news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Without business orders, a new energy bus company with a designed annual production capacity of 8,000 vehicles had to temporarily suspend work and production.

Longzhou Holdings (002682) announced on the evening of August 23 that its holding subsidiary Dongguan China Auto Hongyuan Automobile Co., Ltd. (hereinafter referred to as "China Auto Hongyuan"), which mainly produces new energy buses, will extend the suspension of work and production from June 1 to November 30.Longzhou shares emphasized that in recent years, the operating income of China Automotive Hongyuan has accounted for a very small proportion of the company's consolidated statement operating income, and the current suspension of work and production has little impact on the company's operating income.

The reporter noticed that when the foundation stone of the new energy bus project under China Auto Hongyuan was laid in 2014, it was planned that after the project reached full production, it would achieve an annual production capacity of 8,000 buses of various types. After the project was fully put into production, the annual sales would be about 5.2 billion yuan.

Discontinued since January

China Auto Hongyuan mainly produces new energy vehicle products such as 6-12 meter pure electric city buses, pure electric commercial buses, pure electric logistics vehicles, etc. Longzhou shares introduced that in recent years, China Auto Hongyuan has been affected by factors such as the slowdown in the renewal of the new energy bus market, and its operating performance has been less than ideal, and its operating income has been at a low level.

In fact, China Auto Hongyuan has already temporarily stopped production since January 1 this year, and this new round of temporary suspension announcement is a supplementary disclosure. Longzhou shares did not announce this situation before, and only briefly stated in the semi-annual performance forecast that "the company's holding subsidiary Dongguan China Auto Hongyuan Automobile Co., Ltd. temporarily stopped production due to no project bid, and its operating income and operating profit were basically the same as the same period last year."

Longzhou Group stated that the suspension of work and production of China Auto Hongyuan since January was to alleviate operational difficulties and reduce labor costs. Because China Auto Hongyuan had no business orders and production arrangements in the short term, the suspension of work and production of China Auto Hongyuan was further extended.

In fact, China Auto Hongyuan's operating income has been at a low level for several years. Data provided by Longzhou Holdings shows that from 2021 to 2023, China Auto Hongyuan's annual revenue was 168 million yuan, 194 million yuan, and 6.6925 million yuan, respectively, accounting for 3.37%, 3.88%, and 0.18% of the company's consolidated operating income, respectively. In the first half of 2024, when production was suspended, China Auto Hongyuan's operating income was only 371,100 yuan, accounting for 0.03% of the company.

Although the revenue share is quite low, China Auto Hongyuan has suffered large losses in recent years. From 2021 to 2023, China Auto Hongyuan's net profit attributable to shareholders of listed companies was a loss, with losses of 53.74 million yuan, 63.76 million yuan, and 98.18 million yuan, respectively. After the suspension of production in January-June 2024, the loss was greatly narrowed to 19.42 million yuan. Therefore, it is not difficult to understand Longzhou's motivation for suspending China Auto Hongyuan.

Longzhou Group stated that during the temporary suspension of work and production of China Automotive Hongyuan, a group of left-behind personnel have been arranged to be responsible for various tasks such as service guarantee during the temporary suspension of work and production, and will be ready to return to work and resume production at any time according to changes in the market environment and order status.

The target annual sales volume was 5.2 billion yuan

Although it is currently facing operational difficulties, China Automotive Hongyuan, which was established in 1996, actually enjoyed a great reputation at the beginning as the only complete vehicle manufacturing company in Dongguan. One of the initial shareholders of its project was Guangdong Hongyuan Group Co., Ltd., which is famous nationwide for its basketball team. It was not until 2015 that Longzhou Holdings indirectly invested in China Automotive Hongyuan for the first time.

Before Longzhou Holdings acquired a stake in China Auto Hongyuan, in 2014, the foundation stone of the Kangmet Hongyuan Automobile Project under China Auto Hongyuan with a total investment of 2.5 billion yuan was laid in Mayong Town. When the project reaches full production, it will achieve an annual production capacity of 8,000 buses of various types. After the project is fully put into production, the annual sales will be about 5.2 billion yuan and the annual tax revenue will be about 250 million yuan.

When Longzhou Holdings acquired a stake in China Automotive Hongyuan, the counterparty promised that China Automotive Hongyuan's net profit in 2015, 2016 and 2017 would not be less than RMB 39.5 million, RMB 62 million and RMB 87 million respectively.

At that time, Longzhou shares warned of the risks of this transaction, saying that under the pressure of energy and environment and influenced by national policies, new energy buses have developed rapidly and become the development direction of future automobiles. It has also become the focus and focus of research and development, production and competition of my country's automobile manufacturers in the field of new energy. The market competition is also becoming increasingly fierce. Therefore, the China Automotive Hongyuan new energy bus project also has certain market risks.

Failure to disclose on time may result in regulatory action

On the same day, Longzhou Shares and relevant responsible persons also received an administrative supervision measure decision letter from the Fujian Securities Regulatory Bureau on this matter. The decision letter pointed out that China Auto Hongyuan had stopped production since January 1, and the company did not disclose the above incident as required, violating the relevant provisions of the "Information Disclosure Management Measures". The Fujian Securities Regulatory Bureau decided to issue an administrative supervision measure to Longzhou Shares to order rectification, and to take administrative supervision measures of issuing a warning letter to the company's chairman Chen Mingsheng, president Lan Nengwang, and board secretary Liu Caiwen.

It is understood that the "Information Disclosure Management Measures" stipulate that when a listed company has a major event that may have a significant impact on the trading price of the listed company's securities and its derivatives, and investors have not yet been informed, the listed company should disclose it immediately, explaining the cause of the event, its current status and possible impact.

In response, Longzhou Holdings said that the company attaches great importance to the relevant issues pointed out in the decision letter, and will strictly carry out rectification in accordance with the regulatory requirements of the Fujian Securities Regulatory Bureau and submit a written rectification report within the specified time. This administrative supervision measure will not affect the company's normal business management activities.