BAIC ACHIEVED REVENUE OF RMB83.7 BILLION IN THE FIRST HALF OF 2022, CASH FLOW FROM OPERATING ACTIVITIES UP 112.7% YEAR ON YEAR

On August 29, BAIC Motor (hereafter referred to as BAIC, 01958. HK) released its performance report for the first half year of 2022. It showed that in the first half of the year, BAIC achieved revenue of RMB 83.679 billion; net profit attributable to equity holders of the company exceeded RMB 2.16 billion; and net cash generated from operating activities totaled RMB 9.0585 billion, an increase of 112.7% year on year.

According to the National Bureau of Statistics, in the first half of 2022, China's gross domestic product grew by 2.5% year on year. Due to the impact of the epidemic and the complicated international situation, the downward pressure on the economy has increased significantly. The passenger car market as a whole showed a "U-shaped" trend, with production and sales falling precipitously in April, followed by a gradual rebound under the impetus of such policies as the halving of purchase tax. Given the multiple factors such as the large-scale outbreak of the epidemic, continuous shortage of chips and rising prices of raw materials, BAIC took the initiative to cope with the challenges by ensuring supply, boosting production and promoting sales to actively move the work forward. As a result, BAIC achieved a good operation performance in the first half of 2022.

Four brands developed steadily and the overall business achieved progress while maintaining stability

In the first half of 2022, the four brands of BAIC made different progress.

The Beijing brand, as the independent segment of BAIC, reported a better performance in the export market and pure electric models year on year in the first half. In terms of sales service, some image stores of the Beijing brand have completed store upgrades, improving the terminal environment and laying a foundation for brand image enhancement. As for R&D, the Beijing brand has continuously promoted the innovation of R&D system, consolidated the research in the basic field of the whole vehicle, focused on "intelligent network connectivity" and "electrification", and combined independent innovation and strategic cooperation, in ways that realize the breakthrough of the core technology and core capacity.

As the luxury brand of BAIC, Beijing Benz completed the production of 4 million engines and 4 million vehicles in the first half of the year, with its sales still ranking at the top of domestic luxury brands. Beijing Hyundai also achieved 94,000 wholesale and 109,000 retail in the first half of the year.

Fujian Benz achieved 16,000 sales in the first half of the year. In July, Fujian Benz sales increased 84.5% year on year. At present, the sales of the Mercedes-Benz V-Class and the New Vito products manufactured by Fujian Benz have maintained the leading position in the field of joint venture luxury commercial vehicles.

Accelerating transformation and upgrading, optimizing industrial layout, and building advantages with steady steps

China's automobile market in the second half of 2022 will continue to face the challenges of supply shortage and the complex international situation. At the same time, due to changes in demand led by the innovation of the auto industry and adjustments in consumption trends, there will be more fierce competition in China's auto industry, and all car companies are facing severe multiple challenges.

In the second half of the year, BAIC will accelerate its transformation and upgrading, optimize its industrial layout, promote product iterations and enhance its operational capabilities.

The Beijing brand is transforming to "electrification, intelligence and network connectivity" at an accelerated pace. In April 2021, the Beijing brand released the BAIC dynamic route covering three directions: fuel, hybrid and pure electric drive, the @me intelligent platform technology route and the 3.0 era product planning of "defining demand by scenario". BAIC will build three platforms: SUPER power, HEV hybrid and EV electric, with "scenario-based cabin + Telematics + autonomous driving" as the core transformation direction. In July, the first model of the 3.0 era, X55 II was officially launched, bringing users a new intelligent travel experience in all scenarios. In the second half of the year, The Beijing brand will focus on its goal, make clear the product planning and the technical route featuring "new energy in an all-round way", and meet the challenges with innovative products, new routes and future planning. We will continue to increase supply, stabilize market delivery, and raise terminal sales by focusing on new products, new energy, and the international market.

In addition to actively laying out new fields and enhancing the core competitiveness of its products, BAIC is also safeguarding the operation of healthy cash flow. Net cash generated from operating activities of BAIC in the first half of the year rose from RMB4,259.5 million in the first half of 2021 to RMB9,058.5 million in the first half of 2022, up 112.7% year on year, securing the Group's steady steps forward in the second half of the year.

Thanks to stable operations and active layout in the first half of 2022, BAIC has achieved continued improvement in the independent segment and steady development in the joint venture segment, with upward momentum in the overall development. With the easing of the epidemic in the second half of the year and the implementation of various stimulus policies, it can be expected that the second half of the year will witness a new round of development for BAIC.