On the evening of April 28, BYD released its financial report for the first quarter of 2020, which showed that operating income in the first quarter was approximately 19.679 billion, a decrease of 35.06% year-on-year; the net profit attributable to shareholders of listed companies in the first quarter was approximately 113 million, a year-on-year decrease of Reduced by 84.98.

It is worth noting that BYD’s net profit excluding non-recurring gains and losses in the first quarter was -471.7 million, which means it lost more than 400 million. The financial report shows that BYD received 533 million yuan in automobile-related government subsidies in the first quarter. In other words, without car subsidies, BYD would have lost money in the first quarter.

However, in its first-quarter financial report, BYD predicted that its net profit would reach 1.45 billion yuan in the first half of this year. In addition to the improvement in the business of each segment, the reason for the change in performance is that "mask production is also expected to provide a positive contribution to the group's sales revenue and profit growth."

“The mask business is a dark horse,” said an investor. Because BYD Electronics also released a financial report on the evening of April 28, showing a profit of 657 million yuan in the first quarter, a year-on-year increase of 69.44. Profit in the first half of the year is expected to increase by 2.8 times year-on-year (profit in the same period last year was 575 million yuan).

That is, BYD Electronics’ profit in the second quarter will be no less than 1.528 billion. BYD's net profit last year was 1.6 billion, and its profit in the first half of this year will exceed last year's full profit by 36 billion. Investors said that "the mask business has contributed a lot".

Indeed, the BYD brand model DG3101 KN95 mask of BYD Precision Manufacturing Co., Ltd., a subsidiary of BYD Electronics registered in Hong Kong, was approved by the US FDA in early April.

In addition, in early April, the US state of California spent nearly US$1 billion (approximately 7 billion yuan) to purchase 200 million masks per month from an American subsidiary of BYD until the end of June. Moreover, the state of California has paid the first payment of US$495 million to BYD's subsidiary. At the same time, BYD has cooperated with Japan's SoftBank Group to produce masks and will supply 300 million masks to Japan every month starting in May.

At present, BYD has 300 mask production lines, with a daily output of 20 million. It is also increasing production at a rate of 1 million to 2 million masks per day, becoming the well-deserved "world's largest mask" Producer".

Except for China, the global epidemic has not improved significantly. As the world's largest mask manufacturer, BYD not only assisted various countries with the Chinese medical team, but also began to earn "extra money" through exports after obtaining certification from relevant U.S. agencies. .

At the same time, on April 26, BYD announced the official opening of direct sales channels to sell self-produced masks to consumers in BYD electronic mall.

“Without subsidies, BYD will survive even if new energy car companies die.” said an investor. Obviously, with regard to the better financial expectations in the first half of the year, the benefits brought by the mask business to the group cannot be underestimated.

However, some investors said that "the recent period has been good, but the future is worrying. The mask business cannot be sustained in the long term, and the main business has not improved."

Indeed, if there were not more than 500 million automobile-related Subsidy, BYD's net profit still lost in the first quarter. BYD's cumulative sales from January to March this year were 61,300 units, a year-on-year decrease of 47.9%, and sales were nearly halved. Among them, the sales volume of new energy vehicles was 22,200 units, a year-on-year decrease of 69.67, and the sales volume of new energy vehicles decreased by approximately 2/3. For BYD, a leader in new energy vehicles, such data is indeed difficult to bring profits to the company.

In addition, BYD's 2019 financial report released on the evening of April 21 showed that last year it achieved operating income of 127.7 billion yuan, a year-on-year decrease of 1.78%; net profit was 1.6 billion yuan, a year-on-year decrease of 41.93%. Last year, new car sales were 461,400 units, down 11.39% year-on-year, of which new energy vehicle sales were 229,500 units, down 7.39% year-on-year.

From the data point of view, under the influence of the epidemic, the automobile business in the first quarter of this year was terrible compared to last year.

Although BYD said that the market share of each business segment will increase in the second quarter of this year and the cost of new energy vehicles will further decrease, the automotive business is still BYD's largest business segment.

Last year, BYD’s automobiles and related products accounted for only 49% of its revenue, while in 2018 this business accounted for 59%. Mobile phone parts and assembly services accounted for 43% last year, an increase of 9 percentage points from 34% the year before. In addition, the secondary rechargeable battery and photovoltaic business also increased from 7 in the previous year to 8.

Correspondingly, BYD Auto and its related business revenue last year was 63.266 billion yuan, a year-on-year decrease of 1.676%; mobile phone parts and assembly business revenue was 53.38 billion yuan, a year-on-year increase of 26.40%, and secondary rechargeable batteries And the photovoltaic business revenue in 2019 was 10.506 billion yuan, a year-on-year increase of 17.38%.

Although the proportion of automobile business has declined, it is still the group’s largest business. Compared with other business segments, it is the only segment whose operating income has declined.

In the first quarter of this year, Tesla’s cumulative sales reached 18,600 vehicles, a year-on-year increase of 73%. BYD's new energy vehicle sales in the first quarter were 22,200 units, a year-on-year decrease of 69.67%. Although BYD's sales are still higher than Tesla's, one has surged and the other has fallen sharply, and the gap between the two is narrowing.

The epidemic has made masks and medical supplies a hot commodity. BYD's masks have also received large international orders and have begun to be sold to consumers. The income from masks may make up for certain economic losses for BYD, which has been hit by the epidemic, but it is still difficult to form a long-term and stable source of profits. How to improve the competitiveness of the automotive business and resist competition from brands such as Tesla is BYD's top priority.

This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.