AutoBeta(AutoBeta.net)12/09 Report--

On the evening of December 9, Zhongtai Automobile issued a notice on the acceptance and reorganization of a wholly-owned secondary subsidiary by the court, which said that Zhongtai Automobile Co., Ltd. (hereinafter referred to as "Zhongtai Automobile") recently received a "Civil order" issued by Zhejiang Yongkang people's Court (hereinafter referred to as "Yongkang Court"). Learned that Yongkang Court ruled to accept the reorganization of Zhejiang Zhongtai Automobile Manufacturing Co., Ltd. (hereinafter referred to as "Zhongtai Manufacturing"), a wholly-owned second-class subsidiary of the company.

According to the contents of the announcement, Jinfeng Technology (Shenzhen) Co., Ltd. applied to the Yongkang Court for bankruptcy liquidation of Zhongtai Manufacturing on the grounds that Zhongtai Manufacturing could not pay off its maturing debts and its assets were insufficient to pay off all its debts. Zhongtai Manufacturing objected that it was possible to restructure, hoping to rule on its reorganization. Yongkang Court held a hearing to listen to the views of both sides. Jinfeng Technology (Shenzhen) Co., Ltd. expressed no objection to the reorganization of Zhongtai Manufacturing.

According to Tianyan check information, Zhejiang Zhongtai Automobile Manufacturing Co., Ltd. is 100% owned by Yongkang Zhongtai Automobile Co., Ltd., which is a wholly-owned subsidiary of Zhongtai Automobile Co., Ltd., so it indirectly holds 100% of Zhongtai Manufacturing.

Zhongtai Motors said that if the restructuring is successful, Zhongtai Manufacturing will become an important source of profits for the company. If Zhongtai Manufacturing reorganization fails and turns into bankruptcy liquidation, Zhongtai Manufacturing will no longer be included in the scope of the company's consolidated statements.

In fact, Zhongtai Motor and its subsidiaries have been liquidated and restructured this year. At present, in addition to the reorganization of Zhongtai Manufacturing, Zhongtai New Energy Automobile Co., Ltd., Hunan Jiangnan Automobile Manufacturing Co., Ltd., Hangzhou Jiereng Power Co., Ltd., Hangzhou Yiwei Automobile Industry Co., Ltd., and Zhejiang Zhongtai Automobile sales Co., Ltd., have all been ruled by the court to go bankrupt and liquidated, and even Zhongtai Motor has entered the pre-restructuring debt registration stage.

Zhongtai Automobile used to sell more than 300000 cars a year, and the early Zhongtai Automobile was sought after by consumers with "a tape measure". In 2013, Zhongtai Motors created the T600 model by imitation, which is highly sought after by consumers. In 2014, Zhongtai Automobile became the "dark horse" of the domestic auto market, with sales exceeding 166000 units, an increase of 23.8% over the same period last year. Zhongtai car sales are on the rise, and car manufacturing has become the company's main source of profits.

However, due to the lack of core technology, Zhongtai Motors can not be sold in most areas due to the lack of product reputation and declining sales, and because it is unable to launch models that meet the sixth national emissions. In terms of sales volume, Zhongtai Motor sold a total of 117000 vehicles in 2019, while Zhongtai Motor sold only 1417 cars in the first half of this year, and automobile production and sales basically stagnated. In terms of performance, Zhongtai Motor lost 1.563 billion yuan in the first three quarters of 2020 and 9.294 billion yuan in 2019.

Car companies that once had annual sales of more than 300000 vehicles and a market capitalization of more than 30 billion yuan failed to adjust their development direction and product advantages in time, resulting in sales and performance halving and hovering on the edge of the car market. Zhongtai Motors, which is now mired in a whirlpool of factory shutdowns, performance losses and subsidiary liquidation, is obviously in jeopardy, even if it is restructured, there are a lot of development uncertainties.

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