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Chang'an Automobile: Great Diving in Performance, Who will Back the "Pot" ...

2019-2-18 15:32| 发布者: 左二爷| 查看: 3810| 评论: 0|来自: 成都桑拿网www.cdr114.net

摘要: "Reduced return on investment from joint ventures" runs through almost every report of Chang'an Automobile Company in 2018, but the company has always been reluctant to admit that weak independent ...
"Reduced return on investment from joint ventures" runs through almost every report of Chang'an Automobile Company in 2018, but the company has always been reluctant to admit that weak independent brands are the root cause of poor performance.

At the same time that the net profit plunged by 90% was exposed, the drawbacks of Chang'an automobile's over-reliance on joint ventures and government subsidies were undoubtedly exposed. At the end of January, Chang'an Auto reported net profit of 500 million yuan to 750 million yuan in 2018. As for the reasons for the decline in performance, Chang'an Automobile explained that "the return on investment of joint ventures has decreased", and in 2018, Chang'an Ford's sales have declined due to the aging of its models.

Chang'an Automobile is not unaware of its own problems. On February 13, Zhu Huarong, president of the company, issued an internal letter saying that Chang'an Automobile should be resolutely reformed and transformed into an intelligent travel technology company. But the problem is that most of the new business is difficult to make profits in a few years. At present, the bottleneck period of Chang'an automobile industry is now in existence. The new business is burning money very fast, and the new energy subsidies are declining. How can the company ensure that its performance will not decline further? Zhu Huarong did not make an explanation in his internal letter.

Overdependence on Chang'an Ford

The market value has evaporated nearly 30 billion yuan, and the stock price has dropped from 1.276 yuan to 6.5 yuan. For Chang'an Automobile, 2018 is undoubtedly a "water reverse year".



Behind the capital flight from Chang'an Automobile is the initial bottleneck of the company's business. On January 30, Chang'an Automobile issued a performance forecast showing that the net profit of returning home in 2018 was only 500 million yuan to 750 million yuan, down 90% from the same period last year. In addition, Chang'an also expects earnings per share of 0.10 yuan to 0.16 yuan in 2018, compared with 149 yuan in 2017. In terms of sales volume, 213.8 million vehicles were sold in 2018, which did not meet the sales target of 3.1 million vehicles set at the beginning of the year, down 25% from the same period in 2017.

It is worth mentioning that the non-net profit deducted by Chang'an automobile has been declining for two consecutive years. In the first three quarters of 2018, the company deducted non-net profit of - 15.7535 million yuan, and in the first three quarters, the company received a government subsidy of 657 million yuan. However, in the fourth quarter of 2018, the government has provided subsidies totaling 1 billion yuan. With government subsidies, the company's net profit is only 5-750 million yuan, and the loss deducting non-net profit can only be further expanded.

For this achievement, Chang'an Automobile once again gave the same explanation in the quarterly report, the semi-annual report and the three quarterly report "due to the reduction of investment returns of the joint venture". Official data show that sales of Chang'an Ford and Mazda in 2018 were 377,000 and 166,000 respectively, down 14% and 54% year-on-year. Chang'an Ford is the main reason to pull down the performance of Chang'an automobile. Its sales plummeted because of the aging of the model.

This explanation is obviously not convincing. Chang'an Ford's poor sales do drag down its performance, but it can not be a reasonable explanation for the poor performance. Overdependence on joint ventures and lack of competitiveness of independent brands are the root causes of its poor performance.

In 2017, the net profit of Chang'an automobile returning to its mother was 7.137 billion yuan, of which investment income was as high as 6.855 billion yuan and Chang'an Ford's contribution was as high as 6.639 billion yuan. In 2016, the net profit of Chang'an automobile returning to its mother was 10.285 billion yuan, of which investment income was 9.564 billion yuan and Chang'an Ford's contribution income was 9.929 billion yuan.

Auto analyst Zhong Shi pointed out that Chang'an automobile is totally dependent on Ford. Besides a few SUV performances, Chang'an self-owned brands are basically not contributing to overall profits.

Transformation and self rescue

Faced with the gradual decline in performance, Chang'an Automobile hopes to actively transform to reverse the situation. In 2018, Chang'an put forward "the third entrepreneurship" and "Beidou Tianshu Plan" respectively, aiming at new energy and intellectualization. Chang'an plans to eliminate the production of non-networked new cars by 2020 and realize 100% networking of new products.

Chang'an Automobile has also formulated a radical timetable for new energy vehicles, saying that by 2025 it will completely stop selling fuel vehicles and electrify all its products. In order to promote the implementation of this goal, Chang'an Automobile announced in August 2018 that it intends to restructure its internal assets and transfer the assets related to the group's new energy automobile business to its subsidiary Chongqing Chang'an New Energy Automobile Technology Co., Ltd. to optimize the allocation of resources.

On February 13 this year, the president of Chang'an Automobile, Zhu Huarong, issued an internal letter saying that Chang'an Automobile should resolutely reform and transform into an intelligent travel technology company. Internal letters also mentioned that the group will promote organizational and incentive mechanism changes.

But insiders believe that if the traditional business is insufficient, the transformation will be difficult to succeed, because the new business will inevitably burn money, and it will be difficult to make profits in a short time. Take General Motors for example, CEO Mary Barra said previously that the electric vehicle business is not expected to turn a profit until 2020, and the company's self-driving business is still losing money, losing more than $1.5 billion from 2016 to 2018.

The reality is that the decadence of Chang'an automobile's own brand is now. The results show that after excluding the profits of the joint venture, the net profit of Chang'an Automobile declined sharply in the third quarter of 2016, 2017 and 2018, amounting to 713 million yuan, 351 million yuan and -061 million yuan respectively.

Chang'an Ford's sales are also declining rapidly in 2018, and new business will inevitably cost a lot of money. In this context, how can the company ensure that it is not dragged into liquidity crisis? The performance of Chang'an Automobile has fallen sharply in 2018. How much surplus grain does Chang'an Automobile have to invest in intelligent travel? On February 14, Investor Net called Li Jun, the Secretary of Chang'an Automobile, and sent a survey letter to him on the above issues, which indicated that the problem had been fed back to the head of brand public relations department. But as of the time of submission, the latter has not given any reply.

However, even if the traditional business is weak, Chang'an Automobile is still full of vitality, one of the reasons is the continuous government subsidies. On December 21, 2018, Chang'an Automobile received heavy load

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