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Shangchaigufen loss for 4 years hidden profits by selling assets

    February 28, 2008, Shangchaigufen [12.612.69%] (600841.SH) released 2008 performance report. The company realize an annual sales income of 3.544 billion yuan,booster cables v an increase of 2.54%; net profit of 27.2847 million yuan, an increase of 53.11%.

    But the indisputable fact is that this is the company since 2005, battery clip the 4th great projects rely on a variety of means to achieve profitability.

    The Bohai Securities released its annual report also said Shangchaigufen not before the actual operation of a fundamental improvement over its stock price severely overvalued, given sell rating.tow rope Another analyst also believes that, although the Shanghai Automotive [9.689.01%] Group Co., Ltd. (hereinafter referred to as "SAIC") entered Shangchaigufen are indeed good, but no chance on the wood in 2009.

    So,ratchet tie dowm on firewood "satisfactory" performance really hidden behind the story?

    4 consecutive years of hidden losses.

    Although the net profit as results Shangchaigufen notice said, more than 50% compared to last year, but its profit after deducting non-recurring net profit was as -595.26 million.

    The Bohai Securities Research report, 2008, the company only achieved EBIT (EBIT) 21.7 million, down 60%, excluding 35 million if the investment income and minority interests of 25 million, Shangchaigufen the loss of 31 million yuan.

    The longitudinal comparison nearly 4 years, the company's annual report shows that the company operating loss for 4 years, 4 years profits rely on non-recurrent items. Data show that in 2005 -2007, the company profit after deducting non-recurring net profit was -163.33 million, -5690.91 million, -956.09 million.

    "Land sales, the sale of a subsidiary," the last 3 years, the company seems to have been busy selling the business has nothing to do with the main business, according to a press to rough statistics, the sale of associated companies, at least seven subsidiaries and a land, profit more than 130 million yuan. Although the sale of these one by one and get on the sideline billion in revenue, the company's energy seems to have not fully transferred to the main up.

    Annual report, company's main products in 2004 sales of 92,249 units of diesel; since 2005, dropped to 66,859 units after the rapid slump. The main engine to do the same industry Weichai [0.000.00%] (000338.SZ) in 2007 was 151,376 units sold, an increase of 88.10%. The Shangchaigufen 06, 2007 were 62,614 units, 62,604 units, but little has declined (Weichai 08 Annual Report is not out, so can not compare.)

    Ping An Securities, an analyst also pointed out that the performance of the diesel is not very good in recent years, manufacturers buy their products less, may be the quality problem, the problem may be after-sales service, in short, is not satisfactory, we have now are not concerned them.

    In addition, the report also showed that 08 listed companies in their investment returns in up to 9,000 million, while in 2008 the A-share market stumble endlessly, the company assets through processing of transactions received 7.0856 million yuan in revenue. In the 2007's bull market in financial assets in a transaction the income of 1,403,400.

    Reported as a roller coaster.

    Then horizontal contrast Shangchaigufen 08 4 copies of earnings, and I feel really as a roller coaster-like ups and downs. In particular, the company's operating profit and net profit attributable to equity holders of the two, the highest two quarters of data between the difference of more than 10 times.

    Based on earnings plus or minus four shows, the four-quarter operating profit of the company are: 5344200, 24675900, 18453400, -4440.87 million.
    Meanwhile, net profit attributable to equity holders of the four quarters of data are: 2925100, 21832000, 17089400, -2105.73 million.

    Shenyang as small as the Spring Festival which said: In fact, a quarter may be short, shooting is the same with the same, on and off, a fireworks later, tens of millions of profit was gone.

    Which play an important role. "

    In fact, the Tempo Group, a strategic investor in a government figure of the rumors are not groundless. Beijing Automotive Industry is facing the best opportunity for rapid development of the history, the Beijing government is also actively contributed to international mergers and acquisitions, attracting industrial investment settled locally.

    It is reported that the national "car industry restructuring and revitalization plan" introduced the first time, Beijing also simultaneously developed to accelerate the development of Beijing's auto industry-related measures, including new high-end components, high-end automotive electronics, automotive design and development, special vehicle manufacturing and trading five largest auto parts industrial park.

    Beijing Municipal Bureau of Industrial Promotion, the officials also said the park will introduce the core high-end high-end component parts project to improve Beijing's high-end automobile industrial chain link.

    Moreover, according to Beijing Automotive Industry development goals, 2012, Beijing Automotive to achieve 1.5 million sales, compared to double in 2008, the auto industry output value increased to 102.4 billion yuan from last year's 240 billion yuan. Among them, the high-end car project will also receive financial support industrial development in Beijing.

    However, to achieve these objectives, only through international mergers and acquisitions in order to be valid in the short term to bridge the domestic auto parts the gap with foreign counterparts, and in the context of the financial crisis, "overseas buy the dips" has become more feasible.

    The introduction of Shougang.

    Year of the Ox at the beginning of Tempo's Norstar Founders Group is a "provisional liquidator" and become the focus of public opinion, it is regarded as China's auto parts industry by the financial turmoil, a typical case.

    In fact, lay in the foundations of the international auto market has been secretly planning Tempo Group, new opportunities, in addition to increasing domestic market development, the private enterprises in this ambitious hope that through many years of overseas experience, through a series of international mergers and acquisitions to build more industrial landscape.

    To this end, the relevant government departments, and led the successful introduction of the Tempo Group, Shougang and other important strategic investors, and through international mergers and acquisitions and raising the level of their development, and actively explore the Chinese auto industry's "solid technology."

    No doubt the introduction of strategic investors to participate in international mergers and acquisitions increased Tempo capital strength. It is reported that the acquisition of Delphi is the first step Tempo, now the company also to other potential international acquisition of automotive spare parts tracking and information gathering, international mergers and acquisitions in preparation for the next step.

    But Tempo's Norstar Founders Group and continues to face "liquidation" of the question, to which, a lawyer said the Hong Kong side, although implicated by the financial turmoil, North Thailand's foreign exchange investment and hedging contracts produced a book Fukui, but North Thai start of the "provisional liquidator," not as outsiders might think are forced liquidation, but the company for the protection of corporate assets, assessment of financial instruments and other debt initiative to the provisional liquidator of the Hong Kong courts to apply.

    "Northern Thailand will not go bankrupt due to the provisional liquidator and the point." Norstar system, said a senior related businesses, Norstar Group of companies is one of Tempo, Tempo chain's overall auto industry strategic plan will not result in the North Thai capital market failures in the financial be shaken.

    As for the Shanghai Industrial Investment Group to the court of claims of up to 326.6 million yuan, the North has made Thailand a counter. According to the results of the audit Norstar, Norstar is not only not owe any funds Shanghai Industrial Investment Group, which owed Norstar but nearly 1 billion yuan in loans. The case is currently pending further results of the trial.

    From June 1997 the first mass production began in Bengbu, Anhui Province, North Thailand in just 7 years to become a hundred Chinese auto parts enterprises, and successfully entered the Shanghai GM, Chrysler and Beijing Benz matching system .

    In fact, in "North Thai Legend" is behind the Tempo Group, a 20-years of technological accumulation. Currently, the Tempo Group Detroit and Los Angeles in the United States established the Central R & D center. Among them, the Los Angeles R & D center has been able to bear the vehicle's design work, and have multiple vehicle platforms; Detroit R & D center is also able to take part of the chassis and powertrain design and development, technology development has a complete database.

    In addition, the Tempo Group will also shift resources to the internationalization of the Chinese mainland, continued research and development center designed by the United States and key parts assembly models of localization conversion, adaptive improvement, and the supporting system development and production technical support. Currently, the Tianbao Group in Shenyang, Beijing Academy of Engineering are equipped vehicles, chassis and parts R & D Center Technology Center, has formed a global integration of R & D system.

    According to informed analysis, is the Tempo Group's technical strength and international market experience, its success in attracting strategic investors to join.

    With the company's operating profit dropped sharply in the fourth quarter, in sharp contrast to its substantial growth in gross margin in the fourth quarter, an increase of more than 140%. The four quarter gross margin shows are: 14.23%, 12.28%, 13.40%, 32.41%.

    Other financial officers of listed companies, said after learning of the above, changes in gross profit margins the company may be increased or the cost of product sales to control prices, but as the production of engine-based companies, the cost should not change too much. Even if the removal of audit and non-audit factors, generally will not be tens of millions of differences.

    Department of the Central University of Finance and Accounting Professor Yue Yanfang teachers: this data it was not the normal reaction of the financial situation, but gross margin is the cost accounting, internal reports are, I hope the company will explain the reasons for fluctuations.

    The U.S. ranked fifth in the international accounting firm Grant Thornton auditors of a domestic branch also said that it seems just from the income statement, indeed suspected of inflated profits.

    March 5, 2009, Beijing Benz - Daimler-Chrysler, a procurement officer, told reporters: as the engine of this product, the cost is unlikely that seasonal changes, and according to their procurement data to see to the fourth quarter, the purchase cost has not increased but a small decline. In other words, the product price increase is unlikely.

    Ping An Securities analyst also share a car to say the buyers, he said: "If the first three months compared with sales of more than 50% down (on the sales of diesel four quarters, respectively: 1.023 billion, 11.16 billion 970 million, 4.32 million), arguably, the amortization of the costs will increase slightly, "this calculation, but should decline in gross margin fishes (Gross margin is equal to (operating income - operating costs) / revenue).

    In addition, calculation, 06-08 the three years since the company's gross margin is between 12% -18% volatility, and 06,07 and 08 in the first three quarters of the fluctuations are less than 3%.

    Even taking into account the company purchases raw materials in the fourth quarter cost reduction factor, but according to the Bohai Securities research report shows that the company expects 2009 steel and other raw material prices due to the sharp decline in Shangchaigufen product gross margin increased to 16.5 from 15.6% %.

    So, why Shangchaigufen to 4 quarter, the company's gross margin to double to enlarge it?

    2009 rely on profits?

    December 29, 2008, the major shareholder of Shangchaigufen easy to master finally settled. The former controlling shareholder of Shanghai Electric [7.371.24%] Group has 242 million shares held by the hands of the official transfer to SAIC hands.

    Although the controlling shareholders of listed companies and the association can provide the necessary engine car, the sale of long-term stability. But industry analysts have not recognized this.

    The analyst said that "no chance", the playing of a clever analogy: the same are the batteries for cell phones, you say matter sorted Nokia battery Samsung battery swap it?

    Guotai Junan, according to a study of Shangchaigufen known, Shangchaigufen main diesel engine development, manufacturing and sales of products for construction machinery, trucks, buses and other facilities. Its leading products focused primarily on the torque requirements of construction machinery and other products supporting the higher, while the rate for the automotive and other high performance requirements of supporting the product has not been significant improvement.

    The Bohai Securities analyst said: SAIC's commercial vehicle segment profit contribution of Shangchaigufen should be after 2010. More than 12L in Shangchaigufen heavy truck engine products mature, a subsidiary of SAIC, such as Shanghai Huizhong Automotive Manufacturing Company and the needs of Chongqing Hongyan Motor Co. will not rapidly increasing, while the contribution of light engine is also on the Shangchaigufen after 2010.

    Therefore, the company in 2009 still rely on diesel construction equipment and accessories necessary to make a living, but Guotai An Zhangxin analysts said: The demand for diesel fuel in 2009 than in 2008 will not increase after the high was low before the trend.

    Bohai Securities research report on Shangchaigufen that Shangchaigufen 2009 sales could drop 10%, gross profit margin increase slightly from 15.6% to 16.5%.

    Data show, the company nearly 4 years of high administrative costs, and the trend has steadily increased. If sales fall further, once the business has losses, then how will the company profitable? Do return to prostitution, again a new round of land sales, land sales subsidiary?

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