Nissan Mask 50 Million BYD Electronics, 12 Billion 750 Million Of The Medical Contract.

BYD Electronics (International) Co., Ltd. (hereinafter referred to as BYD Electronics) issued a notice on May 26th that public health incidents continued to spread rapidly throughout the world, and the demand for masks at home and abroad was not expected to surge, resulting in an expected amount of turnover under the supply framework agreement would be higher than the current annual cap of 1 billion 200 million yuan. On the same day, BYD and its controlling shareholder entered into supplementary agreements to expand the types of masks to be supplied, to amend the existing annual cap and to amend the terms of payment. The company proposes to amend the existing annual cap to RMB 12 billion 750 million yuan.

According to the financial report, in the first quarter of 2020, BYD electronics achieved a turnover of RMB 8 billion 564 million yuan, a decrease of 17.59% compared to the same period last year, a gross profit of 1 billion 64 million yuan, an increase of 27.08% over the same period last year, and a profit of 657 million yuan for the parent company's equity holders, an increase of 69.44% over the same period last year, and a profit of 0.29 yuan per share.

Here, there are also media reports that the first quarter BYD electronic profit of up to 657 million yuan, at least 269 million yuan profit is due to the production of mask products, which shows that in just two months, BYD earned nearly 270 million yuan profit because of selling masks, while BYD sold only 113 million yuan in the first quarter of 2020, which shows that the mask business is more than selling steam. Cars make more money.

BYD electronics expects that the profit attributable to shareholders of the company will be increased by no less than 280% in the first half of June 30, 2020, compared with the 6 months ending June 30, 2019 (up to June 30, 2019 6 months: the profit attributable to shareholders of the company is RMB 575 million yuan).

BYD Electronics Board believes that the profit growth is mainly due to the group's continuous increase in the share of key customers, pushing the business scale to expand significantly. At the same time, the introduction of new spare parts project results show that shipments of products such as glassware and ceramics are growing rapidly, profitability is expected to increase significantly in the second quarter, and the operating profit margin has been greatly improved. In addition, the group's mask production is expected to contribute positively to the group's sales revenue and earnings growth.

According to public information, Li Wei, director general of BYD office and Secretary General of BYD charity foundation, revealed that at present, the daily output of BYD masks is 50 million, and it is still expanding at 1 million to 3 million per day. It is expected that in May, there will be more than 1 billion export masks from BYD.

Observation, the speed of BYD masks is amazing: in January 31st decided to switch production, started to move in February 10th, February 17th masks mass production, March 12 daily output reached 5 million, 12 days later increased to 10 million, in April April climbed to 20 million, ranking the world's first production capacity!

Zheng Yufei, an analyst at Guoxin Securities, said in February that after the outbreak of the epidemic, medical supplies in most parts of the country were in short supply. BYD's R & D team quickly laid out the production line, and the products such as mask, disinfectant and other products highlighted the company's sense of social responsibility. Masks sales are expected to generate 2-7 billion new revenue and a thickening company's net profit of 2%-5%. Along with the shortage of domestic masks, the price of manufacturers is about 0.5-1.8 yuan per unit. It is expected that BYD electronic masks will be full 1-3 months, which is expected to bring 2-7 billion new revenue. Masks, disinfectants and other products have higher gross margins, and some masks are even more than 50% gross margins. BYD electronics's sales of medical devices are expected to bring tangible benefits to the company.

According to the insiders, BYD electronics has a gross margin of 12.4% in the first quarter, a significant improvement over the 4 quarter of last year. On the one hand, the low margin business of the gross margin and the high margin structure business are the same. On the other hand, the gross margin of the mask business is higher than the gross profit margin of the company in the first quarter of 4. Despite the fact that the price of masks is relatively high, with the increase in the proportion of masks exported by BYD electronics in the two quarter, the price is more flexible and higher gross margin is expected to be maintained.

Yang Sen, a researcher at the state Yuan International Holdings, judged that the mask business had made two contributions to BYD Electronics: first, the revenue of the mask business was considerable and the gross profit margin was high; two, the mask business shared the main labor cost and the fixed cost of the main industry, which was conducive to the improvement of the gross margin level of the whole company, thanks to the fact that the BYD electronic mask product had obtained the overseas Multi Country (US, Japan) authentication, the brand endorsement. The ability of the global masks is still strong in the visible future, and BYD electronics is expected to continue to benefit from it.