According to Zotye Automobile’s financial report for the first half of 2020, the company achieved revenue of 770 million yuan during the reporting period, a year-on-year decrease of 76.69%; the net profit loss attributable to shareholders of the listed company was 1.034 billion yuan, a year-on-year decrease of 256.08% . It is worth noting that Lou Guohai, director of Zotye Automobile, issued a statement of objection to this half-year financial report, saying that the authenticity, completeness and accuracy of the financial data cannot be guaranteed.
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What is the current situation of Zotye Motors since it fell into a business crisis last year? Has the crisis eased? Can Zotye, the dark horse of independent car companies in the past, still be able to thrive? For these questions, we tried to find answers from the company’s recently released financial report for the first half of 2020.
According to the financial report, in the first half of the year, Zotye Automobile achieved a cumulative revenue of 770 million yuan, a year-on-year decrease of 76.69%; the net profit loss attributable to shareholders of listed companies was 1.034 billion yuan, a year-on-year decrease of 256.08%.
In terms of production and sales, in the first half of the year, Zotye produced a total of 574 cars and sold 1,417 cars.
This data is not surprising to Cheshi Novel. After all, various bases have been in a state of suspension of production since last year. For Zotye Automobile, which mainly achieves sales revenue and profits through the sale of complete vehicles, a decline in revenue and net profit is really "normal performance."
However, in this financial report, what Cheshi Novel is more concerned about is whether Zotye Motors has strategies and solutions for the current situation and the future.
Operating status: huge debt pressure, hundreds of lawsuits
Regarding the performance in the first half of the year, Zotye Motors said in its financial report: "Affected by the macroeconomic situation, the overall prosperity of the automobile industry Factors such as the industry's increasingly fierce competition and the company's shortage of working capital have led to a significant decline in the company's vehicle sales, which did not meet expectations. Due to the sharp decline in sales, the company's operating income has dropped significantly and operating costs have increased relatively, resulting in large operating losses. ”
In fact, the sharp drop in production and sales only reduces the corresponding revenue. For Zotye Automobile, the biggest difficulty currently is how to resume production as soon as possible and get rid of the huge debt crisis.
According to the financial report, as of the end of this reporting period, Zotye Automobile still had accounts payable amounting to 4.579 billion yuan; the amount of important accounts payable aged more than 1 year amounted to 723 million yuan. In this regard, Zotye Auto stated that the reason for outstanding repayments or carry-overs is mainly due to financial constraints.
In addition, the financial report also shows that Zotye Motors also incurred overdue short-term loans of 2.867 billion yuan during the reporting period. According to Zotye Automobile, these overdue short-term loans are various loans obtained from banks by its secondary subsidiaries Zotye New Energy Changsha Branch, Zhejiang Zotye Automobile Manufacturing Co., Ltd., and parent company Zotye Co., Ltd. After the loan is due, they are unable to pay.
In terms of cash flow, according to the financial report, Zotye Motors currently only has 106 million yuan in hand. For an automobile manufacturer, such a cash flow reserve is obviously extremely unhealthy. It is not difficult to see from this the current financial embarrassment of Zotye Automobile.
Due to financial constraints, Zotye Automobile was directly in arrears in terms of supplier payables, employee salaries, etc., resulting in nearly a hundred lawsuits during the reporting period.
According to the financial report, Zotye Automobile was involved in 102 lawsuits and arbitrations as a defendant/applicant during the reporting period, mainly involving loan contract disputes, sales contract disputes, custom-made contract disputes, and highway cargo disputes. Transport contract disputes, labor and personnel disputes, etc., involving a total amount of 876 million yuan.
Except for the above-mentioned lawsuits with significant amounts, as of the date of approval of this financial report, a total of 29 cases have been settled or concluded through mediation, 2 cases have jurisdiction objections, 3 cases have been withdrawn or suspended, and judgments or other effective laws have been obtained. There are 11 cases in which documents have been filed, and 57 cases are awaiting trial or in trial. The total amount of pending litigation is approximately 728 million yuan.
The ongoing litigation has also brought certain uncertainty to Zotye Automobile's ability to resume work and production as soon as possible and resume normal operations.
The production resumption plan has been formulated, but there is no timetable for when it will be implemented
The current situation is before us. For Zotye Motors, there is no timetable for the resumption of work and production. The key to whether it can achieve the goal of achieving great success lies in whether it can continue to obtain external funds to renew its blood, and at the same time, formulate an efficient and effective self-rescue plan.
In this regard, Cheshi Novel noted in the financial report that for Zotye Motors, the positive side is that it still has vehicle platform planning, styling design, data design, performance development, and process engineering in its hands. , new energy and other all-round design and development capabilities. In terms of new energy vehicles, Zotye Automobile also has complete vehicle design, trial production, testing and parts development capabilities.
In this regard, Zotye Auto also claimed: "In the next three years, Zotye Auto will follow the new trends in the development of the future automobile industry, concentrate its superior resources, and strive to create a new 3.0 platform architecture "ZFA". The commonality rate of parts of the models has reached more than 80%.”?
In addition, according to Zotye Automobile’s financial report: “During the reporting period, the company’s core management team, key technical personnel, proprietary equipment, Patented and non-patented technologies, franchise rights, etc. have not undergone major changes.”
In other words, Zotye Automobile still has the foundation to achieve self-development.
According to its work plan for the second half of the year introduced in the financial report, its top priority in the next six months will still be to raise funds. Zotye Automobile said that in addition to strengthening communication with local governments and promoting the implementation of financing plans, it has also formulated an asset revitalization plan. Specifically, it means the liquidation and disposal of some fixed assets. According to reports, it is currently negotiating with an e-commerce platform for supply chain financing.
In terms of resumption of production, Zotye Motors said it will formulate plans in stages. In the first phase, the core model Zotye TS5 will be produced first. In the second phase, the production of mature models will be resumed, such as Zotye T600 export model, Zotye T700, Zotye E200 pure electric model, etc.
In terms of marketing strategy, it will develop the urban and rural family mobility market through the A00-class pure electric model E200.
In terms of channel network, a "large-regional agency system" will be established, and regional agents will expand terminal sales channels such as automobile trade and hypermarkets to expand customer acquisition points. In addition, each distribution center and provincial sales representatives carry out down-to-earth management and conduct sales in stores; reducing the cost of building stores, lowering the entry threshold for potential dealers, and shortening the investment recovery period; greatly reducing advertising investment and switching to local sales Push sales.
In addition, in terms of operation and management, Zotye Motors stated that the company will promptly rectify the company's internal control deficiencies. And will focus on internal control in important business areas such as finance and investment. However, due to the sharp decline in revenue, huge net profit losses, as well as objective reality such as the suspension of production at various bases and prosecution for defaulting on payments to suppliers, there is great uncertainty in the continued operation of Zotye Automobile.
In fact, regarding the financial report for the first half of 2020, Lou Guohai, director of Zotye Automobile, issued a statement of dissent stating that he could not guarantee the authenticity, accuracy and completeness of the contents of this report.
The reasons given by Lou Guohai are: there is great uncertainty in the company's ability to continue operating, it is difficult for Tieniu Group Co., Ltd. to cash in on the company's performance compensation, and the company faces numerous lawsuits and guarantees. Under this circumstance, it is impossible to reasonably estimate the amount of losses caused to the company due to performance compensation and contingencies, and it is impossible to confirm the company's financial data such as sales revenue, total profits, and net profits attributable to shareholders of the listed company for the first half of 2020. authenticity, completeness and accuracy.
For Zotye, this is not the first time that the content of its financial report has been questioned. After the release of last year’s annual report, Baker Tilly International Accounting Firm, which was responsible for the audit, issued an audit report in which it was unable to express an opinion (Tian Ti Professional Zi [2020] No. 30158). At that time, Baker Tilly International said: "There are significant uncertainties that may cause significant doubts about Zotye Auto's ability to continue as a going concern. Although Zotye Auto disclosed the proposed improvement measures in the notes to the financial statements, we have no confidence in Zotye Auto's ability to continue as a going concern. Sufficient and appropriate audit evidence cannot be obtained for matters with major doubts or major uncertainties.”
It is expected to lose 1.6-1.2 billion in the first three quarters, and there is no hope of turning the situation around within the year
Based on the current situation. Due to various objective circumstances, for the first three quarters, Zotye Automobile has given an expectation of losses of 1.6-1.2 billion yuan, a year-on-year decrease of 110.53%-57.90%.
In this regard, Zotye Motors said: "In 2020, due to the shortage of funds combined with the impact of the new coronavirus epidemic and the overall low prosperity of the automobile industry, the company's affiliated bases are basically in a state of suspension of production, and the company's automobile production and sales have increased sharply. The company's sales revenue has dropped significantly, causing the company to suffer a large loss in the first three quarters of 2020. "Based on this estimate, the loss in the third quarter is expected to be 566-166 million yuan. This is obviously not good news for Zotye, which is already strapped for funds. This will also mean that without the entry of large amounts of external funds, the possibility of turning the situation around within the year is slim.
According to the interactive platform of listed companies, in response to the question "Tianniu still has not expressed compensation, but your company still has not pursued the case, please explain to shareholders", Zotye Automobile's secretary-general responded: "The company is currently preparing Relevant litigation materials will be submitted to the court soon."
As of the time of writing this article, Zotye Automobile closed at 1.29 yuan per share that day, an increase of 1.57% from the previous trading day, with a total market value of 2.616 billion yuan.
This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.