Haima Motors: It is better to sell cars than to sell houses

Text/Leju Finance Li Shanshan

According to the 2021 annual report disclosed by Haima Automobile, the company achieved operating income of 1.763 billion yuan during the period, an increase of 28.18% year-on-year; the net profit attributable to the mother was 112 million yuan, an increase of 108.36% year-on-year. This is the second time in five years that Haima Motors has turned a loss.

However, the key to its turnaround is not the performance improvement of its main business, following the "selling house to save itself" in 2019, In 2021, Haima Automobile once again achieved profitability by selling assets such as its subsidiaries.

Excluding non-recurring profit and loss items, the net loss was as high as $432 million.

Excluding external factors such as asset sales and government subsidies, Haima Automobile's vehicle sales business remains weak. Coupled with the end of 2021 for the end of Xiaopeng Automobile OEM business, its 2022 or a more difficult year of development.

Lost the "gold lord" Xiao Peng

According to public information, Haima Automobile currently has four models on sale, namely the plug-in hybrid model Haima 6P, the fuel model Haima 7X and Haima 8S, and the pure electric vehicle Aishang EV.

In 2021, Haima Automobile's annual sales volume was 29,500 units, up 66.06% year-on-year, and after four consecutive years of decline, sales increased. But even so, compared with the highlight of nearly 220,000 vehicles in 2016, the situation is not what it used to be. It is reported that Haima Automobile's former competitors Geely Automobile and Great Wall Motors have joined the Million Club.

It is worth noting that in the sales of only 29,500 vehicles, there is also "moisture", including the Xiaopeng G3, which is oem for Xiaopeng Motors. According to the data, the cumulative terminal sales of Xiaopeng G3 in 2021 are 28,500 vehicles.

It is understood that in September 2017, Haima Automobile and Xiaopeng Automobile reached a cooperation, Xiaopeng Automobile will authorize Haima Automobile to use its trademark and related technologies to produce the agreed products, and Haima Automobile is responsible for the production of the agreed products. The production capacity of the agreed model is preliminarily determined to be 50,000 units per year, and the validity period of the agreement is from the date of signing to December 31, 2021.

As the agreement expired and Xiaopeng Automobile prepared to build its own factory, Xiaopeng gradually withdrew from Haima Motors, and since the second half of last year, Haima Automobile sales have begun to shrink.

This trend continues into 2022, and Haima Automobile, which lost Xiaopeng, saw a significant decline in sales in the first quarter of this year. From January to March 2022, Haima Automobile's cumulative sales volume was 5730 units, down 18.19% from 7004 units in the same period last year.

Among them, sales in March showed a cliff-like decline. According to the production and sales express, Haima Automobile sold 2,048 units in March, a sharp decline of 37.54% year-on-year and a 4.43% decline from February. In the sub-segment, Haima Automobile's MPV (7X model) sales were only 390 units, a year-on-year decline of 58.55%; SUV models (Haima 8S, 6P) sold 1658 units, down 29.08% year-on-year.

"Selling a house to save yourself" again

In 2021, Haima Automobile achieved operating income of 1.812 billion yuan, an increase of 25.1% year-on-year; net profit attributable to the mother was 112 million yuan, an increase of 108.36% year-on-year, on the basis of a net loss of 1.335 billion yuan in the same period of the previous year, to achieve a turnaround.

However, behind the profits are the use of "extraordinary means". During the reporting period, Haima Automobile made a total profit of 545 million yuan through the disposal of non-current assets, government subsidies and debt restructuring, an increase of 332.54% year-on-year.

Excluding non-recurring profit and loss items, Haima Automobile still suffered a significant loss, with a non-net loss of up to 432 million yuan.

In fact, this is not the first time that Haima Automobile has achieved a turnaround through the sale of assets, since 2019, the company's main benefits in the past three years have come from the disposal of non-current assets.

In 2019, affected by the continuous plunge in sales in the previous two years, Haima Automobile lost money for two consecutive years, and in April 2019, it was "hatted" and the stock code was changed to "*ST Haima", which was on the verge of delisting. In order to get rid of the crisis, Haima Automobile sold 401 properties, and the net profit attributable to the mother rose to 85.1962 million yuan that year.

In 2020, Haima Automobile further sold more than 140 properties, and successfully achieved "star picking" in June of that year, and the stock code was changed from "*ST Haima" to "ST Haima", and the delisting risk was resolved.

By 2021, Haima Automobile has repeated its old tricks, not only "selling houses" but also transferring part of its equity. According to the financial report, Haima Automobile sold 100% of the equity of Hainan Jinpan Industry and 95% of the equity of Zhengzhou Lanma Industrial Co., Ltd. during the period, adding a total of 302 million yuan of net profit attributable to the mother of the company.

At the same time, it also sold its 7% stake in Hainan Bank, cashed out 330 million yuan, and successfully "removed the hat" in May of the same year, and the stock name changed back to "Haima Automobile".

With the continuous "selling and selling" of Haima Automobile, its assets are also shrinking. As of December 31, 2021, its total assets were only 8.207 billion yuan, down 10.87% year-on-year. In addition, its current assets fell to $3,181 million, while its current liabilities reached $3,443 million, exceeding its current assets by $262 million.

Reduce R&D investment

In recent years, relying on the policy advantages of Hainan Free Trade Port and the industrial advantages of the hinterland of the Central Plains, Haima Automobile has actively transformed into new energy vehicles and intelligent vehicles.

In the annual report, Haima Automobile clearly stated that it will continue to innovate in the fields of intelligent pure electric vehicles, plug-in hybrid vehicles and hydrogen vehicles around the national new energy vehicle "three vertical and three horizontal" research and development layout.

In terms of manufacturing progress, at present, in terms of hydrogen energy vehicles, Haima Automobile has completed the body, chassis, on-board hydrogen system, power system data design, prototype vehicle trial production completed, the cruising range of 800km; in terms of vehicle controller, the new generation of vehicle control development, completed the power system solution, underlying software, system architecture, vehicle domain controller hardware optimization, function definition and electronic architecture design and system integration testing work.

In terms of product planning, Haima Automobile said that the pure electric vehicle 7E is planned to be put on the market in the fourth quarter of 2022; the third generation of hydrogen energy vehicles is planned to carry out simulated demonstration operations in 2022 and have industrialization conditions in 2023.

Recently, Haima Automobile is also "expanding its territory" in the field of new energy through cooperation and investment with other companies.

As we all know, entering the field of new energy can be described as a "burning money" war, and last year, Haima Automobile not only did not expand related expenditures, but also reduced R & D investment.

According to the financial report, Haima Automobile invested 150 million yuan in research and development in 2021, down 36.08% from 235 million yuan in the same period of the previous year, the lowest value since 2012.

During the period, the company's R & D personnel 309 people, a decrease of 225 people over the same period of the previous year, the proportion of changes as high as 40% ; the number of R & D personnel accounted for 5.04%, down 12.06 percentage points year-on-year, the R & D team talent loss is serious. In 2018, there were 1413 R&D personnel.

In addition, the expansion of vehicle-related production capacity, including new energy vehicles, is also at a low level. In 2021, the book balance of Haima Automobile's construction projects was only 0.46 billion yuan, which was basically the same as 0.41 billion yuan in 2020, which was at a relatively low level.

In contrast, Haima Automobile's former competitors Geely Automobile and Great Wall Motors are expanding their research and development teams in order to occupy a high point in the future automotive market competition. In 2021, Great Wall Motors will invest 60 times more in research and development than Haima Motors.

Source: Automotive V-line