With a net loss of 706 million yuan and assets auctioned for the second time, when will Zotye Automobile get out of trouble?

In addition to the fluctuating stock price, the asset flow of Zotye Automobile has always been a topic of concern in the industry.

A few days ago, the land use rights, buildings, turnover materials and other assets of Chongqing Zotye Automobile Industry Co., Ltd. (hereinafter referred to as "Chongqing Zotye") were auctioned for the second time on the Alibaba Auction Bankruptcy Liquidation Platform, and because no one signed up for bidding, it was auctioned again. It is understood that the appraisal price of the relevant assets of Chongqing Zotye is 1.365 billion yuan, which is discounted by 20% after the first auction and the starting price of the second auction is 1.092 billion yuan.

Relevant people said that if the third auction is still auctioned, it will continue to be auctioned at a 20% discount, and the proceeds of the auction will be used to pay off debts. At the same time, the person also said that the auction object of Chongqing Zotye is a package auction, and even if it is auctioned, it will not be split into auctions.

Assets are not in demand

It is understood that the auction of Chongqing Zotye is not a subsidiary of Zotye Automobile, Chongqing Zotye is the core supplier of Yongkang Zotye's subordinate branch, and Yongkang Zotye is a wholly-owned subsidiary of Zotye Automobile. To put it simply, Chongqing Zotye and Zotye Automobile belong to the brand licensing relationship. The public auction was held by Chongqing Pelzer Automotive Interior System Co., Ltd., because on April 23, 2021, Chongqing Zotye Automobile Industry failed to pay off its debts as they fell due, so on April 23, 2021, it applied to the Fifth Intermediate People's Court of Chongqing Municipality for bankruptcy liquidation of Chongqing Zotye Automobile Industry. On May 15, 2021, the court ruled to accept the case in accordance with the law, and finally declared Chongqing Zhongtai bankrupt and liquidated.

It is worth mentioning that the assets of the auction include the land use rights of two industrial lands located in Bishan District, Chongqing City; 26 housing buildings, including stamping workshop, welding workshop, assembly workshop, parts workshop, model assembly workshop, painting workshop and office building; road pipe network, fence, parking lot, basketball court, badminton court, outdoor street lamps, septic tanks and other factory structures and supporting facilities. In addition, the "China Times" reporter noted that on the Ali auction platform, there are also a number of bidding targets such as cars, raw materials, semi-finished product patents, and some of them are also in the state of stream auction.

Zotye Automobile was also known as the "National God Car", and its products covered subdivisions such as cars, SUVs, MPVs and new energy. At that time, with the appearance and shape comparable to luxury cars, it won the favor of many consumers, and achieved sales of 330,000 vehicles in 2016, becoming the top ten domestic independent brand sales. With the gradual increase in the number of purchase users, the quality problems of Zotye Automobile have also been frequently exposed, and finally after the capital chain was broken, Zotye Automobile entered the road of bankruptcy.

On October 8, 2021, Zotye Automobile announced that Jiangsu Shenzhen Commercial Holding Group Co., Ltd. became an investor in the restructuring of Zotye Automobile and signed the "Restructuring Investment Agreement of Zotye Automobile Co., Ltd." Subsequently, on October 27, Zotye Automobile said that the 2 billion yuan of restructuring funds have been fully in place, and the funds will be used to pay the reorganization costs, pay off debts, and use the advantages of industrial synergy to help Zotye Automobile restore the national sales network as soon as possible. As for the reason for the acquisition of Zotye, Jiangsu Shenzhen Shang said: "It is to obtain the automobile production qualification and produce and sell the whole vehicle." Judging from the statement of Jiangsu Shenzhen Businessmen, Chongqing Zotye cannot get capital recognition like Zotye Automobile, the fundamental reason is that Chongqing Zotye does not have production qualifications, but only Zotye's production base in Chongqing, and the auction is only the assets of the Chongqing factory.

"China Times" reporter learned from Fan Yongjun, secretary general of the Chengdu New Energy Automobile Industry Promotion and Application Promotion Association, that the root cause of Chongqing Zotye's auction is that the price is too high, and the ideal car obtained Lifan's passenger car production qualification for only 650 million yuan that year, in contrast, just auctioning the land, plant and other assets of Chongqing Zhongtai will exceed 1 billion yuan, and there is no production qualification, and the price is too high. Moreover, all localities are now seizing the opportunity of automobile industry development, car companies with production qualifications will receive strong support from local governments, production base support is not difficult, there is no need to spend a lot of money to buy production bases.

Net loss was 706 million

On April 26, Zotye Automobile released its 2021 annual report, the company achieved operating income of 825 million yuan from January to December 2021, down 38.34% year-on-year, and the net profit attributable to the shareholders of the listed company was a loss of 706 million yuan, a loss of 93.18% year-on-year, and earnings per share was -0.3200 yuan.

Although it is still in a loss situation, it has narrowed significantly compared with the loss of nearly 10 billion yuan in 2020, which also indicates that Zotye has temporarily passed the dangerous period. However, when to resume car sales has also become the primary problem that Zotye needs to face. It is understood that Huang Jihong, chairman of Jiangsu Shenzhen Commercial Group, has visited the Yongkang factory many times for field investigations and formulated a series of plans. Among them, in terms of brand strategy, it will build a characteristic strategic system for Zotye, Junma and other brands; the short-term plan is to reorganize its own brands, and concentrate resources and boost sales by merging homogeneous models, optimizing product sequences, optimizing cost structure and reorganizing dealer networks; long-term plans are to build a brand matrix in the form of acquisitions and joint ventures to lay out the high-end new energy vehicle market.

However, at present, the promotion of Zotye Automobile's product strategy, corporate strategy and other planning is still slow. The reporter learned that at present, the production base of Zotye Automobile is basically in a state of suspension, and the layout of online car-hailing is also in the initial preparatory stage. As for the issue of resuming work, Zotye said in its annual report that a model involved hundreds of suppliers, and there were a small number of bankruptcies in the original supply chain system. It takes a certain amount of time to reopen the mold. Next, the supply chain system will be reshaped, and the joint development of new and old suppliers and the selection of core products will be adopted to achieve a smooth resumption of work and production.

In the view of Cui Dongshu, secretary general of the Association, it is not an easy task for Zotye Automobile to seek a share in the new energy vehicle market. "Entering the high-end market, not only requires a lot of capital investment in the early stage, but also enterprises must have deep technical accumulation." Especially after foreign brands of new energy models have entered the Chinese market, the possibility of Zotye Automobile wanting to get a piece of the pie is very small. The low-end new energy vehicle market is different, and the future development potential is very large. Cui Dongshu said.

Responsible Editor: Li Yan'an Editor-in-Chief: Yu Jianping