DONGFENG GROUP(HK:00489) Xin Lang Zheng Quan·2025-03-28 09:50Core Viewpoint - Dongfeng Motor Group Co., Ltd. reported a revenue of 106.197 billion yuan for 2024, marking a year-on-year increase of 5.99%, and a net profit of 0.58 billion yuan, indicating a return to profitability after a loss of 3.996 billion yuan in 2023 [2][3] Revenue and Profit Analysis - The revenue growth was primarily driven by increased income from passenger vehicles, particularly in the self-owned and new energy vehicle segments [2] - Despite returning to profitability, the net profit of 0.58 billion yuan raises concerns about the quality of earnings, as significant increases in trade receivables and inventory were noted without corresponding increases in bad debt provisions [3][8] Trade Receivables and Inventory Concerns - Trade receivables rose to 12.412 billion yuan, a 41.5% increase year-on-year, with notable growth in short-term and medium-term receivables [3][5] - The bad debt provision decreased from 2.240 billion yuan to 1.941 billion yuan, a reduction of 13.3%, which is atypical given the increase in receivables [3][6] - Inventory increased from 11.42 billion yuan at the end of 2021 to 15.37 billion yuan by the end of 2024, with inventory turnover days rising from 43.6 to 57.5 days [6][8] Market Performance and Sales Targets - Dongfeng Nissan and Dongfeng Honda, key brands under Dongfeng Group, experienced significant declines in sales, with Nissan's sales down 13% to 630,000 units and Honda's down 29% to 430,000 units [9][11] - In the first two months of 2025, sales for these brands continued to decline sharply, with Nissan down 28% and Honda down 60%, leading to an overall decline in passenger vehicle sales of 33.8% [11] - Despite these challenges, the company set an ambitious sales target of 3 million units for 2025, a nearly 60% increase from the 1.9 million units sold in 2024, raising questions about the feasibility of this goal [11]