AutoBeta(AutoBeta.net)10/15 Report--

FAW Car owns two passenger car brands, FAW Pentium and FAW Mazda respectively. According to the performance forecast released today, FAW Car has fallen into loss again.

FAW Car's latest performance forecast shows that the company expects a net loss of 236 million yuan to 296 million yuan in the first three quarters of this year, from profit to loss.

As for the reasons for the performance change, FAW Car said that from January to September 2019, the sales volume of domestic passenger car market declined, and the sales volume of the whole vehicle of the company decreased. Influenced by factors such as the switching of five countries and six countries, the price rise of precious metal market and the fluctuation of Japanese yen exchange rate, etc., the operating income, gross profit rate and other indicators of the company decreased year-on-year. In addition, the investment income confirmed for the participating enterprises decreased, resulting in a significant decrease in the performance during the reporting period.

It is worth noting that the profit of FAW car in the first half of the year was positive, recording 9.6404 million yuan, and the estimated loss in the third quarter alone was 246 million yuan to 306 million yuan.

Government subsidies cushion performance losses. On the same day, FAW Car issued an announcement saying that the company obtained a subsidy of RMB 100 million yuan from Changchun Automobile Economic and Technological Development Zone, which was specially used for FAW Pentium brand R & D and independent innovation projects. FAW Car said that the subsidy is not sustainable, and the government subsidy obtained this time is expected to increase the company's total profit in 2019 by 100 million yuan.

Profits are getting harder. FAW Car achieved profits in 2017 and 2018, but profits continued to decline. Among them, the net profit of FAW cars in 2018 was 155 million yuan, down 44.88% compared with 2017.

According to the data, FAW Pentium accumulated sales volume from January to August reached 59134 vehicles, with a year-on-year growth of 14.4%. Pentium brand formed B series cars, X series and T series SUV models. At present, only Pentium T77 is a hot model. FAW Mazda has declined for several consecutive months, with sales of 53887 vehicles in the first eight months of this year, down 28.8% year-on-year.

FAW car 27 billion restructuring plan approved by SASAC. On September 27, FAW Car Co., Ltd. issued an announcement saying that the State-owned Assets Supervision and Administration Commission of the State Council had agreed in principle to the overall plan of the company's asset restructuring and supporting financing.

The reorganization plan announced by FAW Car shows that the company takes all assets and liabilities except the equity of finance company and Xin 'an Insurance and part of retained assets as assets to be purchased, and replaces the equivalent part of FAW Jiefang's 100% equity after partial asset adjustment held by FAW shares. FAW Pentium 100% equity price of 5.088 billion yuan, FAW Jiefang 100% equity price of 27.009 billion yuan, the difference between the two is 21.921 billion yuan, of which 19.921 billion yuan consideration is paid by FAW car in the form of 6.68 yuan/share issuance shares, the rest consideration is paid in cash, FAW car plans to raise no more than 3.5 billion yuan at the same time.

The main purpose of this scheme is to solve the same industry competition problem between FAW Car and FAW Xiali, which has been puzzling for eight years. Through asset restructuring, the main business of FAW Car, a listed company, will be changed from R & D, manufacturing and sales of passenger cars to R & D, manufacturing and sales of commercial vehicles. In the future, the profitability and asset scale of the embedded assets are expected to be further improved, providing guarantee for the sustainable operation of FAW Car.

For FAW car, which is still dominated by passenger cars at present, it is the main task to get rid of loss-making operation, promote the development of independent brand galloping and strengthen its own hematopoietic ability.

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