AutoBeta(AutoBeta.net)05/20 Report--

Foton Motor (600166) released the announcement of performance pre-loss in 2018, which shows that the net profit after deducting non-recurring profit and loss is about-3.8 billion yuan. According to CRRC statistics earlier, Foton Motor made a total profit of 3.6 billion yuan in the past six years from 2012 to 2017, and the company's loss in 2018 is almost equal to the total profit of the previous six years.

Fukuda responded to the huge loss of 3.6 billion, citing Bowo's central passenger car business as the main reason for the loss. Since its listing in 2016, Bowo's net profit has been-484 million,-985 million and-2.545 billion yuan respectively, with losses increasing year by year. Bowo's loss in 2018 accounted for 70% of Futian Motor Co., Ltd., due to the decline in sales and the increasing intensity of the market as a result of the downturn in the passenger car market, and the increase in advertising promotion fees compared with the same period last year. The amount of financing for the current period increased compared with the previous year, but the financial expenses increased compared with the same period last year, resulting in a decrease in profits compared with the same period last year.

In addition to the Baowo factor, Foton Motor lost about 400 million yuan in the first quarter of 2019, compared with about 600 million yuan in the same period last year. Foton Motor sold assets to reduce the loss. According to Foton Motor's 2018 annual report, the company's revenue last year was 41.054 billion yuan, down 20.61 percent from the same period last year; its net profit was 3.575 billion yuan, compared with 112 million yuan in the same period last year; and the net profit after deduction was 4.184 billion yuan. It should be noted that Bowo lost 2.545 billion yuan. Fukuda Company achieved negative net profit for the fifth consecutive year from 2014 to 2018, with a cumulative loss of 6.618 billion yuan.

Fukuda's prospects are not optimistic, and investors do not seem to blame it. In 2017, Foton Motor's operating income was 51.7 billion yuan, an increase of 11.13% over the same period last year. The net profit attributed to shareholders of listed companies was 112 million yuan, down 80.25% from the same period last year. After deducting expenditure losses, the net profit attributed to shareholders of listed companies was 830 million yuan. If the timeline is extended, it can be found that Foton Motor's main business has suffered huge losses for four consecutive years. This can be seen in the government subsidies of Foton Motor in recent years. According to the financial report, Foton Motor received a total of 2.15 billion yuan in government subsidies in the past three years, while its total book profit in the same period was only 1.08 billion yuan. In 2017, Foton Motor also made a profit of 570 million yuan from "transactional financial assets", while its 2017 results reflected a strange phenomenon: operating income increased while net profit declined. In fact, Foton's product sales have been growing over the past two years, and Foton seems to have entered a strange circle: the more it sells, the more it loses. The poor performance led investors to question the management ability of Foton's management, and the share price fell all the way. Fukuda Motor's "inaction" made investors more angry, and the stock market fluctuated obviously under the influence of the external environment. Many listed companies have adopted the method of increasing their shareholding. However, it is clear that Fukuda has no intention, which also adds to investor disappointment. Not only that, Fukuda Motor has also been questioned about the falsification of financial data and excessive executive pay. Some investors believe that Fukuda has fallen into a situation of "loss of state assets".

Of course, the development of Bowo has become the focus of investors. Fukuda suffered a huge loss in 2018, equivalent to the combined profits of the previous six years. After selling a 67% stake in Bowo, Fukuda put its center in a commercial vehicle.

Referring to Foton's earlier quarterly report, it is not surprising that Foton caused huge losses in 2018. While passenger cars caused huge losses, sales of Foton's commercial vehicles and engine products also decreased. Foton's December production and sales figures show that Foton's engines are down 14.22% compared with the same period the year before, and commercial vehicles are down 6.33%. Fukuda Motor reported in its 2018 interim report: "the gap between microcards is very large, the competitiveness of old products is insufficient, and the investment of new products lags behind, which has a great impact on the market." Foton Motors said in an earlier interview that Foton Motors has entered a large-scale transition period in recent years. The R & D cost of Foton Motor reached 940 million US dollars, tripling the expenditure compared with the same period last year. According to relevant sources, after the sale of Bowo, Foton Motor has refocused on the commercial vehicle business, which also helps to improve its profit level. In this regard, whether Foton Motor can make a breakthrough in the strategic direction remains to be tested.

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