AutoBeta(AutoBeta.net)03/12 Report--

On the evening of March 11, Tianjin FAW Xiali Automobile Co., Ltd. (hereinafter referred to as "FAW Xiali") disclosed the "announcement on the Progress of the implementation of Major Asset reorganization" and announced that the enterprise name and legal representative had been changed. The announcement shows that on February 21, the Ministry of Ecology and Environment has changed the enterprise environmental protection information, the enterprise name has been changed to "Tianjin Bojun Automobile Co., Ltd." (hereinafter referred to as "Tianjin Boxun"), and the legal representative has been changed to "HUANG XIMING".

On September 7, 2019, FAW Xiali announced that it intends to contribute with assets and liabilities related to land, plant and equipment of the whole vehicle, and Nanjing Bojun New Energy Automobile Co., Ltd. with cash to set up a joint venture Tianjin Bojun Automobile Co., Ltd. According to Tianyan survey data, Tianjin Boxun was established on November 18, 2019, with a registered capital of 253400 yuan, of which 80.1% was held by Nanjing Boxun and 19.9% by FAW Xiali. The current legal representative has been changed to HUANG XIMING.

In addition to cooperation with Nanjing Boxun, FAW Xiali also reorganized assets with China Railway Wusheng Science and Technology Development Co., Ltd. (hereinafter referred to as China Railway Wusheng). On December 8, 2019, FAW Xiali announced that its controlling shareholder, China first Automobile Co., Ltd. (hereinafter referred to as FAW Xiali), will transfer its holding stake in FAW Xiali to China Railway Materials Co., Ltd. (hereinafter referred to as China Railway Materials) free of charge. According to the announcement, FAW Xiali placed all its existing assets and liabilities to China Railway Wusheng, a subsidiary designated by the company's controlling shareholders, and purchased a controlling stake by issuing shares to purchase assets. After this asset restructuring, the controlling shareholder of FAW Xiali will be changed to Iron shares, and the actual controller will still be SASAC of the State Council.

In fact, both FAW Xiali and Nanjing Boxun are not optimistic about the current business situation. FAW Xiali made a cumulative loss of more than 7.5 billion yuan from 2014 to 2018. According to the 2019 performance forecast issued by FAW Xiali on January 22, FAW Xiali made a pre-loss of 1.25 billion yuan to 1.39 billion yuan in 2019, compared with a profit of 37.31 million yuan in the same period last year, down 3450.31% 3,825.54% from the same period last year. The company said that the main reason for the loss was the overall decline in sales in the automobile market, as well as the continued downturn in production and sales during the reporting period due to the weakening of the brand, deviation in positioning and allocation, weakening of sales channels and many other factors, as well as the resulting increase in the cost of asset impairment preparation and staff placement.

In the five years of losses, FAW Xiali had to sell its property in order to ease the financial pressure. FAW Xiali sold the internal combustion engine manufacturing branch, transmission branch, product development center and automobile research center. In addition, FAW Xiali will transfer 15% of its shares in FAW Toyota to FAW twice at a price of 2.56 billion yuan and 2.923 billion yuan.

However, Nanjing Bojun Automobile, which cooperates with FAW Xiali, is not doing well at present. Nanjing Boxun Automobile, founded in 2016, has been protected by employees for defaulting employees' year-end bonus and overtime pay. Coupled with suppliers running out of stock, Boxun Automobile production has encountered difficulties. Recently, it has been exposed that employees are required to pay social security on their own. Whether it is the individual payment part or the company payment part, the employees have to bear the responsibility. Boxun Motors unveiled two SUV models, the iV6 and iV7, at the 2019 Shanghai Auto Show, and opened bookings at the same time, but the launch is still a long way off.

At present, FAW Xiali only retains the "shell" of listed companies, most of the assets have basically been contributed, and Zhongwu shares have also become the new controlling shareholder of FAW Xiali, helping FAW Xiali to complete the transformation. In addition, Nanjing Boxun Automobile, as a member of the new car-building force, is not optimistic at present, and its mass-produced models are still indefinite, especially in the epidemic, if it is unable to resist the negative impact of the epidemic, it will directly face the risk of being eliminated by the market.

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