The hottest profit decline loss, what happened to

Profit decline! Loss... What happened to these Huizhou car companies

electromechanical; Mechanical and electrical products; Automobile enterprises; Market conditions; Industry analysis: the sales volume of the automotive industry increased negatively for the first time, dragging down the performance of Listed Companies in 2018. Recently, FAW Xiali, Zhongtai automobile, JAC automobile, Lifan shares, *st Haima, BAIC Foton, BYD, *st Ankai and Valin Xingma, a total of 9 automobile listed companies, have successively received annual report inquiry letters from Shanghai and Shenzhen Stock Exchange

since the Shanghai and Shenzhen Stock Exchange comprehensively launched sub industry supervision in 2015, inquiry letters and attention letters for automotive listed companies are not uncommon, but this round of more than ten companies have been inquired and concerned. This situation is rare, from vehicle manufacturing to new vehicle sales and circulation, from passenger cars to commercial vehicles, from traditional business to new energy business. The problems involved are not limited to the decline of performance and profit margin, but also include costs The soaring debt ratio and low capacity utilization reflect the plight of the entire automotive industry in the face of market exploration and transformation to the fields of electrification and intelligence

01 performance fell

according to incomplete statistics, the vehicle listed companies that received the inquiry letter this time include FAW Xiali, Zhongtai automobile, JAC automobile, Lifan shares, *st Haima, BAIC Foton, BYD, *st Ankai and Valin Xingma, a total of 9. In addition, two listed dealers of Guanghui automobile and Pangda group were also involved

the profits of these auto companies generally fell. For example, JAC motor, according to its annual report, the company achieved a net profit attributable to the parent company of -786 million yuan during the reporting period in 2018, a year-on-year decrease of 282.02%; Net profit after non deduction was -1.877 billion yuan, a year-on-year decrease of 1915.50%. During the reporting period, Lifan achieved a net profit attributable to the parent company of 253 million yuan, an increase of 48.34% year-on-year; Net profit after non deduction was -2.15 billion yuan, a year-on-year decrease of 1047.68%. In addition, BAIC Foton's net profit after deduction for five consecutive years from 2014 to 2018 was negative, and the net profit after deduction brought unnecessary losses, with a cumulative loss of 6.618 billion yuan

as for Zhongtai automobile, which was listed through backdoor in 2017, the net profit attributable to the shareholders of the parent company after deduction of Non Profits in 2018 was -49.1426 million yuan, a year-on-year decrease of 136.63%; Not only did Zotye's profits decline sharply, but Zotye also faced a series of problems such as rising debt ratio and declining gross profit margin. Its financial report shows that the balance of current liabilities of Zhongtai automobile at the end of the reporting period was 14.234 billion yuan, and the balance of current assets was 17.333 billion yuan; During the reporting period, the gross profit margin of Zhongtai automobile transportation equipment manufacturing industry was 13.42%, a year-on-year decline of 28.42 percentage points

it is precisely because of this seemingly difficult financial report that the Shenzhen Stock Exchange's inquiry letter for Zhongtai automobile is as long as 8 pages, listing 16 major items and nearly 40 questions. By comparison, almost every key financial data disclosed by Zotye in the financial report has been mentioned in the inquiry letter of Shenzhen Stock Exchange accordingly. Although Zhongtai automobile received a letter of inquiry on the disclosure on the evening of May 24, it still did not reply to this as of press time

among the above nine vehicle enterprises that received the inquiry letter, BYD is the one with the highest market value and the best operating condition. But even so, BYD was also concerned by the Shenzhen Stock Exchange about the problems of falling profits and rising costs. According to the financial report data, during the reporting period, BYD's operating revenue reached 130.055 billion yuan, an increase of 22.79% year-on-year; However, the net profit attributable to shareholders of listed companies decreased by 31.63% year-on-year to 2.78 billion yuan; The net profit after non deduction was 586 million yuan, a year-on-year decrease of 80.39%

in response to the inquiry letter of Shenzhen Stock Exchange, BYD pointed out that the decline of the company's profit margin was mainly due to several aspects: first, it was affected by the decline of the gross profit margin of the automotive business and the rise of the company's period expenses; Second, the subsidy for new energy vehicles was reduced in stages, which brought certain profit pressure to relevant enterprises in the industry. The gross profit margin of BYD's automotive business decreased from 24.31% in 2017 by 4.53 percentage points to 19.78%. Third, the expenses increased significantly. The total expenses during 2018 increased by 2.451 billion to 16.476 billion compared with 2017, mainly due to the growth caused by the continuous increase of R & D investment and the rise of financing costs

in its reply, BYD disclosed the reasons affecting the company's profits, which is similar to the situation of other vehicle manufacturers mentioned above, but the difference is that BYD's car sales in 2018 still maintained a 23% growth, reaching 500000 vehicles, while the sales of the other eight companies fell rapidly, which made the already gloomy performance worse

02 price war hollows out profits

as the overall car market shrank in 2018, from luxury cars to entry-level models, the top-down price war has brought a lot of impact on the profits and gross profit margin of car enterprises

listed dealers are particularly affected by this. As an enterprise that has long been ranked in the top 10 of the top 100 dealers list, Guanghui automobile saw a 16% decline in profits despite the increase in operating revenue in 2018. Pangda group lost more than 6billion yuan in 2018

Guanghui automobile said in its reply that the company's revenue in the third and fourth quarters of 2018 increased compared with the first two quarters, but the profit in the fourth quarter decreased significantly compared with the first three quarters. The main reason is that in order to protect and improve market share, the company increased advertising and sales promotion. The sales expense in the fourth quarter increased by 480 million yuan compared with the third quarter, increased by 458 million yuan compared with the average of the first three quarters, and the operating profit decreased

the inquiry letter for the huge group also focuses on the decline in profits. At the same time, the attention for the huge group also includes the shortage of cash flow, the decline of financing amount, the rise of financing cost, the increase of financial expenses, etc. Like Guanghui, Pangda was once the leading enterprise of dealers, and the decline in Guanghui's profitability and the huge losses of Pangda group are only a microcosm of the survival of dealers in 2018. Statistics show that more than half of the dealers lost money last year. Judging from the situation in the first may of 2019, the downward trend of the car market is still continuing. Coupled with the price and promotion war brought about by the emission upgrading, it is expected that the profitability of dealers' Listed Companies in the first half of this year is still not optimistic

03 the risk of idle production capacity increases

in the inquiry letter of Shanghai Stock Exchange, a major concern for Guanghui automobile is the increase in the amount of inventory. In fact, not only Guanghui, almost all dealers in 2018 are facing the trouble of increasing inventory turnover days. The weakness of the market also lengthens the inventory turnover days of car companies

the market downturn leads to the increase of dealers' inventory, and the measurement range of transmission tension does not need to be very large. Up to the upstream, it will lead to the increase of inventory and turnover days of vehicle manufacturers. The final feedback to the manufacturing end is the further increase of the risk of idle production capacity of vehicle enterprises. In the inquiry letter, the exchange required JAC, Lifan and BAIC Foton to disclose capacity utilization respectively. According to the data revealed by several car companies (3) who sometimes adopt cast structures (cast steel, cast aluminum, etc.), the capacity utilization rate of BAIC Foton light passenger cars and passenger cars has been low for a long time, with an average of only 35% and 32% in recent five years. The capacity utilization rate of JAC passenger car factory is only 45.03%. So far, Lifan automobile has not made a formal response to the inquiry letter, and although Haima automobile has not been asked about its capacity utilization, its capacity utilization rate was only about 45% in 2017. In 2018, the sales volume of Haima automobile fell further than this, and the capacity utilization rate undoubtedly fell further

low sales, idle production capacity, and with the further reduction of national subsidies for new energy vehicles, the cold winter of domestic listed car companies is gradually coming. Among the above nine vehicle enterprises that received the inquiry letter, in addition to BYD clearly indicating the opportunities in the field of new energy and the preparation for dealing with the cold winter in the vehicle market, BAIC Foton also expressed specific measures to improve its business and profitability in its reply. Lifan, JAC and Zhongtai automobile applied for an extension to respond to the inquiry letter, and FAW Xiali has not yet responded to the inquiry letter

from the data, including Lifan, Zhongtai and JAC, the capital situation has been very tight. Among them, Lifan disclosed in its 2018 financial report that the company's current liability book balance at the end of the reporting period was as high as 18.78 billion yuan. Among them, short-term borrowings were 9.161 billion yuan, notes payable and accounts payable totaled 4.181 billion yuan, other payables were 2.326 billion yuan, and non current liabilities due within one year were 2.650 billion yuan. Correspondingly, the book balance of current assets of the company at the end of the reporting period was 13.429 billion yuan. Among them, monetary capital is 5.403 billion yuan, notes receivable and accounts receivable are 2.834 billion yuan, other accounts receivable are 1.978 billion yuan, and inventory is 1.68 billion yuan. The company has large liabilities that will mature within one year, and its current assets are far lower than current liabilities

according to the annual report of FAW Xiali, its asset liability ratio at the end of 2018 was 97.34%, and by the end of the first quarter of 2019, its asset liability ratio had risen to 101.93%; At the end of the reporting period in 2018, current liabilities had reached 4.078 billion yuan, while current assets were only 2.747 billion yuan, which also faced the problem of insolvency

in addition, the cash flow generated by JAC's operating activities has continued to flow out in recent years. From 2016 to 2018, it was -350 million yuan, -6.663 billion yuan and -3.454 billion yuan respectively, with a cumulative net outflow of 10.467 billion yuan. From 2016 to 2018, the net cash flow generated by the company's investment activities was -1.315 billion yuan, -347 million yuan and -3.746 billion yuan respectively. By adding wood flour, rice husk, straw and other waste plant fibers to mix into new wood materials, the cumulative net outflow was 5.408 billion yuan

at present, these three passenger car manufacturing enterprises are accelerating the pace of cooperation with the new forces of car manufacturing. However, the new forces of car making are still in the stage of spending money to cultivate at present. In addition to bringing a certain release in production capacity, it is difficult to bring a significant pull to the market and profits of partners

profit decline! What happened to these Huizhou car companies that lost money? It is collated and released by China mechanical and electrical products trading (hereinafter referred to as machine trading). If you need to reprint, please indicate the source of the article. For more information about the electromechanical industry, please click attention: electromechanical information of China's electromechanical products trading