point of view, we think PRC auto industry will cross the sales threshold of 10 mn units, realizing a 10% growth rate.
Chart1
2005
2006
2007
2008
2009E
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
American
Japan
Kerea
33
817.2
618.9
339
2005
2006
2007
2008
0
0
0
0
0
0
0
0
Sheet2
0
0
0
0
0
0
0
0
&A
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
0
0
0
0
0
0
0
0
&A
23
878
758
656
Sheet1
2005
2006
2007
2008
PV
397.1
517.6
629.8
675.6
2005
2006
2007
2008
2005
2006
2007
2008
sales volume
2005
2006
2007
2008
12.8
11.7
15.2
15.5
2005
2006
2007
2008
8.3
10.1
11.7
13.1
China
USA
Japan
23
878
758
656
Sheet1
2005
2005
2006
2006
2007
2007
2008
2008
PV
CV
397.1
178.7
517.6
204
629.8
249.4
675.6
262.5
Sheet2
2005
2005
2006
2006
2007
2007
2008
2008
&A
58
2.5
12.16
0
0
0
proportion
0
0
0
0
0
0
0
0
0
0
0
0
&A
LD truck market share
Chart1
China
China
Japan
Japan
5357170.64%10.19%
7329120.59%9.39%
9210180.37%6.00%
08
08
2008
2008
2008
2008
2008
21643
0.39%
6.17%
9
12490
0.22%
3.56%
Sheet2
2008
350520
100.00%
2
0.00%
2
0.00%
14839
4.23%
68979
19.68%
68214
19.46%
53224
15.18%
3797
1.08%
69992
19.97%
23772
6.78%
43533
12.42%
4166
1.19%
Sheet3
P.*
C-Quatre Sedan
Hatchback 207
PSA Peugeot Citroën
Benefiting from the government’s stimulus package to boost domestic demand, and coupled with DFG’s distinctive competitive edge, 1Q sales was 264,700 unit, increased by 8.86% compared with the 4Q of 2008. Among this, PV sold 198,300 units, growing by 5.47% compared with 4Q 2008. CV sold 664,000 units, growing by 20.41% QoQ..
Based on the most difficult scenario in PRC auto industry in 2009, we made our business plan for 2009. We aim to achieve better performance and improved management through continuous improvement of the weak links in the Group’s operation and to turn challenge into opportunities.
The Group plans to launch 7 new PV models in 2009. DF Nissan JV will launch new Sylphy. DPCA will launch C-Quartre sedan, hatch-back 207, hatch-back Elysee and C5. DF Honda plans to launch new model Civic and a brand new medium-high sedan.
Sales target for DF Nissan is 388,000 units; DPCA is 210,000 units; DF Honda plans to sell 185,000 units.
In 2009, DFG will continue to optimize its product structure to further improve its competitive edge and maintain a sustainable development. We aim to achieve a higher-than-industry average growth rate and a PRC leading profitability.
P.*
P.*
Tel: +8627 8428 5031
Fax: +8627 8428 5057
16,901
20,980
0
5000
10000
15000
20000
25000
20072008
36.6
31.9
58.2
53.7
46.9
51.6
43.3
41.89
49.61
45.19
55.14
62.39
53.01
47.99
72.15
67.29
56.75
55.76
46.71
52.81
63.5
57.63
68.9
75.86
71.71
55.34
84.72
80.87
71.36
72.69
64.09
67.16
77.28
69.23
80.09
83.93
85.94
66.35
105.66
92.26
83.5583.68
20
30
40
50
60
70
80
90
100
110
123456789101112
2005200620072008
12.8
11.7
15.2
15.5
0
5
10
15
20
2005200620072008
576
622
879
938
1,000
0
200
400
600
800
1000
1200
20052006200720082009E
2.2
4.01
0
1
2
3
4
5
20072008
345
388388
320
330
340
350
360
370
380
390
400
200620072008E
28.8%
26.4%
25.0%
25.5%
26.0%
26.5%
27.0%
27.5%
28.0%
28.5%
29.0%
20072008
60.9%
59.5%
58.5%
59.0%
59.5%
60.0%
60.5%
61.0%
61.5%
20072008
