AutoBeta(AutoBeta.net)07/25 Report--

Recently, SAIC Group said to the outside world that it intends to apply for the issuance of corporate bonds of no more than 20 billion yuan (including) in the form of storage shelves, so as to flexibly and efficiently meet the current and future capital needs, and establish a long-term, low-cost, multi-level financing system. It is understood that the funds raised by SAIC's bond issue will be used to supplement SAIC's liquidity, R & D innovation and project construction, as well as other laws and regulations.

In fact, this is not the first time SAIC has raised funds for R & D and innovation. SAIC raised 15 billion yuan in a private offering as early as January 2017. to support its R & D and innovation in projects such as energy conservation and new energy vehicles, fuel cell vehicle forward-looking technology research and development, smart driving car forward-looking technology research and development.

Some people think that SAIC's 20 billion bond issue is a manifestation of the excessive pressure on the group's funds. According to the domestic automobile production and sales data in the first half of 2019, SAIC's total production in the first half of the year was 2.857 million vehicles, down 20.8% from the same period last year, and the total sales in the first half was 2.737 million vehicles, down 16.62% from the same period last year. Due to the weak performance of SAIC's main automotive business in the market, SAIC's operating income fell 16.54 per cent in the first quarter of 2019 from a year earlier, and net profit fell 15 per cent from a year earlier. Under such circumstances, SAIC issued bonds mainly to replenish liquidity in order to maintain the operation of the group's business.

The explanation given by SAIC is that SAIC's asset-liability ratio is at a reasonable and stable level, the company's financial structure is also very stable, and it has a strong long-term repayment ability, and financing through bond issuance is a normal phenomenon in the development of enterprises. the purpose is to increase investment in R & D innovation through financing in order to seek more room for development.

At present, the whole automobile industry is at a low ebb, with both sales and interests falling on the one hand and increasing R & D investment on the other, and the pain of low returns and high investment faced by the automobile industry in the process of transformation. it also makes the overall ranking of automobile and parts companies in the 2019 Fortune Global 500 list down. In such a pessimistic environment, there is nothing wrong with SAIC's financing by issuing bonds. In the future, the competition in the automobile market will become more and more fierce. SAIC will increase its investment in R & D and innovation through this bond issue, which is undoubtedly preparing for the near future.

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat