Analysis of SAIC Motor's Rising Share of Self-owned Brands and Improved Profitability

Based on the obtained data and market information, I will prepare a detailed analysis report for you.

Shanghai Automotive Group Co., Ltd. (Stock Code: 600104.SS), a leading enterprise in China’s automotive industry, currently has a market capitalization of approximately USD 175.83 billion and a current share price of USD 15.30. From a valuation perspective, the company’s current price-to-book ratio (P/B) is only 0.59x, and price-to-sales ratio (P/S) is only 0.26x, both significantly lower than the industry average, suggesting that the market’s assessment of the company’s asset quality and revenue-generating capacity is relatively conservative [0].

From a profitability perspective, the company’s return on equity (ROE) is only 0.98%, net profit margin is only 0.43%, and operating profit margin is 1.23% [0]. These data indicate that SAIC Motor’s profitability is at a weak level, with quite limited profit generated per unit of shareholder equity and per unit of revenue. This situation is particularly noteworthy against the backdrop of the traditional automotive industry facing pressure from the new energy transition.

From a technical analysis perspective, SAIC Motor’s share price has recently shown a sideways consolidation pattern. The latest closing price is USD 15.30, and the MACD indicator has issued a death cross signal, indicating bearish short-term momentum; in the KDJ indicator, K is 34.6, D is 29.8, and J is 44.1, which is overall in a neutral range; the RSI indicator is also within the normal fluctuation range. The company’s beta coefficient is 0.5, indicating lower volatility relative to the broader market [0].

From the price range perspective, USD 15.17 is a key support level, and USD 15.47 is a short-term resistance level [0]. The share price has fallen 17.70% cumulatively over the past year and 34.14% over the past five years, indicating pressure on the medium- to long-term trend [0].

2025 is a critical year for SAIC Motor’s strategic transformation. According to the latest disclosed data, the company’s annual sales of self-owned brands reached 2.928 million units, a year-on-year increase of 21.6%, accounting for 65% of total sales [1]. This structural change is a milestone, marking a fundamental shift in SAIC Motor’s growth drivers – from the previous “scale-leading” model relying on joint venture brands to a “quality-leading” model centered on self-owned brands.

Specifically, from January to November 2025, SAIC Motor sold a total of 4.108 million vehicles, a year-on-year increase of 16.4%, exceeding the annual sales target. Among them, sales of self-owned brands reached 2.666 million units, a year-on-year surge of 25.7%, significantly outpacing the overall growth rate [1]. By brand, all self-owned segments including SAIC Passenger Vehicle (including Roewe and MG), SAIC-GM-Wuling, SAIC Maxus, and IM Motors have achieved growth, becoming the absolute main drivers of overall sales growth [1].

From the historical evolution of sales structure, SAIC Motor is undergoing a profound reshaping of its brand landscape. SAIC Volkswagen sold 1.024 million units in 2025, with terminal sales reaching 1.06 million units. Although it is still an important profit contributor, its sales growth rate has slowed significantly. In contrast, the strong growth momentum of self-owned brands is more prominent.

In 2025, SAIC Motor established the “Great Passenger Vehicle Sector Steering Committee” to centrally manage self-owned brands such as Roewe and MG, building a more flexible and efficient operational system [1]. The core purpose of this organizational structure adjustment is to connect the entire chain of product definition, R&D, production, and marketing, eliminating resource waste and management inefficiencies caused by previous fragmented operations of each brand.

In terms of brand layout, SAIC Motor has formed a complete self-owned brand matrix covering different market positions: Roewe and MG are positioned in the mainstream household market, IM Motors focuses on the high-end intelligent electric vehicle market, and SAIC-GM-Wuling focuses on economical electric vehicles and micro commercial vehicles. In addition, the “Shangjie” brand, jointly built by SAIC Motor and Huawei, will soon launch its first model H5, further enriching the product lineup [1].

From the product perspective, in the second half of 2025, SAIC Motor intensively launched a series of new products equipped with core technologies: the all-new MG4 equipped with semi-solid state batteries and CTB technology, the IM LS6 and LS9 featuring “Stellar Super Extended Range” and “Lizard Digital Chassis”, etc. These products have quickly gained market recognition, verifying the effectiveness of the technology-driven growth strategy [1].

From financial data, SAIC Motor’s profitability has shown obvious signs of improvement. In the third quarter of 2025, the company achieved net profit attributable to shareholders of RMB 2.083 billion, skyrocketing 644.88% year-on-year, which reflects that the effects of reform measures have begun to be reflected in profits [1]. The cumulative net profit attributable to shareholders in the first three quarters reached RMB 8.1 billion, a year-on-year increase of 17.28%, showing the sustainability of profit growth [1].

However, it is necessary to objectively view the starting point of this improvement. In the fourth quarter of 2024, the company recorded a quarterly net loss (EPS of -USD 0.46), mainly impacted by industry price wars and the decline in sales of traditional fuel vehicles [0]. Therefore, the current high growth is partly due to the low base effect, and its sustainability requires further observation.

From a cash flow perspective, the company’s financial status remains stable. The latest disclosed free cash flow (FCF) is RMB 48.466 billion, current ratio is 1.17, and quick ratio is 1.02 [0], indicating that the company has sufficient short-term solvency and operational liquidity. The EV/OCF (enterprise value to operating cash flow ratio) is only 6.60x, which is not high from a relative valuation perspective [0].

Financial analysis tools classify the company’s debt risk as “low_risk” and accounting practices as “neutral”, neither overly aggressive nor overly conservative [0]. This indicates that the company has maintained a prudent attitude in financial management and accounting policies.

The profit contribution capacity of self-owned brands is the key to understanding the transformation value of SAIC Motor. Compared with joint venture brands, self-owned brands usually have higher per-vehicle profit margins and stronger brand premium capabilities. Taking IM Motors as an example, as a high-end intelligent electric vehicle brand, its product pricing is significantly higher than that of fuel vehicles in the same class, and its gross profit margin is correspondingly higher. Although Roewe and MG are not as high-end as IM Motors, they have continued to upgrade in design and intelligence, and their brand premium capabilities are gradually improving.

More importantly, self-owned brands can help SAIC Motor get rid of its reliance on the profit sharing model of joint venture brands. For many years in the past, SAIC Motor’s main profit source was investment income contributed by the two major joint venture brands SAIC Volkswagen and SAIC-GM. Although this model provided stable cash flow in the short term, it carried strategic risks of high dependence on external partners. With the increase in the share of self-owned brands and the improvement of profitability, the autonomy and controllability of the company’s profits will be significantly enhanced.

Although the rising share of self-owned brands is a positive trend, SAIC Motor still faces fierce market competition. China’s new energy vehicle market has entered the elimination stage, and brands such as BYD, Tesla, NIO, and Li Auto continue to erode market share. Traditional joint venture brands such as Volkswagen and Toyota are also accelerating their electrification transformation, making the market competition pattern increasingly complex.

In December 2025, SAIC Motor’s sales reached 399,400 units, a year-on-year decrease of 17.3% [1]. The official explanation mainly attributes this to the high base effect from car companies ramping up production to meet the “two new” policies (vehicle trade-in and new energy vehicle purchase subsidies) in December 2024, as well as consumers’ wait-and-see attitude towards the 2026 policy direction [1]. This sales fluctuation reflects the potential impact of market environment uncertainty on the company’s performance.

The automotive industry is highly dependent on policy support, including purchase tax reductions and exemptions, new energy subsidies, and “trade-in” policies. As the first year of the 15th Five-Year Plan, China’s new energy vehicle market will face the challenge of the phase-out of purchase tax subsidies in 2026 [1]. The gradual withdrawal of subsidy policies will test the self-sufficiency capacity of car companies, and those lacking cost control and product competitiveness will face survival pressure.

In addition, the early termination of subsidies in many regions will also affect car sales [1]. For SAIC Motor, how to maintain sales and profit growth after the withdrawal of policy dividends is a strategic question that management must address.

From a valuation perspective, the company’s current P/E ratio is as high as 61.12x [0], significantly higher than the average level of the traditional automotive industry, reflecting the market’s expectations for the company’s transformation prospects. However, high valuation also means that the market has higher requirements for the company’s future growth. Once performance falls short of expectations, the share price may face adjustment pressure.

Technically, the MACD death cross signal and the recent sideways consolidation of the share price [0] suggest that there is divergence in the market’s short-term direction. Investors need to closely monitor the company’s subsequent sales data and financial report performance to verify whether the profit improvement trend of self-owned brands can be sustained.

Comprehensive analysis shows that SAIC Motor’s “comprehensive deepening reform” has achieved phased results. The strong growth of self-owned brands is not only reflected in sales data, but also beginning to translate into tangible profit contributions [1]. The outstanding performance in the third quarter of 2025 indicates that the company’s reform measures are generating positive financial returns.

However, to assess the sustainability of transformation results, attention needs to be paid to the following three key indicators: first, whether the sales growth rate of self-owned brands can continue to outperform the industry average; second, whether the per-vehicle gross profit margin can be steadily improved; third, whether the expense ratio can be effectively controlled. If these three indicators improve simultaneously, it will strongly prove that the company has established a sustainable profit model.

From a long-term perspective, the increase in the share of self-owned brands has positive implications for improving SAIC Motor’s profitability. First, self-owned brands enjoy higher brand premiums and profit margins, which helps to improve the overall gross profit margin. Second, the development of self-owned brands can reduce the company’s strategic dependence on joint venture brands, improving the autonomy and predictability of profit sources. Third, the technological accumulation and market share of self-owned brands in the new energy vehicle field provide a guarantee for the company to occupy a favorable position in industry transformation.

Based on the above analysis, we believe that the increase in SAIC Motor’s self-owned brand share has a positive effect on its profitability improvement, but investors need to pay attention to the following risk factors: first, cyclical fluctuations in the automotive industry may affect short-term performance; second, changes in the policy environment are uncertain; third, high valuation means high market expectations, and performance falling short of expectations may lead to share price adjustments.

For investors with higher risk tolerance who are optimistic about the long-term development of China’s automotive industry, SAIC Motor can be selected as one of the transformation-themed investment options. However, given that the company’s current profitability is still weak, it is recommended that investors closely monitor the performance of the 2025 annual report and the 2026 first-quarter report to verify the sustainability of reform results.

[0] Jinling API Financial Database - Financial Data, Market Data and Technical Analysis of SAIC Motor (600104.SS)

[1] Autohome Chejiahao - “How Did SAIC Motor Perform This Year?” (https://chejiahao.autohome.com.cn/info/24684254)