The market downturn Shaanxi Automotive to transfer 21% stake
March 31, 2023
On July 6, Shaanxi Automobile Group Co., Ltd. (hereinafter referred to as Shaanqi) publicly listed and transferred its holding subsidiary, Shaanxi Automotive Group Wenzhou Yunding Automobile Co., Ltd. (hereinafter referred to as Shaanxi Steam Gending), with a 21% equity, and the transfer price was 1.17 million. Prior to this, Shaanxi Auto held 51% of its shares.
Three years ago, a joint venture with a private company to form a new company was intended to open up the Shaanqi of the medium-heavy truck market in southeastern China. Today, it does not seem to have benefited from it.
According to public information, Shaanxi Steam Gending was listed in June 2009 and was jointly established by Shaanxi Automobile and China Genting Holding Group Co., Ltd. (hereafter referred to as Genting Holdings) to produce medium and heavy trucks. Among them, Shaanxi Auto has invested in the form of brand, technology, after-sales service network, cash investment and other forms, accounting for 51% of the total investment of the project, and Genting Holding holds 49% of the shares.
For the newly formed Shanqi Yunding, Shaanxi Automobile once gave high hopes. Shaanxi Auto plans that, within three years after completion and commissioning, the company will form an annual production and sales scale of 5,000 heavy-duty special-purpose vehicles and 5,000 medium-sized trucks. Within five years, it will achieve production and sales of 20,000 special-purpose vehicles and achieve a sales target of 5 billion yuan.
More importantly, Shaanxi Auto hopes to complete the special car industry layout of the Shaanxi Auto Heavy Truck brand in southeastern China through the new company, thereby expanding the production capacity of Shaanxi Auto's special vehicles and the marketing capacity of the regional market.
"The new company will be based in Zhejiang, Fujian and Jiangxi markets, and will radiate the Jiangsu and Shanghai markets. It is an important part of Shaanqi's strategic layout," said Yuan Hongming, general manager of Shaanxi Auto Group.
However, just three years later, Shaanxi Steam Genting, which has not achieved its business goals, has reached a crossroads.
Information on the official website of the Western China Property Exchange indicated that Shaanxi Automobile had publicly listed on July 6th and transferred 21% of the shares of its holding company Shanqi Yunding. The transfer price was 1.17 million yuan, and the announcement and listing period ended on August 2.
Regarding the above equity transfer, Shaanxi Automobile did not respond positively, but the reporter learned that Shaanxi Automobile's transfer of shares in its company’s shares was due to the continuous decline of Shaanxi Steam’s Yunding’s performance, resulting in the setback of Shaanxi Steam’s heavy-duty truck market in Southeast China.
The details of the 21% share transfer project of Shaanxi Steam Gending obtained by the reporter showed that the company was in a loss state for two years after its establishment.
The above information shows that the registered capital of the company is 40 million, but in 2010 the company's net assets were only 23.47 million, and the loss was 14.54 million yuan, and the debt ratio was as high as 84%. By 2011, the company’s net assets had dropped sharply to 7.9 million, and the loss was 15.56 million. The debt ratio soared to 94%.
For poor performance, Shanqi Yunding Integrated Management Department admitted to reporters, "In recent years, the company's operating conditions are indeed not very good, mainly due to the cold market, product backlog sales did not go out." However, the person in charge of Shaanxi Auto’s transfer of its equity was not aware of this. “Maybe Shaanxi Automobile has its own reasons for consideration.”
In fact, as an important part of Shaanqi’s layout of the medium-heavy truck market in southeast China, the shaky performance of Shaanxi Airlines Yunding has also made Shaanqi’s performance in the Southeast China market challenging.
However, Shaanxi Steam Gending is not an isolated case in the industry. Industry analysts told reporters that under the circumstances where domestic heavy machinery industry is generally cold, many companies have encountered the winter of the industry.
According to the reporter's understanding, in accordance with the original plan of Shaanxi Steam Genting, the company plans to produce 10,000 special vehicles of various types within three years after completion of production. "But in fact, although the company now has such an annual production capacity, it is far from selling. Failed to achieve such a goal," said the aforementioned shaanqi cloud top person.
Shenyang Zhongda Huanxin Refrigeration Technology Co., Ltd.
