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Tianjin FAW Xiali Automobile Co., Ltd. released its third quarter results report in 2019, which showed that revenue in the third quarter of this year was 65 million yuan, an increase of 69.29% over the same period last year. The net profit belonging to shareholders of listed companies was-149 million yuan, down 59.16% from the same period last year. The cumulative revenue of FAW Xiali in the first three quarters of this year was 353 million yuan, down 62.52% compared with the same period last year. The net profit belonging to shareholders of listed companies was-701 million yuan, an increase of 30.15% over the same period last year.

In fact, FAW Xiali has not made a profit since it deducted its net profit in 2012. According to the data, from 2014 to 2018, FAW Xiali deducted the net profit of-1.737 billion yuan,-1.18 billion yuan,-1.677 billion yuan,-1.666 billion yuan,-1.263 billion yuan,-1.263 billion yuan. Over the past five years, FAW Xiali has lost more than 7.5 billion yuan.

In the five years of losses, FAW Xiali had to sell its property in order to ease the financial pressure. FAW Xiali sold 15% of FAW Toyota, internal combustion engine manufacturing division, transmission branch, product development center and automobile research center, etc., but the sale of household property also led to a sharp decline in FAW Xiali sales.

During the five-year period from 2014 to 2018, 72000, 64900, 36900, 27100 and 18800 vehicles were sold respectively, with a total of 219700 new cars sold in the five-year period. According to this calculation, FAW Xiali loses 3424 yuan for every car it sells. In the first half of this year, FAW Xiali sold a total of 3920 Weizhi and Junpai brand cars, down 69.86% from the same period last year. At present, FAW Xiali has stopped producing Junpai brand due to the establishment of a joint venture with Nanjing Bojun New Energy vehicle.

FAW Xiali said that the company's loss was mainly due to the overall decline in auto market sales, as well as the company's products due to brand weakening, positioning and configuration deviation, weakening of sales channels and many other factors, the company's product sales remain in the doldrums. At present, the company is actively promoting the joint venture and cooperation with Nanjing Bojun New Energy Automobile Co., Ltd.

On April 29 this year, FAW Xiali announced that it would set up a joint venture in Nanjing Bojun New Energy vehicle Co., Ltd., and the two sides worked together on the new energy vehicle market. There has been no news since. Until September 28th, FAW Xiali announced that it would jointly fund a joint venture with Nanjing Boxun New Energy Automobile to develop and produce new models, of which FAW Xiali contributed 505 million yuan at the price of some assets and liabilities and held a 19.9% stake in the joint venture company. Nanjing Boxun contributed 2.034 billion yuan in cash and held an 80.1% stake in the joint venture company.

After landing, FAW Xiali will no longer "produce cars alone", but will develop Boxun brand together with Boxun Automobile, so FAW Xiali has embarked on the journey of new energy vehicles through Boxun, but it is not easy to build new cars with high sales!

At present, with the decline of subsidies for new energy vehicles, coupled with the downturn in the car market, most car companies have lost money one after another, and it is still unknown whether the joint venture between FAW Xiali and Boxun Automobile will lead a good life.

However, there are certain risks in the cooperation between FAW Xiali and Boxun Automobile. According to the FAW Xiali announcement, if the joint venture company fails to obtain the automobile production qualification within 6 months after its establishment, unless it is caused by Boxun Automobile, Boxun Automobile has the right to unilaterally rescind the shareholder Agreement and dissolve the joint venture company.

In addition, FAW Xiali and Boxun Automobile Joint Venture is a major asset restructuring received a letter of inquiry from the Shenzhen Stock Exchange. In the inquiry letter, the Shenzhen Stock Exchange asked FAW Xiali to explain the main business of FAW Xiali after the completion of the transaction, the company's sustainable operating ability, and whether it competed with the controlling shareholder in the same industry, and asked FAW Xiali to reply before October 25. at present, FAW Xiali has given a reply.

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