Chinanews client, Beijing, August 28 (Zhang Xu) An announcement of judicial reorganization made everyone suddenly realize that the former "motorcycle king" Lifan has come to the brink of delisting.
Lifan shares recently issued an announcement stating that Lifan shares were suspended for one trading day on August 24 and resumed trading on August 25. The stock was subject to a delisting risk warning, and the abbreviation was changed to *ST Lifan. As of August 28, Lifan has dropped its limit for 4 consecutive days. In the stock trading discussion forum, some investors believe that "there will be at least 10 drop limits."
Lifan has dropped its limit for 4 consecutive days. Data comes from a straight flush
From workshop to "Motor King"
The story of Lifan began 30 years ago. In 1991, the founder Yin Mingshan heard from a friend of the motorcycle factory that Chongqing's local motorcycle giant Jialing and Jianshe was unwilling to sell the engine to a small repair shop, and the market demand was great. Yin Mingshan realized that this is a huge market and that the engine is the core of the motorcycle.
In 1992, Yin Mingshan registered and established the "Hongda Vehicle Parts Research Institute" to assemble the engine parts purchased from the maintenance department of the Construction Group for secondary sales. Relying on imitation and modification, Yin Mingshan soon created key motorcycle parts and founded Chongqing Lifan.
In 1994, Yin Mingshan developed a 100CC four-stroke engine unique to the country at that time, and a 100CC restart engine. In 2001, Lifan Group developed a small-displacement water-cooled engine with independent intellectual property rights and a horizontal 110-type three-valve engine, leading the way in technology.
Also in this year, Lifan's sales surpassed Jialing and Jianshe Motors and became the leader of Chongqing's motorcycle industry. Lifan is not only a household name in China, but also its export business. In the Russian market, Lifan has ranked first in sales among Chinese auto brands for eight consecutive years.
Lifan went public in 2010, and its market value once rushed to more than 30 billion. Yin Mingshan, 72, aspires to be the richest man in Chongqing. "Motor King" deserves it.
Data map: Chongqing Industry. Photo by Liu Xian
"Plaagiarism" and "deception" make Lifan stuck in the quagmire
With the popularity of the domestic automobile market taking off, Lifan began the road of making cars. In 2003, Yin Mingshan acquired 80% of Chongqing Special Purpose Vehicle Manufacturing Plant and changed the company name to Chongqing Lifan Automobile Co., Ltd.
In 2006, Lifan’s first self-designed "Lifan 520" was officially launched, but only more than 10,000 units were sold a year. The BYD F3, which was launched at about the same time, sold more than 10,000 units in one month.
The sales of the first car were dismal, and Yin Mingshan changed his strategy. In 2009, the "Lifan 320" went on the market, and the highest peak sold more than 7,000 units in one month. This was also the first time that Lifan was questioned for plagiarizing MINI COOPER.
Since then, "Lifan 530" and "Lifan 630" are similar in appearance to FAW Toyota Vios and Corolla respectively. The front face of the SUV "Lifan X80" resembles the GAC Toyota Highlander, and the profile is highly similar to Hyundai Gree. It focuses on the MPV market. "Lifan Xuanlang", the side of the body is similar to the Changan Ford S-MAX, which has been questioned by plagiarism.
On June 26, 2012, Lifan announced two industrial projects with a total investment of more than 1.1 billion yuan, including a new energy battery project of 670 million yuan and a research and development center project of 477 million yuan, to fully deploy the new energy automobile industry. However, the main automobile business started to lose money, with a loss of 23.97 million yuan in 2014. Since then, the loss has continued to expand.
The picture shows Lifan's first driverless car based on the Apollo platform solution at the press conference. Photo courtesy of Lifan
In 2016, Lifan's involvement in the "deception" incident was a major blow to it. The "Decision of the Ministry of Finance on the Special Inspection of Chongqing Lifan Passenger Vehicle Co., Ltd.'s New Energy Vehicle Promotion and Application Subsidy Funds" pointed out: Among the new energy vehicles that Lifan Passenger Vehicles applied for the 2015 central government subsidy funds, a total of 2,395 vehicles did not meet the application requirements , Involving 114.08 million yuan of central government subsidy funds, and disqualification of 2016 central government subsidy funds for Lifan passenger cars.
Lifan’s image plummeted due to cheating. After years of losses, Lifan’s funds had problems.
Lifan's arm is broken and it is still difficult to survive
From a financial point of view, Lifan in the quagmire can't run.
In 2016, its net profit attributable to its parent fell sharply by 77%, and its operating income fell endlessly, from 12.6 billion yuan in 2017 to 7.45 billion yuan in 2019.
According to the financial report of Lifan shares, in the first quarter of 2020, its revenue was 564 million yuan, a year-on-year decrease of 74.88%, and a net profit loss attributable to its parent was 197 million yuan, a year-on-year decrease of 103%.
At the same time, Lifan shares are in debt. As of the end of the first quarter of this year, its total assets were 18.293 billion yuan, total liabilities were 15.719 billion yuan, and the debt-to-asset ratio reached 85.93%.
Lifan tried to sell assets to survive. In January 2017, in order to save money, Yin Mingshan sold 90% of Chongqing Lifan Football Club to Wuhan Modern Technology Industry Group Co., Ltd.
In February 2018, Lifan shares announced that it plans to build a new plant in Chongqing Liangjiang New District and relocate the production base of Lifan passenger vehicles to obtain land transfer proceeds of approximately 1.5 billion to 2.5 billion yuan. In December of that year, Lifan sold Chongqing Lifan's passenger car production qualifications to Ideal Auto for a price of 650 million yuan.
Local car companies in Chongqing have already entered the field of smart cars by Changan, Hengtong, Lifan and Xiaokang. Photo by Zhang Yan
Teams, real estate, car manufacturing qualifications... these assets are still difficult to solve the huge debt problem. "Lifan's vehicle production qualifications have greatly depreciated. In recent years, too many car companies have sold less than 1,000 bankruptcies, so the production qualifications are not that attractive." Zhang Xiang, an automobile analyst at the Talent Exchange Center of the Ministry of Industry and Information Technology, told reporters.
On August 6, 2020, Lifan Industrial, the controlling shareholder of Lifan shares, applied to the Fifth Intermediate Court of Chongqing Municipality for judicial reorganization on the grounds that it could not pay off its due debts and its assets were insufficient to pay off all debts. The court ruled to accept it.
On August 21, the Chongqing Bankruptcy Court announced that it had accepted the bankruptcy and reorganization applications of 22 Lifan companies including Lifan Industry (Group) Co., Ltd., Chongqing Lifan Passenger Vehicle Co., Ltd., and Chongqing Lifan Automobile Sales Co., Ltd.
The Fifth Intermediate People’s Court of Chongqing Municipality found that Lifan could no longer pay off its due debts, and that its current monetary capital was 43 million yuan, and its due debt was 1.196 billion yuan. Other properties were poorly liquid and could not be realized, so it should be determined that they were obviously lacking in repayment according to law. ability.
Can Lifan still run?
In June of this year, an investor asked Lifan's secretary of the board of directors why he did not vigorously develop the motorcycle business, but instead engaged in the automobile business that he was not good at. In response, Lifan’s secretary of the board of directors responded: “The company’s motorcycles are a long-term advantage and will continue to develop and do better and stronger.”
The industry is generally skeptical about Lifan's motorcycle business. On the one hand, its performance is declining. From January to July this year, the cumulative sales of Lifan motorcycles were approximately 287,600, a year-on-year decline of 17.85%; on the other hand, Lifan motorcycles were not very competitive.
2020 5th South China International Electric Vehicles and Parts Exhibition Site Photo by Cheng Jingwei
Caitong Securities analyst Li Yongliang believes that the current domestic motorcycle companies have a harsh living environment, and companies that can survive have to rely on exports. Although Lifan shares have been deployed in overseas markets earlier, according to the current globalization situation, exports cannot be used as " The only" way back.
Zhang Xiang said, “Compared with 20 years ago, the market has undergone many changes. Many cities have banned motorcycles and market demand has shrunk significantly. From the perspective of exports, domestic motorcycles are relatively low-end in the international market and are less well-known. It is also unable to compete with Honda and other brands. Lifan wants to turn itself over from the motorcycle business, and hopes little."
Looking around, almost all of the early listed motorcycle companies have "sold themselves." China's Jialing, the former "motorcycle king", has been reorganized and turned into ST electric energy, which has nothing to do with motorcycle business. Qianjiang Motorcycle was acquired by Geely in 2016, and its business was tepid.
For today's Lifan, the dream of building a car has become a thing of the past, and the future is still uncertain. According to industry insiders, Lifan is already powerless.
It is worth mentioning that since June this year, news about Geely taking over Lifan has been reported from time to time. In this regard, Lifan has issued an announcement in response to Geely's acquisition rumors, saying that the relevant media rumors are untrue. "Generally speaking, car companies will not buy such tail-end companies, and acquisitions generally carry a heavier burden." said Cui Dongshu, secretary general of the Association.
"The products made by Lifan by imitating are seriously backward and unable to keep up with the trend of the times. In addition, the new energy vehicles produced cannot meet the standards, and eventually insolvency will file for bankruptcy. Basically, there will be no car companies buying Lifan, although the acquisition price is very low. But at the same time, it has to bear huge debts. If the debts can be forgiven, there may be hope." Zhang Xiang told Chinanews.com. (Finish)