Manufacturing industry is waiting to return to work

category:Finance
 Manufacturing industry is waiting to return to work


In recent years, the development of Wuhan Automobile manufacturing has been accelerating. In 2003, Dongfeng Honda entered Wuhan Development Zone and became the first enterprise with annual output value exceeding 100 billion in Hubei Province, which promoted the development of automobile industry in Wuhan. The arrival of the whole vehicle factory has attracted a large number of state-owned and foreign-funded parts manufacturers to build factories in Wuhan. The head of a second tier supplier of an automobile enterprise told the first financial reporter that he has been engaged in the automobile industry for nearly 20 years, and has been traveling to Wuhan more and more frequently, watching the automobile and other manufacturing industries develop step by step. However, at present, the relevant orders between its company and Wuhan automobile enterprises have been suspended, and the number of enterprises impacted by the whole industrial chain is relatively large.

Short term pressure on Vehicle Enterprises

According to wind data, there are 107 listed companies in Hubei Province, 60 in Wuhan, accounting for nearly 60%, involving more than 10 fields, such as communication, medicine, electronics, machinery, national defense and military industry. Among them, there are 8 communication enterprises, 7 electronic and 7 pharmaceutical enterprises in Wuhan.

According to the data, Wuhan Economic and Technological Development Zone is the most intensive area of automobile factories in the world. Dongfeng Motor (600006. SH), one of the worlds top 500 automobile manufacturers, is the leader of the local automobile equipment manufacturing industry. Around Dongfeng, Wuhan has gathered five automobile enterprises: Dongfeng passenger vehicle, Dongfeng Honda, DPCA, Dongfeng Reno and SAIC GM. In addition, there are more than 500 auto parts enterprises such as Valeo, Delphi, Honeywell, Visteon, etc., with various products, including electronics, body, chassis, gearbox, interior decoration, glass, etc.

Cold winter of car market has been started since 2018. At present, from the 2019 performance forecast and express that have been disclosed by the two cities, the performance of the head car enterprises has not been out of the doldrums. In 2019, SAIC Groups net profit is expected to decrease by more than 10 billion yuan; Changan Automobile (000625. SZ) is expected to lose more than 2.4 billion yuan; FAW Xiali (000927. SZ) is expected to lose more than 1.2 billion yuan; Zhongtai automobile (000980. SZ) is expected to lose more than 6 billion yuan.

In terms of sales volume, the first quarter and the second quarter are likely to be negative compared with the same period last year. From the perspective of supply and demand, car factories and 4S stores will first digest inventory. At present, the resumption time of Dongfeng Motor, Dongfeng Honda and SAIC General Motors in Wuhan is to be determined. No. 10 of the automobile factories outside Hubei Province are basically back to work, which can solve the urgent problem. However, for example, SAIC GM and Dongfeng Honda have huge production in Wuhan base, which are local leading enterprises. The specific impact depends on the end of the epidemic. Person in charge of the aforementioned supplier.

He stressed to reporters that for manufacturing enterprises, the construction period is very important, involving the length of the project, manpower arrangement, raw material procurement, inventory backlog management and other aspects. The delayed order delivery during the shutdown period needs to be made up in advance. The loss of wages, rent, logistics and other losses are inevitable, and the subsequent order delivery will also be affected. The impact of the epidemic on the cost, inventory and profit of the vehicle enterprises may be reflected in the financial statements until the second half of the year. He added.

Expected to stabilize in the second quarter

2020 is regarded as the year when 5g application is expected to be implemented in the industry. The application involves semiconductor, panel, 5g switching, laser and other sub industry chains. It is also another pillar industry in Wuhan - Electronic and optical communication equipment manufacturing.

In the field of display panel, the leading enterprise BOE a (000725. SZ) has a 10.5-generation LCD production capacity (design capacity of 120000 pieces / month) in Wuhan, and Shenzhen Tianma a (000050. SZ) has a 4.5-generation LCD production line and a 6-generation OLED production line. In the laser field, the main enterprises include Ruike laser (300747. SZ), dill laser (300776. SZ) and a large number of other laser industry chain companies.

The share price of Listed Companies in Wuhan fell significantly, and dill laser recorded the largest decline of 20% since the end of the period. The decline in real estate, retail trade, transportation and other industries was the highest.

In the panel field, the city is not closed and BOE is still in normal operation. However, BOE previously said that Wuhan 10.5 generation line will carry out monthly production plan reduction, and it is expected that the progress of capacity release will slow down, which may further aggravate the continuous shortage of supply and demand of global super size display screen in 2020.

On February 2, board chairman of Ruike laser (300747) and other senior executives held an online meeting with representatives of institutional investors such as Soochow securities and bocom Schroeder fund.

According to the minutes of the meeting, the company judged that the operation in the first quarter of 2020 is expected to be affected by the delayed work of the epidemic, but it will start to stabilize and improve in the second quarter. Ruike laser said that at present, the inventory is sufficient. Considering the production needs in 2020, the company started the preparation of raw materials and the output of some semi-finished products in advance. At present, the companys inventory basically meets the production needs in the first quarter. In addition, the inventory of suppliers is also sufficient to meet the companys subsequent production needs. In terms of customer product delivery, we need to keep track of logistics recovery and expect to start normal supply in late February.

In addition, Sante cableway (002159. SZ), which is mainly engaged in tourism, said that the operating revenue of Hubei Province, which was the focus of the outbreak, accounted for 11.28%, 9.67% and 5.30% of the companys total operating revenue in 2016, 2017 and 2018, respectively, showing a downward trend year by year.

The company said it does not rely on the revenue of Hubei Province, but because the current epidemic has not been fully controlled, it is unable to accurately estimate the operation time of each region. The epidemic will have a certain adverse impact on the companys short-term business performance, and the impact on future business performance is still uncertain. The specific impact degree needs to be further evaluated.

Announcement on the impact of the epidemic disclosed by several companies

Of the 60 listed companies, 8 have announced the impact of the epidemic on the companys operation,

On February 5, Wuhan Fangu (002194. SZ) released the voluntary announcement that the new coronavirus epidemic did not significantly affect the companys operation. According to the company, through active response, up to now, the epidemic has no obvious impact on the companys production and operation. In addition, the company has made production and delivery during and after the Spring Festival, with corresponding material inventory reserve; during the Spring Festival, a small number of employees work overtime to cope with the delivery of urgent orders, and the company has taken strict epidemic prevention measures during the overtime period.

Wuhan Fangus main business is R & D, production, sales and service of RF devices and RF subsystems. Its main products are filters, diplexers, RF subsystems, etc., which are applied to the construction of communication networks. The companys main customers are the downstream mobile communication equipment integrators in the communication industry, such as Huawei, Ericsson, Nokia, etc. Wuhan Fangu said that the outbreak will not change 5gs strategic position and long-term development prospects. At present, the company has sufficient book capital and good cash flow.

Jiabiyou (688089. SH) is one of the two listed companies of science and technology innovation board in Wuhan. On February 3, jiabiyou disclosed that at present, the time for Wuhan traffic to return to normal is uncertain, so it is temporarily impossible to predict the impact of the epidemic on the companys production and operation, financial situation and operation results.

It is worth noting that the stock price of Listed Companies in Wuhan, which are well-equipped for epidemic prevention and control, also rose against the market.

In Hubei Province, there are 11 listed companies in the pharmaceutical and biological industry (Shenwan industry), among which Jiuzhoutong (600998. SH) business includes the construction of storage facilities and the development of logistics technology. In the evening of February 1, Kyushu Tong Holding Co., Ltd. participated in assisting Wuhan red cross in repacking materials. By the end of February 6, kyushutongs share price had closed at 17.57 yuan / share, up more than 3%. At one time, it had reached a new high in one and a half years. In addition, on February 3, Mingde Biology (002932. SZ) said on the interactive platform that after the companys research and decision, it would donate the new coronavirus (2019-ncov) nucleic acid detection kit (after obtaining the registration certificate) produced to the medical institutions in Hubei Province for free use, with the number of donations no less than 10000, to fully support the new coronavirus prevention and control campaign. In the future, we will continue to increase the number of donations according to the actual needs of medical institutions in Hubei Province. The company said that affected by the epidemic, at present some employees of the company are unable to return to the company, which has a certain impact on the normal production and operation activities of the company, but has no significant impact. But if the epidemic lasts too long, it will affect the companys production and operation. Source: First Financial Editor: Guo Chenqi, nbj9931

In Hubei Province, there are 11 listed companies in the pharmaceutical and biological industry (Shenwan industry), among which Jiuzhoutong (600998. SH) business includes the construction of storage facilities and the development of logistics technology. In the evening of February 1, Kyushu Tong Holding Co., Ltd. participated in assisting Wuhan red cross in repacking materials. By the end of February 6, kyushutongs share price had closed at 17.57 yuan / share, up more than 3%. At one time, it had reached a new high in one and a half years.

In addition, on February 3, Mingde Biology (002932. SZ) said on the interactive platform that after the companys research and decision, it would donate the new coronavirus (2019-ncov) nucleic acid detection kit (after obtaining the registration certificate) produced to the medical institutions in Hubei Province for free use, with the number of donations no less than 10000, to fully support the new coronavirus prevention and control campaign. In the future, we will continue to increase the number of donations according to the actual needs of medical institutions in Hubei Province.

The company said that affected by the epidemic, at present some employees of the company are unable to return to the company, which has a certain impact on the normal production and operation activities of the company, but has no significant impact. But if the epidemic lasts too long, it will affect the companys production and operation.