What is the purpose of Longxin GMs investment?

category:Finance
 What is the purpose of Longxin GMs investment?


However, at the same time, Longxin general disclosed that this foreign investment belongs to financial investment. Then, can the business transformation and upgrading be realized by financial investment?

On this issue, the reporter of Securities Daily contacted Longxin General Motors for confirmation, but as of the time of publication, no relevant reply has been received.

Cui Jie, a lawyer with BOC law firm in Beijing, said in an interview with Securities Daily: generally speaking, financial investment only pays money and does not participate in management. Strategic investment not only contributes capital, but also participates in operation, also involves power distribution and restriction, and also provides resources to assist the development of invested enterprises.

PI Jianjun of Zhongxing caiguanghua accounting firm also holds the same view. He further added to the reporter of Securities Daily: financial investment tends to make short-term profits, or the ultimate goal is to withdraw after getting a certain return on investment. Compared with financial investment, the cycle of strategic investment will be longer, the shareholding ratio will be larger, and there will be strong synergy in business.

In response to the Shanghai Stock Exchange inquiry letter, Longxin GM pointed out in the announcement that the company is engaged in the production and manufacturing of transportation vehicles and general machinery and the electronic components distribution field engaged in by United ChuangTai have a large industry span, and there is a big gap in business mode and resource endowment, and there is uncertainty in the follow-up business development cooperation of both parties.

In addition to poor business synergy, from the perspective of its own profitability, it is difficult to say that Longxin GMs profit opportunities can be realized by financial investment.

According to the data, the registered capital of United ChuangTai is HK $5 million, and the gross profit margin of the company from January to August in 2018, 2019 and 2020 is 3.68%, 4.79% and 4.12% respectively. In response to this, Longxin GM said in its reply to the Shanghai Stock Exchanges inquiry letter that the operation mode of United ChuangTai is mainly reflected in high income, high turnover rate and low gross profit rate, and the strategy of low gross profit rate is adopted to seize the market, and there is certain pressure on the sustainability of follow-up operation.

Focus on the main business or diversified development?

Diversified development or focus on the main business? Longxin GM, which was founded in 1993, is still confused on this issue after years of development.

In recent years, the listed companies that mainly engage in motorcycle business have not been doing well in recent years, which is in fact the inevitable result of macroeconomic development and change. Jiang Han, a senior researcher at Pangu think tank, told the Securities Daily: from the perspective of macroeconomic situation, we can see that motorcycle enterprises have been in a period of market anxiety recently. For the domestic market, motorcycles have gradually withdrawn from the urban market, but there may be certain development prospects in some rural markets, such as Southeast Asia In the foreign market, motorcycle enterprises have gradually lost the momentum of development because of competition and market problems. Therefore, the final result is that motorcycles are in a state of depression both at home and abroad. Jiang Han further pointed out that for motorcycle enterprises, the best way is to enhance the professionalism of the main business and strengthen research and development. In addition, enterprises can consider diversified development in electric vehicles or other similar markets from the perspective of diversification, such as further opening up the market through the design of some products. Source: Yang Qian_ NF4425

In recent years, the listed companies that mainly engage in motorcycle business have not been doing well in recent years, which is in fact the inevitable result of macroeconomic development and change. Jiang Han, a senior researcher at Pangu think tank, told the Securities Daily: from the perspective of macroeconomic situation, we can see that motorcycle enterprises have been in a period of market anxiety recently. For the domestic market, motorcycles have gradually withdrawn from the urban market, but there may be certain development prospects in some rural markets, such as Southeast Asia In the foreign market, motorcycle enterprises have gradually lost the momentum of development because of competition and market problems. Therefore, the final result is that motorcycles are in a state of depression both at home and abroad.

Jiang Han further pointed out that for motorcycle enterprises, the best way is to enhance the professionalism of the main business and strengthen research and development. In addition, enterprises can consider diversified development in electric vehicles or other similar markets from the perspective of diversification, such as further opening up the market through the design of some products.