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Guanghui Automobile issued the latest announcement, Guanghui Automobile Services Group Co., Ltd. (hereinafter referred to as "Guanghui Automobile") received the "Supervision work letter on matters related to the termination of the listing of Guanghui Automobile Services Group shares and Convertible Bonds" issued by the Shanghai Stock Exchange on July 21, 2024 (Shanghai official letter [2024] No. 1003, hereinafter referred to as the "Supervision work letter").

The contents of the announcement show that Guanghui Motor shares closed at less than 1 yuan a day for 20 consecutive trading days from June 20, 2004 to July 17, 2024. In accordance with articles 9.1.17 and 9.2.1 of the Shanghai Stock Exchange listing rules (revised in April 2024) (hereinafter referred to as "stock listing rules"), Guanghui Automobile shares and convertible company bonds have reached the conditions for termination of listing. The trading of Guanghui automobile stocks and convertible corporate bonds will be suspended from the opening of the market on July 18, and the listing Review Committee of the Shanghai Stock Exchange will, within 15 trading days after the expiration of the relevant time limit for Guanghui Motor's hearing, statement and defense, or within 15 trading days after the conclusion of the hearing procedure, to consider whether to terminate the listing of the company's stocks and convertible bonds, and the Shanghai Stock Exchange shall, in accordance with the deliberations of the listing Review Committee, make a corresponding decision to terminate the listing.

As of July 19, Beijing time, Guanghui Motor had a total market capitalization of 6.466 billion yuan.

On July 19, Guanghui Automobile issued an announcement on the tracking rating results of convertible corporate bonds in 2024. The announcement shows that the previous convertible corporate bond rating: AA+, main rating: AA+, rating outlook "stable"; this convertible corporate bond rating: AA, main rating: AA, rating outlook "negative".

On the verge of delisting, Guanghui transferred control to another company to try to save itself. On July 11, Guanghui Automobile announced that Guanghui Group, the controlling shareholder, had signed a framework agreement with Jinzheng Technology to transfer its shares. The agreement stipulates that Guanghui Group will transfer 24.5% of its shares in Guanghui Automobile to Jinzheng Technology after December 19, 2024, and the control of the company will be changed after the transaction is completed. In other words, Guanghui Motor will usher in a new controlling shareholder. At that time, people in the industry believed that behind Guanghui Motor's proposed change of controlling shares, it was hoped that the new controlling shareholders could return its share price to 1 yuan, eliminating the risk of "face value delisting".

Guanghui Automobile was founded in 2006. Since then, it has acquired automobile distribution companies in Anhui, Chongqing, Gansu, Hebei, Ningxia and Shandong, and became the leading enterprise of national automobile dealers in 2012. Guanghui Motor backdoor Mero Pharmaceutical successfully landed in A-shares in June 2015 and rushed to acquire Baoxin Motor, BMW's largest dealer in China, which has since changed its name to Guanghui Baoxin.

However, with the change of the general environment of the car market and the intensification of competition, even Guanghui Automobile, as the head of car dealers, is facing a decline in performance. According to the financial report, from 2018 to 2020, Guanghui Automobile achieved net profits of 3.257 billion yuan, 2.601 billion yuan and 1.516 billion yuan respectively, with net profit growth rates of-16.27%,-20.16% and-41.72%, respectively. Although net profit increased slightly in 2021 compared with the same period last year, it suffered another huge loss in 2022, with a loss of 2.669 billion yuan, down 265.92% from the same period last year. Guanghui Motor turned from loss to profit in 2023, with annual revenue of 137.998 billion yuan, but net profit of only 392 million yuan, and its share price fell below 2 yuan at the end of 2023.

After entering 2024, the operating condition of Guanghui Motor has not been significantly improved. According to the latest financial report, Guanghui Motor's revenue in the first quarter of this year was 27.79 billion yuan, down 11.49% from the same period last year, and its net profit was 70.9405 million yuan, down 86.61% from the same period last year. It is understood that by the end of the first quarter of this year, Guanghui Automobile's asset-liability ratio reached 61.98%. On July 13, Guanghui Motor issued a forecast of half-year results for 2024, saying that the net profit of returning home in the first half of the year is expected to be-583 million yuan to-699 million yuan.

As one of the largest automobile dealer groups in China, in May this year, the China Automobile Dealers Conference released the "Top 100 Dealer Group list of China's Automobile Circulation Industry in 2024". Guanghui Automobile ranks at the top of the list with revenue of 137.998 billion. Guanghui Automobile ranks first among the top 100 dealer groups with sales of 713467 vehicles. This is the 13th year in a row that Guanghui Automobile has been on the Top 100 Dealer Group list of China's Automobile Circulation Industry. Today, the difficult situation of Guanghui Motor is really sad, but the predicament that Guanghui Automobile is facing is not alone, but only a microcosm of the development of many dealer industries, especially today, the domestic car market is seriously inside the volume, dealers' profit margins have been further compressed, coupled with the far-reaching impact of the "price war" on the automobile distribution industry, most car dealers are having a hard time.

According to the 2023 National investigation report on the living conditions of Automobile Dealers released by the China Automobile Circulation Association, only 27.3% of the dealers have achieved their annual sales targets in 2023. In addition, the proportion of dealers' losses in 2023 was 43.5%, and only 37.6% of dealers were profitable.

In 2024, the completion of dealer sales tasks in the first half of the year also showed obvious differentiation. Among them, 18.4% of the dealers completed the task, 34.8% had a task completion rate of more than 80%, and 13.5% of the dealers had a completion rate of less than 50%. In this regard, the China Automobile Circulation Association said that at present, the pessimism among dealers is spreading, and they are more cautious about the expectation of the automobile market in the second half of the year. It is suggested that dealers should rationally estimate the actual market demand according to the actual situation.

With the increasingly fierce stock competition and the continuous price war, the automobile dealer industry is under collective pressure. in this context, it is worth thinking about how automobile dealers seek change, or how to adapt to the changes of the times.

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