As a result, joint venture capital is regarded as a cross-border by the industry. Longxin GM also said in the announcement that the company is currently in the process of transformation and upgrading in the direction of electrification, networking and intellectualization, and needs to explore the layout of upstream core components and other related fields.
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.
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.
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.
Previously, in its financial report, Longxin GM has repeatedly said that it will realize industrial upgrading and transformation and value chain upgrading by continuously optimizing its product structure and business structure, focusing on its main business. However, some investors cant help asking on the public platform that the assets acquired by the company in the past few years have not yet been digested. They just said that they would focus on the main business, but they would like to purchase a distribution electronic component factory. This is the strategy of focusing on the main business mentioned in the companys financial report?
From the performance point of view, Longxin GM has made little progress in focusing on its main business in recent years. According to the data of Dongfang fortune app, from 2017 to 2019, the company achieved a total operating revenue of 10.57 billion yuan, 11.2 billion yuan and 10.65 billion yuan, respectively, with a net profit of 965 million yuan, 919 million yuan and 623 million yuan, respectively. The core financial indicators of net profit showed a downward trend year by year.
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
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.