AutoBeta(AutoBeta.net)03/14 Report--

A few days ago, Jianghuai Automobile announced that it had convened the 14th session of the Seventh Board of Directors to examine and approve the "motion on applying for mortgage loans to the Anhui Branch of the Export-Import Bank of China with its own assets."

According to the announcement, the company plans to apply to the Anhui Branch of the Export-Import Bank of China for credit business of no more than 1.6 billion yuan in local and foreign currencies between January 1, 2020 and December 31, 2026, and to provide the maximum mortgage guarantee for local property and land valued by the Company at least 2.7 billion yuan.

However, the use of the credit funds, Jianghuai Motor has not made a clear disclosure. However, for such an application, it will inevitably make people think that Jianghuai needs financial assistance because of its performance problems, because under the influence of the current epidemic, many car companies are facing a shortage of funds, so they need to apply for a "relief fund."

According to the previous performance forecast issued by Jianghuai Automobile, the company expects to realize the net profit belonging to the shareholders of the listed company in 2019 compared with the same period last year. The net profit belonging to the shareholders of the listed company is about 100 million yuan; the net profit belonging to the shareholders of the listed company after deducting non-recurring profits and losses is about-980 million yuan, compared with a loss of 786 million yuan in the same period last year.

For profit reasons, thanks to the company's initiative to adjust the product structure, strictly strengthen cost control and enhance the profitability of the main business, the gross profit of the main business has increased by about 540 million yuan.

However, JAC sales for the whole year of 2019 are not optimistic. According to JAC previously released sales data, JAC passenger car sales in 2019 were 163000, down 17.8 per cent from the same period last year. Among them, Jianghuai Motor sold 58000 pure electric passenger cars in the whole year, down 8.87% from the same period last year. The same is true for both fuel models and new energy models. Jianghuai Volkswagen, which works with Volkswagen, is also affected by the new energy vehicle market. Jianghuai Volkswagen Sihao E20X has been on the market for more than three months and sold only 1639 vehicles in 2019.

In July of the same year, the company also received a fine of 170 million yuan from the Beijing Municipal Bureau of Ecological Environment for fraudulent emissions from its truck products. However, all the compensation is really due to the reversal of the policy subsidies that JAC received. According to incomplete statistics, from 2014 to 2018, JAC received a total of 8.718 billion yuan in government subsidies, while its net profit was only 2.225 billion yuan.

However, for the 1.6 billion yuan of this application, it is also reported that it is related to the "NIO China" project planned by Xilai Automobile. Because shortly before JAC applied for credit, the Hefei municipal government had just completed the cooperation plan for the "NIO China headquarters" project signed with NIO.

According to the information disclosed by the Hefei Municipal people's Government, the project of the China headquarters of Lulai Automobile includes: the establishment of the China headquarters of Lulai Automobile in Hefei, the establishment of research and development, sales and production bases, and the establishment of a Chinese headquarters operation system centered around Hefei. The project plans to raise more than 10 billion yuan.

As Jianghuai Automobile and Xilai Motor have some financial difficulties, they are unable to make a large investment in the early operation. as a new power car company, the profitability of the company is also well known. Therefore, some people in the industry believe that if the two sides want to set up "NIO China", it is necessary for the local government to "advance capital" after defining the specific proportion of investment and planning before the project can enter the preparatory stage, so it is speculated that Jianghuai credit behavior is related to this.

In April 2016, Xilai announced that it had reached a strategic cooperation agreement with Jianghuai Motors to manufacture Lai ES8 and jointly build a NIO Hefei plant. Therefore, Xilai announced that the Chinese headquarters is located in Hefei, where Jianghuai Automobile headquarters is located, and the cooperation between the two sides in the early stage will also be deepened. In the current environment, this cooperation between the old and the new may help both sides to bring about better development.

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