Face risk of delisting
Changhe Motors will be owned by Singapore Airlines, but the impoverished *ST Changhe will sign a "selling deed" of more than $100 million in recent days. On June 10, *ST Changhe announced the sale of assets announced that: the company to the controlling shareholder of China Aviation Science and Technology Industrial Co., Ltd. (hereinafter referred to as: China Aviation Engineering), a wholly-owned subsidiary of Jiangxi Changhe Aviation Industry Co., Ltd. (hereinafter referred to as: Changhe Aviation ) Sale of some assets (buildings and machinery and equipment). After negotiation, the assessed value of the assets as of December 31, 2007 as of the evaluation reference date was RMB 107,435,800 as the transaction price.
Loss for 2 consecutive years * ST Changhe faces risk of exit from the market
Analysts believe that Changhe Automobile sells its assets. One condition is the consolidation of the property rights relationship of AVIC. The other is self-help. Changhe Automobile Development needs more funds.
Benefiting from the large-aircraft project, Changhe Motors will be owned by Singapore Airlines, which has caused the stock price of *ST Changhe, which has been poorly performing, to soar in the previous period. However, short-lived, on April 23, *ST Changhe fell to the lowest point in history, dropping to 3.84 yuan. Starting from June 10, the Shanghai Composite Index fell nearly 200 points, and *ST Changhe also crashed. On the 11th, *ST Changhe's price per share opened at 4.84 yuan, to close at 4.96 yuan, once chased up to 5.25 yuan at noon, showing a strong rebound, becoming one of the 208 minority stocks on the day. This was due to the announcement of the sale of over 100 million assets to Changhe Aviation announced by Chang Chang River on the previous day.
Changhe Auto’s operating income in 2007 was 1.245 billion yuan, a decrease of 47.60% compared to 2006; earnings per share were -1.43 yuan, a decrease of 160% compared to 2006; and annual loss was 577 million yuan, an increase of 146.19% from the 2006 loss. (The loss in 2006 was 226 million yuan). The performance of Changhe Auto has affected the controlling shareholder AVIC. Due to the unfavorable operation of the entire vehicle business and the significant decline in its performance, the net loss attributable to equity holders of AviChina Technology Co., Ltd. expanded to 1.026 billion yuan, which was only 331 million yuan in 2006.
* Changhe Changhe has demonstrated a loss momentum for the second consecutive year. According to the SSE regulations, if STC continues to lose money for two consecutive years, 2009 ST Changhe will face the risk of delisting. ST Changhe, whose stock prices have been soaring, is optimistic about the stock market because of the news that Changhe Automobile has been consolidated.
With the exposure of Dongfeng's acquisition of Hafei Automobile at the end of last year, as the automotive asset of China Aviation Engineering, the trend of Changhe Automotive has been the focus of attention in the industry this year. On the other hand, the market once reported that Changhe Automobile will be purchased by BAIC Group or Changan Group. However, in early March and mid-April of this year, Changhe Automobile has issued clarification announcements, saying that they did not make contact with BAIC Group or Changan Automobile on the acquisition.
On May 6, Changhe Automobile General Manager Zhou Shining stated that Changhe Automotive will enter the group with the establishment of “ShangHai General†and the ownership of Changhe Auto will come to an end. However, on May 11th, the giants of AVIC Group and AVIC Group held the "ShangHai Airlines General Meeting". There was no integration of automobile companies in the middle. According to outsiders, "the integration of aviation business of the two major groups has been very difficult, and as a continuous loss of automobile companies can only reach the end."
At the end of March this year, at the site of the new Liana listing, Li Yao, Chairman of Changhe Automobile, sincerely analyzed the three major causes of Changhe’s troubled vehicles when he was interviewed by the New Express: a single type of product and sales “will only not sellâ€. The cost control is relatively weak. He also said that since the new leadership team took office in August last year, the current product adjustment has been basically put in place, and the control of sales and costs is also being improved in an orderly manner.
Despite this, industry insiders are concerned about Changhe's prospects. Due to the lack of complete product lines, technical R&D, and marketing capabilities, Changhe Automotive is in a weak position in many auto market battles. Due to the loss for two consecutive years, Changhe Automobile's cash flow problem is very tense. This is an important reason why Changhe Automobile has repeatedly sold “household productionâ€. In March 2007, Changhe Automobile sold its assets to Jiangxi Changhe Suzuki Automobile Co., Ltd., a holding subsidiary of the company, and negotiated a price of RMB 168 million to sell the equipment and plant assets.
In view of Changhe’s self-salvage, it ended in failure. Senior automotive analyst Jia Xinguang believes that the best prospect of Changhe Automobile is to merge into Changan Group or BAIC Group.
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