FAW Car in the first half reached 240 million yuan accounts receivable, increased to 9 times the same period last year. Net cash flow from operating activities was -1.8 billion, indicating a reduction in product sales due. Carrying 190 million yuan currency funds, short-term loans was as high as 2.5 billion.
Net loss of 826 million yuan of non-deduction, down 675 percent, the worst in the semi-annual report since its listing after the surrender, FAW Car (000800.SZ) or arm to survive.
21st Century Business Herald reporter learned exclusively, the Department will integrate FAW's Hongqi related assets.
According to sources close to the FAW revealed specific integration path will be to China First Automobile Co., Ltd. (hereinafter referred to as "FAW shares") under the red flag as the main cause of the establishment of the FAW Hongqi Branch shares (hereinafter referred to as "red flag points the company"). FAW Hongqi all assets will be stripped to the FAW shares.
In fact, since March this year, FAW Hongqi Division since the establishment of the shares, the market for the integration of Hongqi assets will have expected. Shares in the FAW, FAW Hongqi Division and units of the same level.
"At present, all production assets are in the red car FAW Car." September 12, FAW Securities Office staff told reporters.
Aforementioned sources pointed out that the red car production line underemployment, weak sales in the FAW system losses. As can be peeled off, FAW Car for the 2016 full-year results will boost.
Integration Expected
After the China First Automobile Group Corporation (hereinafter referred to as "FAW Group"), the arrival of new leadership, consolidation is expected to red flag the assets has been relatively strong.
In addition to the establishment in March of the same level FAW Hongqi division, but in April, FAW Car and FAW Group signed a "trademark license contract," the supplemental agreement. According to the Supplemental Agreement, since 1997 the right to use the trademark red flag FAW exclusive, with FAW Group and changed to permit shared with third parties.
According to the original contract, license FAW Group FAW Hongqi enjoy exclusive right to use the trademark, FAW Car sales by the use of trademarked products price of 1,000 yuan per standard calculation pay royalties to the FAW Group. Fee charged for the number of years until the cumulative sales of 240,000, after the red flag FAW Group trademark free transfer to FAW.
After the change, the red flag will be extended to the right to use the trademark FAW Group and other third-party licensing. As compensation, the trademark license fee FAW Car sales have not yet completed the task 69800 red car corresponds to 69.8 million will be exempt.
"Red Flag brand is currently in cultivation period, yet the formation of scale, shared use rights by the FAW Group and companies help to mobilize resources for Hongqi brand nurture and develop." FAW expressed in communicating with investors when.
In fact, another important reason for the move, or that the performance of a substantial decline FAW, did not have sufficient funding and capacity to develop red brand, and loss of red hand, will erode profits of listed companies.
FAW Car also admitted, "and the group shared trademark can reduce financial risk and operational risk."
Performance data show the first half of FAW Car has been operational risks can not be ignored. Semi-annual disclosure, the company first half vehicle sales 80,700, 33.21% lower than last year, while the Automotive Industry Association data show that, while domestic car sales rose 8.1%.
Financial data is also not optimistic. FAW Car in the first half reached 240 million yuan accounts receivable, increased to 9 times the same period last year. Net cash flow from operating activities was -1.8 billion, indicating a reduction in product sales due. Carrying 190 million yuan currency funds, short-term loans was as high as 2.5 billion.
And in such a stretched financial situation, FAW Hongqi brand still costly investment in research and development among.
April 2015, the parent company of FAW and FAW Hongqi H7 stock cooperative construction technology upgrade project, after completion of the project capacity of 13,000. In this project, FAW invested 277 million yuan, while the construction period of the project is 26 months, the payback period is expected to 5.71 years. As of June 30, 2016, the progress of the project is 32%, not generate revenue.
In addition, in the first half of the FAW Hongqi L platform T503 models, red LS5 (P504) model transformation two projects totaling 24 million investment in R & D funding, and the project is expected to invest a total 700 million yuan.
"Red car belongs to its own brand, with a strategic position, R & D investment is necessary, but is unlikely to be profitable assets of the current poor performance of FAW Car is a burden, stripped out of listed companies is good." A senior Cars industry sources pointed out.
Red Can rebirth?
Red Flag is a well-known Chinese brand cars, but because of market positioning, marketing strategy and other issues in the sales market has been suffering from cold, awkward.
At present, the red flag in production models in the sale price of only 250,000 to 490,000 of Hongqi H7 and 5 million high-priced car Hongqi L5.
"Hongqi H7 car series, we will give 70000-100000 concessions, is already relatively large promotional efforts, but still difficult to sell, to sell about 10 units a month, the same period in other models are selling well." Beijing a car dealer told reporters.
According to the China Association of Automobile Manufacturers, the 2015 annual Hongqi H7 car production was 5021, an increase of 98.3% over the same period sales of 5037, an increase of 86%.
It should be noted that the reason for production and sales surged in the previous year mainly small base.
In fact, the red car of a serious shortage of capacity utilization, lack of competitiveness in the consumer market. According to the aforementioned securities office staff said, the current FAW's Hongqi car capacity of 30 000, that is, the year 2015 the capacity utilization rate is still less than 17%.
China Automobile Dealers Association executive director Jia Xinguang that red car is the party and government cadres car brand image ingrained, the average consumer is difficult to show interest, and therefore is not recognized in the consumer market, and after canceling official car, red car original market shrink considerably.
"In accordance with the original car standards, a rough estimate there are considerable Sansishiwan market, but the market is gone." Jia Xinguang said.
In fact, overwhelmed by the integration means assets of FAW Hongqi Department for red cars have higher expectations. Recently in Changchun International Automobile Exhibition, Red exhibited two concept cars B-Concept and S-concept, as well as a red flag H7 blue transit vehicles, new energy vehicles Hongqi H7 PHEV also listed in late August. "FAW Hongqi brand is the gold standard, we must do." The new FAW Group Chairman Xu Ping on several occasions.
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