Seven years ago, investors worried about the falling share price of SAIC Motor, and the then chairman helplessly asked, "What do you suggest we do?" Today, this problem continues to trouble investors. The former automotive "top player" is making a comeback. Entering 2026, SAIC Motor (600104.SH) has been receiving a steady stream of good news. First came a sales turnaround, with last year's wholesale vehicle sales reaching 4.5075 million units, a year-on-year increase of approximately 12.3%. This sales figure is only about 100,000 units shy of the "newly crowned" champion, BYD Company Limited. Subsequently, SAIC Motor released a stunning performance forecast, estimating last year's net profit attributable to shareholders to be between 9 and 11 billion yuan, a staggering increase of 438% to 558% year-on-year. However, the stock price surprisingly fell afterwards and only experienced minor fluctuations in the following days. In 2024, SAIC Motor's profitability declined sharply, with net profit attributable to shareholders dropping to less than 1.7 billion yuan. Furthermore, the sales champion title it had held for 18 years was snatched away by BYD Company Limited. One year later, SAIC Motor showed strong signs of a king's return. Yet, the capital market showed no jubilation. After the pre-announcement of profit growth was released, SAIC Motor's stock price instead declined and remained sluggish for several days thereafter. Eight years ago, SAIC Motor's market capitalization once peaked at nearly 440 billion yuan. In the years since, it has struggled to exceed 300 billion yuan at its highest, and now hovers around 170 billion yuan, having evaporated approximately 270 billion yuan compared to its peak. Even skyrocketing profits have left the stock price unmoved. Can SAIC Motor recoup the market value that has "disappeared" over these years?
How Substantial is the Surge in Profits? Judging solely by profits, SAIC's comeback victory is not entirely convincing. In 2024, SAIC Motor's net profit attributable to shareholders was 1.666 billion yuan, a sharp decrease of over 80% year-on-year, while its non-GAAP net profit actually showed a loss of approximately 5.4 billion yuan. Superficially, the decline in profitability was cause for concern.
However, the sharp drop in net profit was actually related to several factors. That year, SAIC Motor's subsidiary, SAIC General Motors, and its subsidiaries, made provisions for related asset impairments, which reduced net profit attributable to shareholders by about 7.87 billion yuan. It is precisely this low base that makes SAIC's profits from the previous year appear so "impressive." Furthermore, another important factor inflated SAIC's net profit figure. In 2017, SAIC Motor fully established its Indian subsidiary, MG Motor India. By 2024, SAIC introduced investors including India's JSW Group, reducing its stake to 49%. The proceeds from this transaction boosted SAIC's net profit by 5.178 billion yuan. However, some analysts believe that because SAIC Motor's stake in the Indian company fell to 49%, the accounting method shifted from the "cost method" to the "equity method" for consolidation purposes. Consequently, the Indian company's accumulated profits could suddenly be fully recognized as current period profit. Therefore, this sum of over 5 billion yuan constitutes a "book realization of accumulated profits," rather than newly generated cash income in the current period. This likely leads the capital market to find it difficult to maintain an optimistic view of SAIC Motor's substantial profit increase. Scrutinizing SAIC Motor's core business capabilities, the profit growth also appears somewhat lackluster. It is well known that SAIC Motor relied heavily on its three major joint venture brands to maintain its "top player" position for over a decade. In 2016, these three brands contributed 72% to total revenue. In recent years, against the backdrop of increasing penetration of new energy vehicles (NEVs), the domestic fuel vehicle market has gradually shrunk, but it is undeniable that fuel vehicles remain an important source of profit. For comparison, while SAIC Motor's NEV sales have been continuously rising, they have not led to a significant improvement in revenue and profits. According to calculations by economist Ren Zeping, in 2023, BYD Company Limited sold 3.02 million NEVs, generating revenue exceeding 460 billion yuan, with an average selling price per vehicle of 153,000 yuan. In contrast, SAIC achieved 83.3 billion yuan in revenue from 1.123 million NEVs sold, averaging only 74,100 yuan per NEV. Two years later, this situation has not improved significantly. In 2025, SAIC Motor's NEV sales increased to 1.643 million units. Among these, SAIC-GM-Wuling's NEV sales exceeded one million units, a large portion of which relied on the Hongguang MINIEV. This pure electric model has consistently seen strong sales, but its price is only just over 30,000 yuan, resulting in very low profit margins. Consequently, although the sales proportion of SAIC Volkswagen, SAIC General Motors, and SAIC-GM-Wuling is declining, they remain crucial sources of revenue and profit for SAIC. In 2024, when SAIC Motor's net profit attributable to shareholders was less than 1.7 billion yuan, SAIC Volkswagen still contributed a profit of 4.74 billion yuan. However, that year, SAIC General Motors incurred huge losses of over 26 billion yuan, severely dragging down SAIC's overall profitability. Therefore, the ongoing decline in the sales share of joint venture brands will, at least in the short term, negatively impact SAIC Motor's ability to generate profits.
The Stock Price Struggles to Gain Traction After descending from its peak, it has become truly difficult for SAIC Motor's stock price to create history again. In 2018, the Chinese automotive industry was generally sluggish, yet SAIC Motor achieved sales exceeding 7.05 million vehicles and realized revenue of over 900 billion yuan. It was also in March of that year that SAIC Motor's market capitalization peaked at 439.9 billion yuan, while the current "new king," BYD Company Limited, had a market cap of only 180 billion yuan at the time.
But SAIC Motor's stock price retreated step by step thereafter. By May 2019, in just over a year, its market capitalization had evaporated by approximately 160 billion yuan. At SAIC Motor's shareholder meeting at that time, investors were very concerned about the continuously declining stock price and demanded solutions from management. The then chairman, Chen Hong, also expressed helplessness, stating, "We also hope shareholders can give us some ideas. What do you suggest we do about this stock price?" All these years later, SAIC Motor's management still hasn't found a good way to boost the stock price. Wind data shows that in 2025, even as SAIC Motor's performance "recovered," and it briefly surpassed BYD Company Limited's sales in March and September, its stock price still accumulated a decline of 26.37% for the year. As of January 22nd, SAIC Motor's closing price was approximately 14.96 yuan per share, with a market cap of around 172 billion yuan, having evaporated nearly 270 billion yuan compared to its peak. What is even more dissatisfying for investors is that while the sales gap with BYD Company Limited is not vast, SAIC Motor's market capitalization has been left far behind. As of now, BYD Company Limited's market capitalization exceeds 850 billion yuan. Unable to catch up with BYD Company Limited, it seems equally challenging for SAIC Motor to recover the over 200 billion yuan in evaporated value. SAIC Motor's stock price has been in a prolonged state of trading below net asset value (P/B < 1), meaning its closing price has been consistently lower than its net asset value per share. According to China Fund News, the two A-share listed automakers that have been trading below book value for a long time are SAIC Motor and GAC Group. Furthermore, according to the "Listed Company Regulatory Guideline No. 10 — Market Value Management" issued by the China Securities Regulatory Commission (CSRC), companies trading below book value for an extended period should disclose plans to enhance their valuation. In April of last year, SAIC Motor did release a valuation enhancement plan, stating it would "strive to improve the performance level of the company's market value management." But it appears the results have been poor so far. What makes investors even more resentful is the retreat of major shareholders. In May 2021, SAIC Motor's controlling shareholder, Shanghai Automotive Industry Corporation (Group) [SAIC Group], transferred 413.9 million shares (representing 3.58% of total shares) free of charge to Shanghai International Group. SAIC Motor's ultimate controller is the Shanghai State-owned Assets Supervision and Administration Commission (SASAC), which also fully controls Shanghai International Group. After receiving the freely transferred shares, Shanghai International Group began continuously selling SAIC's stock. By the interim report of 2025, Shanghai International Group still held a 2.41% stake. However, by the third quarter, it had disappeared from SAIC Motor's top ten circulating shareholders list; the tenth largest circulating shareholder currently holds a 0.5% stake. During the period of Shanghai International Group's share reduction, SAIC Motor's stock price remained below net asset value. This type of selling behavior by a "controlling shareholder affiliate" could, to some extent, affect market confidence. How is SAIC Motor supposed to compete effectively in boosting its stock price under these circumstances?
A New Narrative is Needed Judging from last year's sales and performance, SAIC Motor's stock price is not without hope for a significant rally. A research report released by Galaxy Securities in the second half of last year suggested that, considering both absolute and relative valuation methods, SAIC Motor's reasonable value per share range is 23.54 - 27.86 yuan, corresponding to a market capitalization of 270.746 billion - 320.273 billion yuan. As an established automaker and former industry leader, SAIC Motor reacted swiftly when experiencing its低谷 (low point) in 2024. In July 2024, Wang Xiaoqiu succeeded Chen Hong as chairman, and Jia Jianxu took over as president. A few months later, Jia Jianxu stated at an internal meeting: "We must learn to kneel while conducting ourselves, to be low-profile in person but high-profile in work. Only when you kneel down will others not know how tall you are. When you stand up one day, you will truly become a giant." After a major management reshuffle, forming three strategic pillars focusing on proprietary brands, new energy vehicles, and overseas markets, and after a year of hard work, SAIC Motor climbed out of its trough.
Data shows that its estimated non-GAAP net profit for 2025 is 7 - 8.2 billion yuan. Compared to the significant loss of the previous year, SAIC Motor's core business profitability has indeed strengthened considerably. It is worth mentioning that sales of SAIC Motor's proprietary brands reached 2.928 million vehicles, a year-on-year increase of 21.6%, accounting for 65% of total sales. Against the backdrop of a gradually shrinking fuel vehicle market and the weak NEV transformation of joint ventures, SAIC Motor's strategy of expanding its proprietary brands has begun to bear fruit. Furthermore, SAIC Motor's NEV sales reached 1.643 million units last year, an increase of over 30% year-on-year. In the fiercely contested overseas market, SAIC Motor achieved sales of 1.07 million vehicles. But for SAIC Motor's sustained performance growth to translate into bullish sentiment in the capital market, a more robust narrative is required. Beyond maintaining the profitability of its joint venture brands, SAIC Motor needs to urgently address the短板 (shortcomings) in its NEV business. Currently, telling a compelling NEV story does not appear easy. In 2021, SAIC Motor invested 7 billion yuan heavily in Feifan Auto, aiming to expand into the mid-to-high-end intelligent EV market. However, it failed to meet its first-year sales target of 30,000 units. By 2024, its average monthly sales were less than 600 units, and last year, it almost vanished from the market conversation. Some industry insiders analyze that Feifan's predicament may partly stem from internal competition with its sibling brand, IM Motors. In 2020, SAIC Motor jointly established IM Motors with Zhangjiang Hi-Tech and Alibaba, also focusing on the high-end market, with an investment exceeding 10 billion yuan. It was internally referred to as the "Number One Project," indicating its high level of importance. But IM Motors also had a slow start in terms of sales, selling approximately 81,000 units in 2025. While it has achieved consecutive quarters of deliveries exceeding 10,000 units recently and reached monthly profitability, facing the intense competition in the high-end NEV market, achieving scaled profitability remains a significant challenge for IM Motors. Now, many pin their hopes for SAIC's fight in the NEV market on two new models from the Rising Auto brand set to launch this year. The Rising Auto Z7 is即将上市 (soon to be launched). Positioned in the 200,000-300,000 yuan price range with a design highly reminiscent of classic Porsche models, it is seen by outsiders as a direct competitor to the Xiaomi SU7. The other new model, the Rising Auto H7, is positioned above the first model, the Rising Auto H5, with a potential price above 300,000 yuan. With the Rising Auto H5 experiencing weak sales, whether the new models can carve out a path in the fiercely competitive "red ocean" market remains uncertain. Having staged a remarkable comeback within a year, SAIC Motor still retains the bearing of its former王者 (kingly) stature. But to regain its past glory on the new battlegrounds, tough battles still lie ahead.
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