AutoBeta(AutoBeta.net)06/04 Report--

On June 4, the Wechat official account of "China Baoneng" released an article "go all out to promote the sustained and steady development of the group-- Baoneng Group held an office meeting of the chairman of the board of directors." Yao Zhenhua, chairman of Baoneng, presided over an office meeting of the chairman of the board of directors in May at the Baoneng Center. At the meeting, Yao Zhenhua said that at present, the state has launched a series of policies and measures to stabilize the economic market. Manufacturing, real estate, logistics, new energy automobile industry and other fields ushered in development opportunities. As the external situation gradually improves, the Group is confident that the liquidity problem will be solved as soon as possible. Yao Zhenhua stressed that we must cherish the window opportunity and unswervingly promote all kinds of operation and management work, and pointed out that the group is rapidly returning to normal operation, the market is also recovering, and leading cadres at all levels must keep a clear head and seize the opportunity. Go all out to solve the problem.

According to a report by the Financial and Economic World Weekly, so far, Baoneng Group has a total of 75 pieces of information about the person subject to execution, of which nearly 80% of the cases were filed this year, totaling 24.664 billion yuan. The amount of money executed since 2022 is close to 15 billion yuan. However, according to the announcement disclosed by Zhongju Hi-Tech, Baoneng Group had total assets of 830 billion yuan and interest-bearing liabilities of 192.7 billion yuan, including banks, wealth management and trusts, as of the end of September 2021.

As for liquidity, on November 7 last year, Baoneng Group issued an open letter to all employees of Baoneng Group under the name of founder and chairman Yao Zhenhua. In the letter, Yao Zhenhua said: "this liquidity difficulty is unprecedented in the 29 years of Baoneng's development." at the same time, he also pointed out that throughout the entire 29 years of development. This difficulty is not a bad thing for Baoneng, which is about to enter its thirties, but a wake-up call, "reminding us to deeply reflect on the problems in the process of operation and management and how to ensure that we will not repeat the same mistakes in our future development."

According to public information, Baoneng Group was founded in 1992, headquartered in Shenzhen, and its chairman is Yao Zhenhua. In March 2017, Baoneng Group officially entered the automotive industry. in December of the same year, Baoneng Group strategic investment Guanzhi Automobile became a major shareholder, forming a tripartite shareholder holding by Baoneng, Chery Automobile and Quantum. At the beginning of 2018, Baoneng Group acquired a 51% stake in Guanzhi for 6.63 billion yuan, officially becoming the controlling shareholder of Guanzhi Automobile. In January 2019, Baoneng again bought a 12 per cent stake in Quantum for 1.56 billion yuan, increasing Baoneng's stake in Quan to 63 per cent. However, Qoros sales are not ideal. Data show that Qoros sold 63000 vehicles in 2018, an increase of 320% over the same period last year. The main source of sales is that Baoneng won an order of 95000 units for Qoros through its associated car rental company. Since then, Quan Chi car sales have declined year after year.

Yao Zhenhua, chairman of Baoneng Group, announced at the Qoros Automobile Dealer Conference in March 2018 that he would invest 10 billion yuan in new car research and development each year for five consecutive years starting from 2018, and is expected to launch 26 new models by 2022. However, over the past few years, this promise made by Baoneng Group to Guanzhi has failed to reverse Quan Zhi's predicament. According to the data, Qoros sales fell to 22700 in 2019 and again to 13100 in 2020. By 2021, under the influence of many factors, such as internal staff turnover, protection of rights of external suppliers and dealers, and sales failure, its sales have halved again, with sales of only 5200 vehicles in 2021, including zero in July and less than 100 in October and December. And Baoneng, the "big financier" of Qoros, is also unable to protect itself.

In June 2021, Baoneng Automobile Group launched its new luxury intelligent new energy vehicle brand, which is called "Baoneng Automobile" in Chinese and "BAO" in English. According to the plan, the BAO brand will launch at least 16 models within five years, including SUV, sedan, MPV, sports car and other models, gradually covering the high-end electric vehicle market segment, of which the BAO brand will launch two new cars in 2021. In August 2021, Baoneng Group was exposed that a number of expired wealth management products and trust plans were overdue. In response to this matter, Baoneng Group issued a notice acknowledging the fact that it was overdue and said it would complete the full payment by the end of 2021. After the incident, the shortage of funds in Baoneng Group also surfaced, which also led to many problems, such as "layoffs", "social security for severed employees", "closing shops" and so on. Baoneng's manufacturing bases in Kunshan, Jiangsu and Kunming, Yunnan, were shut down because of financial problems. since then, there has also been news that the Baoneng automobile plate has been cut from about 23000 people a year ago to about 8400 people, and the group and direct-run stores are "hardest hit" for layoffs. The proportion of layoffs exceeded 65%, and those who stayed did not receive wages and social security for several months. many problems eventually led to the poor debt situation of Baoneng Group. Yao Zhenhua held a forum in September 2021, saying that Baoneng has invested more than 50 billion yuan since it entered the automobile industry in 2016. The company should strive to build a global first-class new energy automobile enterprise group with strong competitiveness and international influence in 10-15 years. In the face of stagnant factory market, unpaid social security and provident fund, and shrinking service stores, Baoneng Automobile Group still firmly publishes luxury, smart and high-end brand models. But looking back at 2021, Baoneng not only failed to promote the new car release plan in 2021, but was mired in some problems such as "layoffs", "social security for severed employees", funds and so on. In order to alleviate the capital problem, Baoneng Group had to sell assets to "replenish blood".

Since 2022, Baoneng and Qoros have also appeared frequently in the public's field of vision. On January 22nd this year, Baoneng unveiled two new cars at the new car product appraisal conference, one is the GX5 (code name GX16) from the new luxury smart new energy vehicle brand "BAO", and the other is the Guanzhi 6 (code C21) from Qoros.

On March 22, the Guangzhou Municipal Court system notice showed that Yao Zhenhua, chairman of Baoneng Group, was missing. Then, the official account of China Baoneng Wechat said that Chairman Yao Zhenhua was still inspecting the resumption of work and production at Baoneng's Shenzhen plant on March 21. On May 7, the Automobile Circulation Association of Shandong Province issued a document entitled "warning on the consumption of Quan Zhi Brand cars", which contained that the headquarters of Baoneng Group was "empty". The Baoneng Guanzhi automobile brand was included in the consumption blacklist and issued a consumer warning to the vast number of consumers in the province: be careful to buy Baoneng Guanzhi brand cars. In this regard, a number of media to Baoneng Shenzhen headquarters to verify, the other side said that Baoneng Group headquarters has moved to a new site, there will be a "empty building" misreading. As for Baoneng Yao Zhenhua pointed out: "the external situation is gradually improving, the group is confident to solve the liquidity problem as soon as possible" whether this is the case in the end, let's let time tell us the answer.

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