"Automotive Business Review" reporter Liu Shanshan's losses have always been a big mountain weighing on FAW Xiali. It is worth noting that FAW Xiali has put forward transaction conditions for the transfer of Huali Automobile: First, the transferee must promise to return Huali Aut

The new car-making force that lacks production qualifications has undoubtedly become the "best candidate" to take over Huali Automobile.

"Automotive Business Review" reporter Liu Shanshan

Loss has always been a big mountain weighing on FAW Xiali's head.

In September 2017, FAW Xiali publicly transferred its controlling stake. In November, the company's controlling shareholder, China FAW Co., Ltd., decided to terminate the public solicitation because the public solicitation period had expired and no transferees meeting all the qualifications had been solicited.

8 months later, FAW Xiali issued another equity transfer announcement. This time the transfer object became 100% controlling stake of its subsidiary Huali Automobile.

html On July 19, FAW Xiali issued an announcement stating that the board of directors decided to transfer its wholly-owned subsidiary Tianjin FAW Huali Automobile Co., Ltd. to an external party at a price of no less than 1 yuan.

It is worth noting that FAW Xiali has put forward transaction conditions for the transfer of Huali Automobile: First, the transferee must promise to return Huali Automobile’s arrears of no less than 800 million yuan to FAW Xiali Automobile. On this basis, , Huali Automobile’s other arrears due to FAW Xiali are exempted; secondly, in principle, all employees of Huali Automobile will be resettled by FAW Xiali; thirdly, the above equity transfer price does not include the land and real estate of Huali Automobile; fourthly, the affected The transferor must not be the person subject to execution for breach of trust.

has been evaluated by Beijing Zhonglin Asset Appraisal Co., Ltd., taking June 30, 2018 as the base date, the total equity of Huali Automobile shareholders is approximately -962 million yuan.

FAW Xiali said that if the transfer of 100% equity of Huali Automobile is successful, the scope of the company's consolidated statements will change. Huali Automobile's land and properties will be transferred to FAW Xiali, and the arrears repaid by the transferee will mainly be used to supplement working capital. , this equity transfer will help increase the company's profits, improve cash flow, and reduce financial expenses.

The unavoidable loss

Whether it is the transfer of FAW Xiali's controlling interest in 2017 or the current transfer of 100% controlling interest in Huali Automobile, what cannot be avoided is the fact that FAW Xiali is losing money, which makes its corporate capital chain always stretched.

html On July 14, FAW Xiali released its performance forecast for the first half of 2018. The

announcement shows that FAW Xiali’s net profit attributable to shareholders of the listed company is expected to suffer a loss of 600 million to 670 million yuan. The loss of 686 million yuan in the same period last year was almost at the same level.

Regarding the reasons for the change in performance in the first half of the year, FAW Xiali stated in its announcement: "During the reporting period, the company launched the new Junpai A50 sedan and Junpai CX65 crossover hatchback, which are still in the market promotion period, and sales volume and There is a gap between the expected targets and product profitability is still weak. "

According to FAW Xiali's production and sales report for the first half of the year, FAW Xiali sold a total of 13,000 vehicles in the first half of this year.

Among them, the cumulative sales volume of the Xiali model was 0, a total decrease of 4,743 units compared with the previous year; the cumulative sales volume of the Wei series was 600 units, a decrease of 736 units compared with the previous year; the cumulative sales volume of the Junpa series was 12,407 units, an increase of 6,978 units compared with the previous year.

Although the overall sales volume was lower than expected, with the support of the Junpai series, FAW Xiali's cumulative sales increased in the first half of the year, with a year-on-year increase of 8%.

It can be seen that the Junpai series has become the mainstay of FAW Xiali's sales.

Data shows that the sales volume of Junpai series has accounted for 91% of the total sales volume. But this is far from FAW Xiali's expectations. At the same time, Junpai sales have also shown a downward trend. In June, a total of 1,244 units of the Junpai series were sold, down 11.77% year-on-year. This was the first monthly sales decline since 2018.

"Returning to the mainstream market" is a goal that FAW Xiali has emphasized many times. However, with the investment in multiple new products, this wish has always been difficult to achieve.

In fact, FAW Xiali has been losing money for several years.

In 2013 and 2014, FAW Xiali suffered losses, with losses reaching 480 million yuan and 1.66 billion yuan respectively. In 2015 and 2016, it achieved profits by selling equity, and the net profits attributable to shareholders of the parent company were 18.05 million yuan respectively. and 160 million yuan. In 2017, it suffered losses again, with losses as high as 1.64 billion yuan.

If non-recurring gains and losses are deducted, the company has been losing money since 2012, losing money for 6 consecutive years, and the amount of losses is also expanding.

is eager to get rid of the "burden"

Facing the current situation of increasing losses, divesting "bad assets" has become a top priority for FAW Xiali.

data shows that FAW Huali was founded in 1965. It mainly produces jeeps , 130 series light trucks, 1010 mini trucks and 6320 series mini buses. The mini cars produced by FAW Huali reached the world's advanced level at that time. level.

However, after FAW Xiali acquired FAW Huali in 2008, operating income has been sluggish.

From 2015 to 2017, FAW Huali's operating income was 94.75 million yuan, 65.35 million yuan, and 45 million yuan respectively. As of June 30, 2018, FAW Huali's operating income was only 19.29 million yuan.

It can be seen from the data that FAW Huali's income has plummeted in recent years. The operating income in the first half of this year was only more than 10 million yuan. If this development continues, it will be a high probability that this year's annual income will not be as high as in previous years.

Since FAW Xiali has continued to suffer losses before, the completion of this equity transfer is expected to increase the company's profits and losses in terms of the listed company's consolidated statements.

Huali Automobile also had its glory days, and at its peak it was included in the list of the top 500 companies in the country.

However, after being acquired by FAW Xiali, the long-term losses and liquidity pressure made it breathless. At this time, the transfer of Huali Automobile can indeed solve a problem of FAW Xiali and no longer increase the burden of its annual losses. , but in the face of FAW Huali and its huge arrears, which have been gradually delisted, it is not easy to find a successor.

The successor is a mystery

In this regard, there are different opinions on who will take over Huali Automobile, and the new car-making force that lacks production qualifications has undoubtedly become the "best candidate."

The one with the highest voice is Byton Motors.

After all, since April 20, Byton and FAW have begun to sign a series of cooperation.

html On April 20, FAW Group and Byton signed a strategic cooperation investment framework agreement. According to the agreement, FAW will participate in Byton’s Series B financing as a strategic investor. In the future, the two parties will also cooperate in areas such as product development, production, sales and services.

html On June 11, Byton announced the opening of its Nanjing headquarters and announced the completion of a US$500 million Series B financing. Byton’s Series B financing includes investment institutions such as FAW Group, TusHoldings, CATL and Jiangsu “Belt and Road” Investment Fund.

Less than a month after the announcement of financing, Byton and FAW Group signed a strategic cooperation framework agreement in Nanjing. The two parties announced that they would carry out a series of cooperation in platform technology, investment and shareholding, and parts procurement.

When a reporter from "Automotive Business Review" interviewed Byton Motors, he revealed that the two parties would not rule out cooperation in production qualifications in the future.

In response to the Huali Automobile equity transfer incident, the reporter once again contacted Byton officials. "It is not convenient to give any comment or reply at this stage. The cooperation with FAW will disclose the details at the appropriate time." Its staff said.

Although Byton seems to be the most likely to take over, other new car-making forces without production qualifications cannot be excluded.

After all, due to the current policy's strict restrictions on fuel vehicle manufacturing qualifications and the suspension of approval of new energy vehicle manufacturing qualifications, vehicle manufacturing qualifications are very attractive to new entrants to the automobile market.

Because of this, although FAW Xiali's transfer announcement stated that the equity transfer does not include personnel, land and factories, its car-making qualifications worth 800 million yuan are also a huge temptation for many new entrants.