AutoBeta(AutoBeta.net)06/23 Report--

On the evening of June 22nd, Zhongtai officially disclosed its 2019 financial report. The annual report showed that Zhongtai's operating income in 2019 was 2.986 billion yuan, down 79.78% from the same period last year; the net profit of shareholders belonging to listed companies was-11.19 billion yuan, down 1498.98% from the same period last year.

In view of the reasons for the substantial loss in performance, Zhongtai Automobile said in the financial report: first, under the influence of the macroeconomic situation, the overall prosperity of the automobile industry is not high, and the competition in the industry is becoming increasingly fierce. the company's liquidity shortage and other factors led to a sharp decline in the company's vehicle sales, falling short of expectations. Due to the sharp decline in sales, the company's operating income has dropped sharply, and operating costs have risen relatively, resulting in large operating losses. The second is to make provision for impairment of large goodwill and other assets.

However, what is more surprising than the huge loss is that Zhongtai stated in its annual report that director Lou Guohai could not guarantee the authenticity, accuracy and completeness of the annual financial report. The reason given by Lou Guohai is that in view of the great uncertainty of the company's sustainable operating capacity, it is difficult for the company Tieniu Group to cash in the company's performance compensation, and the company faces many litigation and guarantee matters. In this case, it is impossible to reasonably estimate the amount of losses caused to the company due to performance compensation and contingencies. Combined with the audit report issued by Tianzheng International Accounting firm, it is impossible to confirm the authenticity, completeness and accuracy of the company's financial data such as sales revenue, total profits and net profits belonging to shareholders of listed companies in 2019.

In addition, Zhongtai Automobile released the "Internal Control Audit report" said that Tianzheng International Accounting firm (Special General Partnership) issued an audit report for Zhongtai Automobile which could not express its opinion.

Zhongtai said revenue and costs inflated at the same time in the first, second and third quarters of 2019 because accountants were negligent and failed to offset internal transactions. In this regard, according to the office of international accountants, Zhongtai Motor announced on April 24, 2020, the main unaudited operating data for 2019, of which the operating income was 3.203 billion yuan, which was unexpectedly lower than the first, second and third days of 2019. Quarterly sales revenue (3.969 billion yuan, 5.04 billion yuan, 5.401 billion yuan). "the internal control failed to find the above major errors in the course of operation and failed to find the relevant misstatements in a timely manner, resulting in major doubts about the accuracy of financial data information disclosure and invalidation of the related internal control of financial reporting."

Zhongtai Motors said that Zhongtai Automobile shares will be suspended for one day on June 23 and resume trading on Wednesday, June 24, 2020, and will begin to be treated as a "delisting risk warning". The short name of the stock will be changed from "Zhongtai Automobile" to "* ST Zhongtai". In order to protect the rights and interests of investors, the daily rise or fall of its shares is limited to 5%.

In the eyes of consumers, Zhongtai Automobile is a car company that relies on imitation, and its products are sought after by consumers in a short period of time by virtue of "high-end reference". From the perspective of market performance, with the help of the hot sales of high-imitation models, Zhongtai Motor sales have also achieved great-leap-forward growth. Among them, 166000 vehicles were sold in 2014 and about 220000 in 2015. Zhongtai Motor sold more than 330000 vehicles in 2016, which was the best performance in the history of Zhongtai Automobile and entered the top 10 of domestic independent brand sales. at this time, Zhongtai's "ruler" has become a "sharp blade" of sales growth.

Zhongtai Motor backdoor Golden Horse shares were listed in March 2017, and Zhongtai Motor sales began to decline all the way in that year. Zhongtai sales fell to 317000 and 154800 in 2017 and 2018, and again to 116600 in 2019 (excluding Junma). Zhongtai will no longer disclose specific sales in 2020, but sales of Zhongtai only fell by 96 per cent from January to May 2020, according to the China Association of China Futures Association.

Although Zhongtai attributed the loss to the market and the epidemic, according to people in the industry, Zhongtai, which focuses on vehicle research and development, manufacturing and sales, has something to do with the decline in sales and operational difficulties caused by product problems.

The days of lack of money are really difficult, and Zhongtai Motors has also encountered collective salary demands from employees many times. According to several media reports, Zhongtai Motor has been exposed for several times that it is in arrears since 2020. After several months of arrears of wages, Zhongtai Motors even launched a plan to give employees a year off, allowing employees to stay on duty until the end of the year.

In this Zhongtai announcement, Tianchi International Accounting firm listed Zhongtai's "five sins": Zhongtai Automobile has difficulties in operation, lack of funds and stagnant production and operation; has large capital exchanges with some suppliers, and the amount of annual payment exceeds the total amount of annual orders; major asset purchases lack of investigation and feasibility studies; external guarantees fail to perform review and disclosure procedures. Employees' salary and social security expenses are not paid on time, a large number of employees leave or are not on duty, key internal control functions are absent, organizations can not operate normally, there are major defects in the internal control environment, lack of internal supervision.

The technical strength of Zhongtai Automobile is weak, the old models have been unable to upgrade the national six standards for a long time, and the development of new models has been slow. Now the production base has been exposed that the holiday has been postponed. In the current environment of intensified reshuffle in the automobile industry, Zhongtai Automobile is teetering in the market. according to the current performance of Zhongtai Automobile in the market, it is only a matter of time before it collapses completely.

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