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Home > SIPX News > Recent News of Chongqing Lifan Co., Ltd.

The debt ratio is as high as 75.02%. The difficulties and barriers facing Lifan Motors

Chongqing Lifan Co., Ltd. has 16 shares of equity depreciation and pledge this year, with a debt ratio of 75.02%, and 2.48 billion betting on new energy projects.

Lifan is facing a difficult barrier.

Lifan shares released a financial report for the first half of 2018. Lifan shares realized operating income of 5.979 billion yuan, a decrease of 5.06% over the same period of last year; net profit was 125 million yuan, an increase of 3.01% over the same period of the previous year. In terms of liabilities, Lifan’s current asset-liability ratio is 75.02%. According to the statistics of the Beijing News reporter, Lifan Holdings has carried out 16 equity decommissioning and pledge operations since January this year to further renew the loan.

Lifan passenger car, one of the main business segments of Lifan, suffered from liquidity problems this year. According to relevant sources, at the beginning of August this year, due to Lifan’s delay in paying suppliers, some suppliers went to Lifan Group to block the door and recover the money every day. In addition, Lifan’s new energy road has not gone smoothly. It has been suspended from subsidies and cancelled production qualifications, and sales have fallen far short of scale.

The Beijing News reporter repeatedly tried to contact Lifan. As of press time, no response was received. Cui Dongshu, secretary-general of the National Passenger Car Market Information Association, said that Lifan’s own development strategy and electrification were not smooth, which affected the sales and profitability of Lifan Motors.

Lifan Motors is in trouble

Yin Fanshan, founder of Lifan, and Lifan, who he founded, have always been important representatives of private enterprises in Chongqing. In 1992, he started from the motorcycle market and once entered the top 8 private enterprises in the country with the sales of motorcycles reaching 1.8 billion yuan. With the decline of the motorcycle industry, in 2003, Yin Mingshan began to enter the automotive industry.

Lifan Motor started earlier and the product line was established earlier. In 2006, Lifan’s first automotive product, Lifan 520, was launched. However, for more than a decade, Lifan has not been outstanding in terms of products and technology. Its sales volume is flat and lacks star products. It was not until December 2016 that Maiwei achieved a breakthrough in monthly sales of bicycles.

The data in recent years show that Lifan’s status quo is very bleak without the support of core technology. In 2016, the sales of Lifan’s traditional passenger vehicles totaled 128,700 units, down 3.48% year-on-year. In 2017, the sales volume of traditional passenger vehicles reached 125,000 units, down 2.3% year-on-year. In July this year, the sales and marketing report showed that the total number of new cars sold in January-July this year was 13,247. Except for the three-digit sales of Maiwei and Xuanlang, the other models have only two or even one digits. Sales.

The sluggish sales of products directly affect the profitability of enterprises. In 2016, Lifan achieved revenue of 11.047 billion yuan, down 10.99% year-on-year, net profit was 82.608 million yuan, down 76.66% year-on-year; in 2017, revenue was 12.6 billion yuan, up 14.707% year-on-year, and net profit was 171 million yuan. The year-on-year increase was 106.46%. However, with the net profit of 354 million yuan in 2015 as a comparison, it is still unable to recover the trend of a sharp drop in profitability. The Beijing News reporter also found that the proportion of new energy subsidies in the net profit is huge. Taking 2016 as an example, the new energy subsidy in net profit reached 40.91 million yuan.

According to Lifan’s financial report released in the first half of 2018, Lifan shares realized operating income of 5.979 billion yuan, a decrease of 5.06% over the same period of last year; net profit was 125 million yuan, an increase of 3.01%, but the asset-liability ratio was as high as 75.02%. The debt ratio has been higher than 70% for four consecutive years since 2015.

Under the pressure of funds, Lifan also plans to sell land for liquidity. In February of this year, Lifan announced that it plans to build a new factory in the Liangjiang New District of Chongqing, and relocate the existing passenger car production base of Lifan passenger vehicles, thereby obtaining a land transfer of about 1.5 billion to 2.5 billion yuan. income.

New energy vehicles have been suspended from subsidies and production qualifications

Three years ago, Yin Mingshan tried to make a big change. In 2015, Lifan Group built a “energy station + power exchange” with a large investment, trying to open a breakthrough from new energy. However, the “fraudulent” incident that erupted with it has greatly affected Lifan’s new energy transformation.

In October 2016, Lifan Co., Ltd. announced that its subsidiary Chongqing Lifan Passenger Vehicle Co., Ltd. received a processing decision issued by the Ministry of Finance. The company did not meet the new energy vehicle subsidy declaration conditions, a total of 2,395 vehicles, involving the central financial subsidy funds up to 1.14 100 million yuan will not be subsidized for the above-mentioned new energy vehicle central government, and will cancel the pre-draw qualification of Lifan passenger car in 2016 for the central financial subsidy.

This news became the beginning of the problem of exposing Lifan. At the beginning of May 2017, the Ministry of Industry and Information Technology resumed the application for Lifan’s new energy vehicle subsidy application, but did not save the sales of Lifan Motors. In the eyes of the industry, this shows that Lifan’s own products have problems and cannot form brand influence and competitiveness.

In July 2017, Lifan’s various products faced the suspension of sales and suspension of production by the Ministry of Industry and Information Technology. In this regard, Lifan Motor explained: “Lifan Motor is mainly an iterative product upgrade. The updated products have been re-declared into “Road Motor Vehicle Manufacturing Enterprises and Products” and “New Energy Vehicle Promotion and Application Recommended Model Catalogue”.

However, a senior executive of a new energy vehicle manufacturer believes that: “This “Announcement” reflects from a certain perspective that the national level is rectifying the market and removing all products that did not meet market requirements before. The threshold of new energy vehicles and The requirements will be higher and higher.”

In addition, at the product level, Lifan Motors did not have more layouts and actions, but product quality problems. On August 31 this year, some netizens posted a video of a Lifan new energy electric vehicle on the Internet, which was suspected of spontaneous combustion. Then, Lifan shares responded for the first time, saying that the vehicle was a Lifan 650EV electric vehicle. The accident was caused by heavy rain in Guangzhou. The vehicle was soaked in rain for more than 2 hours, and the owner did not contact the service station in time to continue using the vehicle. The battery is on fire.

Transformation is still going to force new energy

Under multiple difficulties, how to protect the marginalized Lifan car is a key issue.

The focus of Lifan’s transformation is on new energy. Yin Mingshan, founder of Lifan Group and former chairman of Lifan Group, once said frankly: “In terms of Lifan itself, the external evaluation of our Lifan new energy is very low – it is early in the morning, catching a late episode. If we are new energy vehicles If you don’t come up, you will probably be eliminated in the future.”

According to public information, in 2007, Lifan established Shanghai Zhongke Lifan Electric Vehicle Co., Ltd. and Henan Lifan New Energy Electric Vehicle Co., Ltd. to build a new energy industry R&D, production, operation and sales system. In 2014, Lifan’s first electric car 320E went on the market, but it did not achieve sales response. In June 2015, Lifan launched the new energy I.BLUE 1.0 strategy and opened the way for the transformation of new energy. According to official data from Lifan, the sales volume of Lifan new energy vehicles in 2016 and 2017 was 5,550 and 7,738 respectively. Although the scale has been expanded, it has risen to the industry, and this sales volume is far less than the monthly sales of BYD’s more than 20,000 vehicles.

However, Lifan is full of confidence in the development of new energy vehicles. On the evening of May 6 this year, Lifan disclosed the plan for the increase. The company intends to target no more than 10 specific targets, and the non-public offering of shares does not exceed 261 million shares. The total amount of funds raised does not exceed 2.48 billion yuan, investing in smart new energy vehicles. Projects such as energy station projects, new energy SUV models, and repayment of loans. Lifan will build a complete intelligent new energy vehicle industry chain with “energy station” as the core, technology research and development and core parts manufacturing under the power-exchange mode.

Yin Fanshan, founder of Lifan Co., said in an interview with the media at the shareholders’ meeting in May this year that Lifan has made a lot of preparations in the field of new energy. “Although the current output is not high, it has certain ecological effects, from research and development to production. Operation, as well as capital support, the chain and ecology have been built, and the future is expected to further stabilize.”

Conducting time-sharing leasing to seek breakthroughs

The car time-sharing platform hopes that the car is the idea of ​​Lifan to switch to new energy. In recent years, car time-sharing has become a hot emerging industry. The data shows that in the first half of 2017, a number of car time-sharing platforms received investment of 10 million yuan or even hundreds of millions of yuan. In the May of this year, the CEO of Panda Motors publicly stated that it is conducting an A round of financing. The estimated financing scale is 500 million yuan, and said that the round of financing is about to be completed and will be announced within the year.

According to the reporter of the Beijing News, the number of users of the Panda car has exceeded 3 million, an increase of about 600,000 compared with the previous year. It is currently the most time-shared leasing project in China. With the influx of players in the car rental industry, the competition and elimination of the industry is also accelerating.

The transformation of Lifan Motors has not been smooth. In October 2017, Yin Mingshan announced his retirement. He also laid the task of “stable to turn to new energy” for the successor. After resigning from the position of chairman of Lifan Group, he still assumed the position of chairman of the company. .

In the eyes of the industry, Lifan chose new energy vehicles as a breakthrough point, and it is right to choose the new business. However, the operational difficulties faced by the parent company Lifan will inevitably have an impact on the operation and long-term development of the company. Lifan has raised 2.48 billion yuan to invest in the new energy automobile industry chain under the current funding situation. The success of the transformation path remains to be seen.

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