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Yangtze Business Daily News● Yangtze Business Daily reporter Shen Yourong

In the A-share market, the concept of driverless driving is very popular, and Power New Energy (600841.SH) took the opportunity to gain popularity.

On July 19, the share price of Power New Technology once again hit the daily limit, closing at 4.51 yuan per share.

In the seven trading days from July 11 to 19, Power New Technology achieved four daily limit ups. However, on July 22, its stock price fell and closed at 4.44 yuan per share.

In contrast to the stock price trend, the operating performance of Power Xinke is still bleak. In the first half of this year, the company expects to lose at least 600 million yuan, mainly because its wholly-owned subsidiary SAIC Hongyan Automobile Co., Ltd. (hereinafter referred to as "SAIC Hongyan") is still losing money.

In 2022 and 2023, Power New Technology suffered losses of 1.6 billion yuan and 2.4 billion yuan respectively. Including the first half of this year, the total loss in two and a half years exceeded 4.6 billion yuan. The continuous losses are all related to SAIC Hongyan.

The predecessor of Power New Energy was SAIC Motor Corporation. In 2021, the company completed its reorganization, and the target company SAIC Hongyan was consolidated and became a wholly-owned subsidiary of Power New Energy. Power New Energy thus formed a dual-industry operation pattern of "heavy-duty trucks + diesel engines".

However, the SAIC Hongyan, which was originally expected to be a big success, turned out to be a drag. In the first half of this year, although the sales volume of SAIC Hongyan increased, it was still at a low level and still in a loss-making state.

The share price of Power New Technology once soared, which was related to SAIC Hongyan's layout of driverless driving. People are looking forward to when SAIC Hongyan can get out of its operating difficulties.

The stock price once soared

Xinke Power was in the limelight and its stock price soared at one point.

On July 19, in the morning, Power New Technology opened at 4.10 yuan per share, briefly dropped to 4.05 yuan per share, then rebounded and continued to rise. At around 9:50, a buy order of 154,200 lots pushed the stock price to the upper limit. Until the end of the day's trading, the stock price was firmly locked at the upper limit by the buy order, closing at 4.51 yuan per share.

This is the second consecutive daily limit for Power New Energy and the fourth daily limit in the seven trading days since July 11.

On July 11, Power New Technology's stock price hit the daily limit for the first time, closing at 3.53 yuan per share. The next day, it hit the daily limit again, and the trading volume increased to 117 million yuan. On July 15, the stock price fell slightly by 0.26%, rose by 1.03% on the 16th, and fell by a large amount on the 17th, by 4.60%. Then, it hit the daily limit on the 18th and 19th.

However, after a weekend, by July 22, the share price of Xinke Power fell another 1.55%, closing at 4.44 yuan per share.

In the seven trading days from July 11 to 19, Power New Technology achieved four daily limit increases. What is the reason behind it?

On July 12 and 19, Power New Technology successively issued announcements on abnormal stock trading fluctuations. The company stated in the announcement that after self-examination, the company and its holding subsidiaries' other production and operation activities were normal, the market environment or industry policies had not changed significantly, the company had no major information that should be disclosed but was not disclosed, and the company's controlling shareholder and actual controller were not planning major asset restructuring, share issuance and other major matters involving the company.

On July 10, Power New Technology released its semi-annual performance forecast. The company expects the net profit attributable to shareholders of the parent company (hereinafter referred to as "net profit") in the first half of this year to be between -780 million yuan and -600 million yuan, and the net profit after deducting non-recurring gains and losses (hereinafter referred to as "net profit after deducting non-recurring gains and losses") is expected to be between -830 million yuan and -650 million yuan. Compared with the net profit and net profit after deducting non-recurring gains and losses in the same period last year, the loss amount has decreased.

So, why did the share price of Dongdongli Xinke rise at one point?

According to a research report by a securities firm, Power New Technology mainly produces and sells heavy-duty trucks and diesel engines. In the field of new energy, the company's wholly-owned subsidiary SAIC Hongyan is actively developing heavy-duty truck products such as pure electric and hydrogen fuel cells. Recently, SAIC Hongyan has successfully developed unmanned driving technology suitable for various heavy-duty trucks in cooperation with relevant technology companies, and has achieved commercial operation in many places.

On May 15 this year, in response to investors' questions on the investor interaction platform, Power New Technology said that SAIC Hongyan is currently developing new energy heavy-duty trucks with more than 600kwh to increase the range of new energy heavy-duty trucks. This product has not yet been put into production and sales.

Earlier, the company also stated that it has comprehensively deployed new energy heavy-duty trucks such as pure electric, fuel cell, and hybrid. Among them, pure electric heavy-duty trucks will be put on the market in 16 different scenarios in 2021, and more than 4,000 units have been officially put into operation; hybrid mixer trucks, dump trucks and other related products already have related products.

On June 4, the Ministry of Industry and Information Technology's website released a notice titled "Four departments orderly carry out pilot projects for intelligent connected vehicle access and road access", announcing the first nine intelligent connected vehicle access and road access pilot consortia. SAIC Hongyan and U-Drive Zhitu became the only truck consortium in the industry to be shortlisted. This selection indicates that the autonomous driving technology and commercialization capabilities of the above-mentioned 5G+L4 smart heavy trucks have been widely recognized.

Therefore, the market listed Xinke Power as an unmanned driving concept stock, and it attracted the attention of funds.

How to escape from the test

Although it has taken advantage of the popularity of the driverless car concept, the profitability of Xinke Power is still worrying.

The predecessor of Power Xinke was Shanghai Diesel Engine Co., Ltd., which was listed on the A-share market in March 1994. Its main business is the research and development, manufacturing and sales of diesel engines.

From the perspective of operating performance, Shanghai Diesel Fuel Co., Ltd.'s performance was mediocre. From its listing to 2020, the company's operating income increased from about 1 billion yuan to about 6 billion yuan, and its net profit increased from 187 million yuan to 203 million yuan, with obvious fluctuations during the period, with the lowest being only about 6 million yuan.

In 2021, Shanghai Diesel Engine Co., Ltd. completed a major asset reorganization. The company purchased 50% of the equity of SAIC Iveco Commercial Vehicle Investment Co., Ltd., 100% of the equity of SAIC Hongyan, and 10% of the equity of SAIC Fiat Hongyan Powertrain Co., Ltd. from SAIC Group, Chongqing Mechanical and Electrical Holdings, etc., with a total transaction price of 4.672 billion yuan. Through the reorganization, the company's main business has become a dual business of "heavy-duty trucks + diesel engines". Among them, the heavy-duty truck business uses SAIC Hongyan as a platform, and the company has also changed its name to Power Xinke.

In the first year after the restructuring, the operating performance of Power Xinke reached a peak. In that year, the company achieved operating income of 24.402 billion yuan, a year-on-year increase of 11.09%; net profit and non-net profit were 693 million yuan and 487 million yuan, respectively, a year-on-year increase of 87.48% and 221.50%.

However, the good times did not last long. In 2022, Power New Technology achieved operating income of 9.929 billion yuan, a year-on-year decrease of 59.31%; net profit and non-net profit were -1.611 billion yuan and -1.816 billion yuan, respectively, a year-on-year decrease of 332.54% and 472.73%.

The company explained that due to a variety of unfavorable factors such as the downward economic growth rate, repeated epidemics, lower investment growth, and insufficient project start-up rates, the market demand for the heavy-duty truck industry was "halved", and the heavy-duty truck complete vehicle, parts, dealers and other industrial chains were greatly affected. The market demand for the diesel engine industry also declined significantly. In that year, the sales of heavy-duty trucks were 13,100 units, a year-on-year decrease of 79.20%, and an impairment loss of 1.15 billion yuan was recorded.

In 2023, the company's operating income further dropped to 8.681 billion yuan, a decrease of 12.57%; net profit and non-net profit were -2.463 billion yuan and -2.538 billion yuan respectively, and the loss widened. In that year, the company made an impairment loss of 1.605 billion yuan. Its heavy truck sales that year were only 10,000 units.

Including the first half of this year, the cumulative loss of Power New Technology has exceeded 4.6 billion yuan in two and a half years. Obviously, the failure of SAIC Hongyan's performance to meet the standards is the main reason for the company's huge losses.

Regarding the losses in the first half of this year, Power New Technology explained that the market competition is becoming increasingly fierce. Although SAIC Hongyan's sales have increased, they are still at a low level and are still in a loss-making state.

Affected by the fact that the performance of SAIC Hongyan's heavy truck business did not meet expectations, Power Xinke continued to suffer deep losses. Affected by SAIC Hongyan's efforts in new energy and unmanned driving, Power Xinke's stock price once rose. When Power Xinke can get out of its operating difficulties due to SAIC Hongyan has attracted much attention from the market.

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