Zhongtai auto was once known as Zhonghua shenche. When buying Zhongtai for 100000 yuan, you can drive a Porsche car, or Baosteel for short. In the peak period, the companys market value reached nearly 37 billion yuan. Today, the companys share price has shrunk from a peak of 18 yuan to less than 2 yuan, and its market value is only 1 / 10 of that at that time.
As a Zhejiang auto tycoon, the actual controller of the company once made Huruns rich list with a wealth of 10 billion yuan. But now, the once richest man in Yongkang, Zhejiang Province, is no longer in sight.
3.6 billion market value
A huge loss of 10 billion yuan in one year
On the evening of June 22, Zhongtai motor released its 2019 annual report.
Financial data shows that in 2019, the company achieved operating revenue of 2.986 billion yuan, a year-on-year decrease of 79.78%; net profit loss of 11.19 billion yuan, a year-on-year profit of about 800 million yuan, a year-on-year decrease of 1498.98%.
It is estimated that Zhongtai motor lost 30.685 million yuan per day on average last year.
The annual report also shows that the net cash flow generated by the companys operating activities in the same period was -5.79 billion yuan, compared with -2.31 billion yuan in the same period last year, a year-on-year decrease of 150.31%; and the basic earnings per share was -5.52 yuan. The company plans not to distribute cash dividends, bonus shares or increase share capital with accumulation fund.
In January this year, Zhongtai motors 2019 performance forecast shows that the company is expected to lose 6-9 billion yuan. In April, the company disclosed the main operating performance in 2019, and the net profit attributable to shareholders of listed companies was - 9.294 billion yuan.
The officially released annual report data shows that it is significantly lower than the previously disclosed major operating results in 2019. As of yesterdays closing, the companys total market value was only 3.609 billion yuan, which means that it lost more than three times its market value in one year.
Production and sales dropped 8-90% year on year
For the sharp decline in revenue and net profit in 2019, Zhongtai Motor said that on the one hand, it was affected by the decline in sales volume.
According to the annual report of Zhongtai motor, in 2019, Zhongtai motor produced 16215 cars and sold 21224 cars. In 2018, Zhongtai motor produced 142952 cars and sold 154844 cars.
For the sharp decline of the companys production and sales in 2019, Zhongtai Motor said that it was influenced by the external environment, the implementation of the companys category strategy and the further focus of products, which was basically consistent with the overall decline trend of the industry and the trend of most companies in the same industry.
In the previous announcement, the company said that in 2019, the companys car making subsidiaries were short of funds, the supply of raw materials was not timely, and some fuel models and new energy vehicles were shut down. Under the influence of many factors such as delayed time to market of new models, sales volume not up to expectations, and sharp decline of subsidies for new energy vehicles, Zhongtai automobile has no six models to put on the market, and has no cars to sell in key provinces such as Guangdong, Chongqing, Henan, etc.
Fake Porsche, Audi, cayenne, etc
2014 is considered to be the year when Zhongtai automobile made its debut. Because of catching up with the golden age of domestic automobile manufacturing, Zhongtai manufacturing soon took the lead. The sales volume of Chinas self owned brand automobile market has been declining for 12 consecutive years, but the annual sales of Zhongtai automobile has exceeded 166000, an increase of 23.8% compared with that in 2013.
The road of Shanzhai goes to the climax. Zhongtais trump brand product, T600, imitates Volkswagen Touareg. In 2015, its sales volume reached 110500 units. At the end of 2016, Zhongtai SR9 sparkles with a highly similar appearance to Porsche Macan. It is said that just three days after its launch, the order broke through 20000, and one car is hard to find, so you need to increase the price to pick up the car! In 2016, the accumulated sales volume of Zhongtai automobile reached 333100, an increase of 50% year on year.
The company has launched cloud 100, T11 and other new energy models at the tuyere, with the subsidy amount close to 60% of the sales price. In 2015, Zhongtais new energy vehicle revenue was 2.19 billion yuan, and subsidies reached 1.14 billion yuan.
In its annual report, Zotye also pointed out another reason for the companys huge losses, namely, business impairment.
According to the annual report, the total amount of provision for impairment of various assets of the company in 2019 is 8.431 billion yuan, including 6.12 billion yuan of provision for impairment of goodwill. In other words, Zhongtai automobile, with a market value of only 4 billion yuan, has accrued 6.2 billion yuan of goodwill.
How is the huge goodwill impairment formed? The reason is backdoor listing.
In the high light moment when sales volume is booming, Zhongtai automobile borrowed the shell to list Jinma shares. In November 2015, yingjianren officially launched the backdoor plan. Nephew Jin zheyong established Yongkang Zhongtai as the backdoor operation platform, in which Zhongtai manufacturing and Zhongtai new energy are two important assets.
The backdoor plan released in 2016 shows that Jinma shares acquired Yongkang Zhongtai by issuing shares + cash.
At that time, the net asset value of Yongkang Zhongtai was about 2.2 billion yuan, but it was over valued at 11.6 billion yuan, with a value-added rate of 429%. At that time, the market value of Jinma was only 3.2 billion yuan, and the acquisition was known as snake swallowing elephant. In June of the next year, Jinma shares held a restructuring and renaming ceremony in Shenzhen Stock Exchange, officially renamed as Zhongtai automobile, and successfully listed in backdoor.
In order to raise funds through the successful issuance of shares, at that time, TIMA group, the joint controller of Jinma and Yongkang Zhongtai automobile, as the compensation obligor, made a commitment that the audited net profit and loss attributable to the shareholders of the parent company after deducting non recurring profit and loss in 2016, 2017, 2018 and 2019 was not less than 1.21 billion yuan, 1.41 billion yuan, 1.61 billion yuan and 1.61 billion yuan respectively.
However, after the completion of restructuring and listing, except for the completion of zotais commitment to wipe the line in 2016, the rest of the years were not completed.
Previous sales in 2017 and 2018 were 317000 and 233100, respectively, with a sharp decline in performance.
Zhongtai automobile said that the company acquired 100% of the equity of Yongkang Zhongtai Automobile Co., Ltd. in 2017, forming a consolidated goodwill of 6.579 billion yuan, more than half of the purchase price at that time.
Among them, the impairment of goodwill accrued in 2018 is 320 million yuan. In 2019, Zhongtai automobile came to a big bath of goodwill, with 6.2 billion yuan of goodwill directly returned to zero. Zhongtai automobile said in the latest announcement that in 2019, the companys performance commitment of asset restructuring has not been realized. The chairman and President of the company deeply regret this and sincerely apologize to the majority of investors.
It is worth mentioning that, due to the unfulfilled performance commitment in 2018, according to the compensation agreement, the number of shares to be compensated by Tieniu group is 468 million. The listed company plans to buy back the number of shares to be compensated by Tieniu group at a total price of 1 yuan and cancel it, and return the dividend income corresponding to the corresponding shares, totaling about 7.027 million yuan.
However, till now, Tieniu group still hasnt realized the compensation. In May this year, Zhejiang securities regulatory bureau decided to order Tieniu group to take corrective measures.
Wearing hats for non-standard Annual Report
Last night, Zhongtai motor also released a notice that the companys stock trading was subject to delisting risk warning and suspension and resumption of trading, saying that the companys stock will be suspended for one day on June 23, 2020, and resumed trading from June 24, 2020.
Since June 24, the companys stock has been subject to the delisting risk warning treatment, the stock abbreviation has been changed from Zhongtai Auto to * ST Zhongtai, and the daily rise and fall of stock trading is limited to 5%.
According to the announcement, Zhongtai automobile stock trading was subject to delisting risk warning because the companys financial accounting report in 2019 was issued by Baker Tilly international accounting firm (special general partnership) with audit report unable to express opinions.
The company also issued a risk warning that its shares might be suspended. According to the relevant provisions of the Listing Rules of Shenzhen Stock Exchange, if the companys financial report in 2020 is still issued with a negative opinion or an audit report unable to express an opinion, the companys shares will be suspended from listing, please pay attention to the investment risk of investors.
Directors cannot guarantee the authenticity of the annual report
It is worth mentioning that Lou Guohai, director of Zhongtai motor, said that the authenticity, accuracy and integrity of the contents of Zhongtai motors annual report could not be guaranteed.
The reason is that there is great uncertainty in the companys ability of continuous operation, and it is difficult for Tieniu Group Co., Ltd. to cash in the companys performance compensation, and the company faces many lawsuits and guarantees.
In this case, it is impossible to reasonably estimate the amount of loss caused to the company due to performance compensation and contingencies, and in combination with the audit results issued by the audit institution that cannot express an opinion, it is impossible to confirm the authenticity, integrity and accuracy of financial data such as the companys sales revenue, total profit and net profit attributable to the shareholders of the listed company in 2019.
Zhongtai automobile also said that there are major defects in the internal control environment, lack of internal control and supervision, difficulties in operation, lack of funds, and stagnation of production and operation; large amount of capital transactions with some suppliers, the amount of annual payment exceeds the total amount of annual orders; lack of investigation and feasibility Study on the purchase of major assets.
In addition, the company failed to perform the review and disclosure procedures for external guarantees; the salaries and social security expenses of employees were not paid on time; a large number of employees left or were not on duty; the key internal control functions were absent; the organization could not operate normally; there were major defects in the internal control environment and lack of internal supervision.
The chairman of the board has been restricted
In Zhejiang Province, there are two well-known automobile big men, one is Li Shufu, the other is Ying Jianren, the actual controller behind Zhongtai automobile.
Back in 1992, yingjianren founded a hardware factory, and then expanded to form Tieniu group. Its business expanded to electronic components, real estate, automobile, etc. 2003, 2007. The Tieniu group controlled by yingjianren and his wife Xu Meier successively bought two shell companies, Jinma Co., Ltd. and Tongfeng Electronics Co., Ltd.
In 2003, Tieniu group tried to manufacture automobile, invested 3 million yuan to set up Zhongtai manufacturing together with its relatives, and yingjianrens two nephews were in charge of the company.
Ying Jianren was once the richest man in Yongkang, Zhejiang Province. According to the list of 36 Huruns richest people 2017 released by Hurun Research Institute, yingjianren and his wife Xu Meier have a wealth of 14 billion yuan.
Seeing him rise, seeing him fall down. In addition to the fact that its hard to control peoples scenery, Tianyan data shows that in April this year, Jin zheyong, chairman of Zhongtai automobile, was restricted from high consumption.
Several executives have resigned
Zhongtais management is also in the wind and rain.
At the same time, the company is involved in lawsuits. Tianyan inspection shows that since this year, Zhongtai motor has 19 court announcements, mainly including sales contract disputes and advertising contract disputes, and Zhongtai motor has acted as the defendant.
In addition, it was reported that Zhongtai Hunan base issued the notice on the postponement of the companys employees holiday on May 29, saying that due to the downward pressure of the automobile industry and the serious impact of the epidemic, the holiday time of all employees in the base was postponed to June 30, 2021. According to the notice, Zhongtai auto encourages employees to leave voluntarily and gives certain incentive fund subsidies.
Share price fell from 18 yuan to less than 2 yuan
Over three years, the price has plummeted by 90%
The companys share price has been falling.
Since this year, the stock price of Zhongtai automobile has been falling all the way. As of the closing on June 22, the stock price of Zhongtai automobile is 1.78 yuan / share, down nearly 40% compared with the beginning of the year.
Data shows that as of the first quarter of this year, the number of shareholders is about 66400.
Source: Yang Bin, editor in charge of China Fund News_ NF4368