AutoBeta(AutoBeta.net)07/08 Report--

On July 7, a document about Tieniu Group entering bankruptcy liquidation was circulated online and was signed by the Human Resources and Social Security Bureau of Lin'an District, Hangzhou. The contents of the document show that because the headquarters of Tieniu Group has confirmed that it has entered the bankruptcy liquidation procedure, Zhongtai Automobile and the Group headquarters have not paid their employees' wages for seven consecutive months. In order to protect the legitimate rights and interests of the temporary staff of Zhejiang Zhongtai Automobile sales Co., Ltd., the salary settlement list of employees by the end of June 2020 is now publicized.

But just a day later, events reversed. On July 8, the Human Resources and Social Security Bureau of Lin'an District of Hangzhou issued a notice again, saying that in the "public notice" posted at the adjacent office of Zhejiang Zhongtai Automobile sales Co., Ltd on July 7, 2020, it was false news that the headquarters of Tieniu Group (the major shareholder of Zhongtai Automobile) had entered the "bankruptcy liquidation procedure", which was released by the handling staff without strict verification. The "publicity" has been withdrawn as soon as possible.

Although the rumors of bankruptcy and liquidation of Tieniu Group were proved to be false, the operating situation of Tieniu Group on that day was indeed not very optimistic. According to relevant data, in 2018, Tieniu Group's operating income fell 27.82% to 22.01 billion yuan, and net profit dropped 22.47% to 616 million yuan. In the first half of 2019, operating income fell 37.28% to 8.256 billion yuan, and net profit fell 160.39% to 125 million yuan.

According to the data, Tieniu Group, which was founded in 1992, holds 38.78% of Zhongtai Automobile, making it the largest shareholder of Zhongtai Automobile. In April 2017, Jinma shares controlled by Tieniu Group bought Zhongtai Automobile for 11.6 billion yuan, injected its assets into the listed company, and completed the restructuring and listing after officially changing its name to "Zhongtai Automobile".

In August 2019, Zhongtai Automobile planned to buy back 468 million shares of Zhongtai Motor held by Tieniu Group for 1 yuan, but the performance promise compensation could not be completed for a long time because the shares held by Tieniu Group were judicially frozen and pledged.

This caused dissatisfaction among investors, to which the Shenzhen Stock Exchange sent a letter of concern to Zhongtai Motor. On March 2, Zhongtai Motor responded that as Tieniu Group's stake is still 100% restricted, Tieniu Group still has some difficulties in fulfilling its 2018 performance commitments, and its solution is to complete compensation through land acquisition and storage and real estate income when necessary. However, given that Zhongtai Motors continues to expand its losses in 2019, Tieniu may not have that much real estate to sell.

Zhongtai Automobile restructuring listing or "thunderstorm" cause. Figures show that Zhongtai sold 166000 vehicles in 2014, about 220000 in 2015, and more than 330000 in 2016, the best performance in Zhongtai's history. After Golden Horse acquired Zhongtai Motors, Zhongtai Motor sales began to decline sharply. Zhongtai car sales fell to 317000 and 154800 in 2017 and 2018, and again to 116600 in 2019.

On June 22, Zhongtai Motor disclosed its 2019 financial results. The annual report showed that Zhongtai Automobile'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. However, what is more surprising than the huge loss is that Zhongtai Motor stated in its annual report that director Lou Guohai could not guarantee the authenticity, accuracy and completeness of the annual financial report. The reason is that in view of the greater uncertainty in 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 lawsuits and guarantees.

In addition, Zhongtai Motors said that Zhongtai Automobile shares will be suspended for one day on June 23 and resume trading on June 24, 2020, and will begin to be dealt with by "delisting risk warning". The short name of the stock will be changed from "Zhongtai Automobile" to "* ST Zhongtai".

Zhongtai Automobile can also be regarded as a veteran automobile manufacturer in China, which has been established for more than 20 years and has witnessed the whole stage of the development of China's automobile industry. However, in these 17 years, Zhongtai Automobile did not pay attention to the research and development technology reserve, but focused on the appearance design, resulting in its terminal competitiveness in the domestic brand is getting weaker and weaker, facing the situation of delisting.

In fact, no matter whether Tieniu Group goes bankrupt or not, Zhongtai Motor's current operating condition is not very optimistic, but if Tieniu Group goes bankrupt and liquidated, it may accelerate the pace of Zhongtai Motors delisting.

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