Recently, a investment announcement from Liuhe Law Firm brought Dongfeng Yulon, which had been silent in the reorganization for a long time, back to the public's vision.
According to relevant media reports, Dongfeng Yulon will re-recruit car companies as investors according to the reorganization of judicial procedures. If the recruitment work goes well, the reorganization will be completed in October this year, and if it doesn’t go well, it will be postponed to January next year.
According to the "Dongfeng Yulong Automobile Co., Ltd. Investment Notice" (hereinafter referred to as the "Announcement"), Dongfeng Yulong manager put forward seven basic requirements for the intended investors, such as "the investment project is based on the research and development, production and sales of new energy vehicles in " and "Two or more investors can jointly participate in the investment, but at least one investor must meet the above conditions" and so on.
public information shows that on April 29 this year, the Hangzhou Intermediate People's Court of Zhejiang Province ruled to accept the bankruptcy reorganization application filed by Dongfeng Yulon. According to the designation of the Hangzhou Intermediate People's Court, Zhejiang Liuhe Law Firm serves as the administrator of Dongfeng Yulong Company (formerly the agent).
In fact, this is not the first time Dongfeng Yulong is looking for investors. For Dongfeng Yulon, who has almost no sense of existence, it has been unhappy since it declared bankruptcy and reorganization.
"China Merchants Road" is not smooth
In November last year, Dongfeng Yulong launched the pre- restructuring program and listed on Beijing Property Exchange . At that time, the industry rumored that Yulon Group might cooperate with Foxconn . According to the statement at that time, Foxconn took a fancy to Dongfeng Yulon's production qualifications and hoped to use Dongfeng Yulon to pave the way for the production and sales of its electric car in mainland China.
I thought Dongfeng Yulong would take this opportunity to usher in the dawn, but soon after, Foxconn's parent company Hon Hai Group responded to the public that Hon Hai Group or Foxconn had nothing to do with Dongfeng Yulong's pre-reorganization investment and would not intervene. After Foxconn clarified the "scandal" of "Foxconn", Dongfeng Yulong said that the registration period is still being announced and no companies have registered yet.
After the first investment promotion failed, just as Dongfeng Yulon's prospects were confusing, in March this year, news about its investment promotion appeared in the public eye again. The website of Zhejiang Liuhe Law Firm issued a Dongfeng Yulong investment promotion announcement on the 10th of that month. The announcement stated that in order to achieve the effective integration and sustainable development of Dongfeng Yulon Company's high-quality assets, the temporary manager conducts public investment in accordance with relevant provisions of the pre-restructuring procedure.
As a result, Dongfeng Yulong was not favored. Then the third round of investment was launched by Dongfeng Yulong. This round of investment has put forward seven requirements for new investors. The summary point is that if the investor is an automobile company, the reorganized company must develop in the direction of new energy vehicles.
It is worth noting that during the three investment promotions, Dongfeng Yulong will focus on new energy vehicle projects. Obviously, Dongfeng Yulong also wants to seize the opportunity of transformation. In fact, Dongfeng Yulong proposed in 2019 to increase the investment in new energy products market. Not enough, the project was not implemented later.
Who can "turn waste into treasure"?
How did Dongfeng Yulong reach the point where bankruptcy reorganization is difficult but investment investment is difficult?
In 2010, Yulong Group and Dongfeng Motor officially established Dongfeng Yulong Auto Company, each of which accounted for 50% of shares and launched the Nazhijie brand. The emergence of Nazhijie is in the "hot period" of domestic SUVs, and Dongfeng Yulon also ushered in a short-term glory with this "eastern wind". Data shows that in 2015, Nazhijie's sales once reached 60,000 units per year. After a brief glory, Nazhijie's sales began to decline significantly in the second year.
Faced with the continuous decline in sales, Dongfeng Yulong shareholders increased their capital in 2017 and planned to invest another 2 billion yuan in the development of Nazhijie brand and product. However, a series of measures have failed to curb the decline in sales of Nazhijie.
In 2018, Nazhijie's annual sales fell to 7056 units, and fell by 61% year-on-year compared with in 2017; in 2019, Nazhijie's annual sales were only 1947 units, a year-on-year decrease of 72.4%; by 2020, the sales in the first half of the year were only 65 units.At the same time, Dongfeng Yulong shareholder Yulong Auto 2021 third quarter report shows that from January to September 2021, Dongfeng Yulong lost about NT$961 million (approximately RMB 214 million). Then Nazhijie's reputation basically flooded the entire automobile market.
has data showing that as of now, Dongfeng Yulon's liabilities are about 7 billion yuan, and the valuation of assets is still uncertain.
Judging from the existing resources of Dongfeng Yulon, it is not without attractiveness. In the reorganization announcement released by Liuhe Law Firm, it was introduced that Dongfeng Yulon not only has multiple workshops, R&D centers and bonded warehouses including test runways, emission performance laboratories, regulations and power laboratories, vehicle VOC testing laboratory, vehicle garage room, new energy laboratory, new car trial production workshop, three coordinate rooms, as well as the ability to have an annual capacity of 120,000 vehicles, but also masters the three key technologies of electric vehicle production, motor, electronic control, and battery energy storage.
Geographical location, Dongfeng Yulong has unique advantages. Located in the Yangtze River Delta region, especially the Qiantang New District gathers more than 100 auto parts manufacturers, including Magna, Mainland, Lier , and a group of parts manufacturers such as Zhongce Rubber and Magna, forming a complete industrial chain .
Despite this, industry insiders are not very optimistic about its investment. Some analysts pointed out that judging from Dongfeng Yulon's actual operating conditions, it is difficult to be regarded as a high-quality investment target. Some analysts also pointed out that the greatest value of Dongfeng Yulon lies in its production qualifications and factories, but subsequent development still cannot escape a large amount of financial support.
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