· FAW Xiali delisting crisis

On the evening of October 27th, as the most important strategic transformation product of Tianjin FAW Xiali Automobile Co., Ltd. (hereinafter referred to as “FAW Xiali”), FAW Xiali’s first urban SUV Junpai D60 was officially launched at Beijing MasterCard Center. At the press conference, the media’s attention to this model was unconsciously linked to the bleak future of FAW Xiali.
Just two weeks ago, FAW Xiali released its first three quarters of 2014 forecast that the company's net profit attributable to shareholders of listed companies was a loss of 670 million to 730 million yuan, a year-on-year loss of 575% to 635%. This means that from the start of the loss of net profit in 2013, in the past two years, FAW Xiali lost 1.2 billion yuan.
As the "national car" that opened the "car dream" of ordinary Chinese families, the Xiali car has won the national economic car sales for 18 consecutive years. Nowadays, profits and sales are in a state of continuous decline. The miracle creators of that year may face the risk of delisting.
“Lianzhongwang” faces delisting On October 30th, FAW Xiali officially released its 2014 third quarter performance report. The report shows that in the third quarter of this year, revenue reached 666 million yuan, and the net profit attributable to shareholders of listed companies was -2.6 billion yuan; in the first three quarters of this year, operating income was 2.242 billion yuan, and net profit was 690 million yuan, a decrease of 599.87 over the same period. %. This is the worst data among listed car companies that have issued quarterly reports.
In response to the loss, FAW Xiali said that the company is currently in the transition period of product structure adjustment, affected by factors such as market consumption upgrade, partial city purchase restriction, national fuel economy subsidy policy adjustment, etc., the economic car market has experienced negative growth, the company's production and sales, Business has been affected. At the same time, the production and sales volume of Tianjin FAW Toyota Motor Co., Ltd., which the company participated in, decreased year-on-year, resulting in a decrease in investment income contributed to the company compared with the same period of last year.
In fact, this explanation is not the first time in the financial report of the company. In 2013, FAW Xiali achieved operating income of 5.6 billion yuan, down 25.04% year-on-year, operating profit of 700 million yuan, net profit attributable to shareholders of the parent company - 4.7 billion yuan, down 1503.44%. The company is also said to be affected by factors such as market consumption upgrades, purchase restrictions in some cities, and adjustments to national fuel-saving subsidies.
Looking through the previous earnings report of FAW Xiali, the company’s net profit collapsed at a glance: In 2010, FAW Xiali’s net profit attributable to shareholders of listed companies was about 300 million yuan, in 2011 it was 109 million yuan, and in 2012 it was 34 million yuan. . In 2013, FAW Xiali began to transform into “negative Weng”, with a loss of 477 million yuan for the whole year.
Looking at these book figures, these unsatisfactory results actually include the investment income of FAW Toyota and the huge subsidies of the government. Taking 2013 as an example, FAW Xiali lost 477 million yuan, FAW Toyota's investment income was 973 million yuan, and the auto industry lost a total of 1.45 billion yuan. In addition, if deducting non-recurring profit and loss items, government subsidies "transfusion", the company in 2013 The net profit will fall by as much as 2422%. In other words, if there is no joint venture “transfusion” and government subsidies, FAW Xiali will face a more serious situation.
In addition to the plummeting profits, FAW Xiali’s car sales also suffered a continuous decline. In the first half of the year, the company's Xiali series and Wei series achieved sales of 37,301 units, down 48% from 71,526 units in the same period last year. Among them, the Xiali series achieved sales of 30,437 vehicles in the first six months, down 42% compared with 52,883 vehicles in the same period last year; the Wei series achieved sales of 6,864 vehicles, which was 63% lower than the 18,643 vehicles in the same period last year.
According to relevant regulations, if a listed company loses its performance for two consecutive years, it will be subject to special treatment of the delisting risk warning by the exchange. The loss for three consecutive years will be forcibly delisted. This means that if FAW Xiali can't turn its profit into profit before the end of next year, the old brand that once smashed will face a delisting crisis.
The fall of the "National Car" Xiali's predecessor was the Tianjin Mini Car Factory. The factory's first red hatchback Xiali came out in 1986. Since then, the Xiali sedan has become popular all over the country. “When the street is full of yellow hair and the front of Tiananmen Square, it is the true portrayal of the year.”
In the 1990s, Xiali produced 150,000 cars and 200,000 engines a year. It has been the number one seller of national economic cars for 18 consecutive years. It surpassed the brands such as Santana and Beverly at that time and became the leader of domestic cars.
In 1997, the company was restructured and established Tianjin Xiali Automobile Co., Ltd., and successfully landed on the Shenzhen Stock Exchange two years later.
Around 2000, Xiali’s share of the national taxi market exceeded 40%, and it was more than 70% higher in Beijing. At that time, Xiali’s taxis were used to walk through the streets of Beijing’s streets, and it was considered to be the first richest person. Not only that, Xiali also opened the "car dream" of ordinary Chinese, the first car that many people bought in their lifetime is Tianjin Xiali. It can be said that Xiali was a well-deserved "national car" at the time.
After the sales volume exceeded 100,000 in 1999, the sales of Xiali after 2000 suddenly collapsed. In this year, FAW, which was eager to make a difference in its own initiative, reorganized Tianqi and became the largest automaker merger and reorganization case in China at that time. Tianqi transferred 60% of the 84.97% stake in Tianjin Automobile Xiali Company to FAW, and Tianjin FAW Xiali Automobile Co., Ltd. was established and officially became a subsidiary of FAW.
The merger of Tianqi and FAW was originally based on market complementarity considerations. FAW has been in the mid-size car and commercial vehicle field, but it is a blank in the small car field. At that time, Tianqi was the leader of small cars in China. Public opinion believes that this restructuring is a good thing for mutual benefit. Therefore, the Tianjin Xiali, which is in a difficult situation, will have the opportunity to regenerate. At the signing ceremony, Zhang Shitang, the chairman of Tianqi Group, declared that this was a “strong alliance”. However, the days after Xiali’s “Tianyi Reorganization” became increasingly difficult.
Since 2002, the Chinese auto market has entered the “golden development decade”. However, after the reorganization, FAW Xiali did not seize the good opportunity of development, but positioned itself as the "economical car" production base, and the product launch speed was slow, and it was difficult to keep up with the times. Therefore, the glory of the "national sedan" has become the yellow flower of yesterday.
For the reason of the decline of Xiali, Jia Xinguang, chief analyst of China Automotive Industry Consulting and Development Corporation, pointed out that Tianqi has only acted as a medium for FAW and Toyota in the “Tianyi Reorganization”. Through the “Tianyi Reorganization”, FAW successfully achieved a joint venture with Toyota, and also owned an economical sedan brand. In 2004, it became the first auto company in China with an annual output of more than one million vehicles.
“The major shareholders continue to absorb gold from it, but without investing and supporting it, it has caused the shrinking of Xiali’s business sector today. Now that the old one has finished eating, the performance will drop and lose.” Jia Xinguang believes that the main FAW shares now The energy is still on the development of the Pentium and Red Flag brands. Therefore, the future of Xiali is worrying. "The products are increasingly marginalized and the brands are also marginalized. If there is no new investment in the next few years, the market will automatically abandon."
Multi-pronged approach to turn over Although the main business is in trouble, but since July, FAW Xiali's share price has risen sharply. The analysis believes that the strong expectation of the capital market on the overall listing of FAW is the main reason for promoting the popularity of FAW Xiali in the stock market. A few days ago, the FAW-Volkswagen share ratio adjustment plan became clearer. This was interpreted by the capital market as an obstacle to the overall listing of FAW Group, and the listing process may enter the fast lane. However, the loss of FAW Xiali for two consecutive years may drag down the overall listing process of FAW Group. Therefore, the industry believes that FAW will take active measures to avoid the risk of direct delisting of FAW Xiali.
"Since the beginning of the Spring Festival, General Manager Xu Xianping has visited Tianjin FAW three times in less than four months, which shows that the leaders of the Group are concerned about the operation of the company." Tianjin FAW Deputy General Manager and General Manager of Sales Company Dang Ren In an interview with reporters, he emphasized.
FAW is indeed in action, the first of which is to carry out a "big change of blood" to the top. On April 1 this year, FAW Xiali issued a notice of change of senior management, saying that the third meeting of the sixth board of directors of the company elected Zhang Hongru as the vice chairman of the board of directors of the company, and appointed Tian Qing as the general manager of the company; The board of directors decided to hire Jin Xulong as the company's deputy general manager.
Looking at Tian's clever resume, he was also in danger during his tenure at Tianjin FAW: In the early stage of Tianjin FAW restructuring, Tian Cong led the company to complete the “pyramid” product strategic layout, which made Tianjin FAW, which had poor sales of its products, regained its new life. Sales volume has increased year by year. Later, Tian Cong joined FAW Toyota. Under his leadership, FAW Toyota delivered a transcript with a year-on-year growth of 12%. The return of Tian Smart was also considered to be the role of "fire brigade captain".
However, for Tian Chuang and his team, it is not easy to reverse the huge loss situation of FAW Xiali. Some observers pointed out that the problems faced by FAW Xiali management are indeed many. However, if the sales of Xiali products have not changed, even if the company will not give up the Xiali brand, but the market does not recognize, the brand survival crisis is still very large.
To this end, FAW Group's solution for FAW Xiali is: take the initiative to adjust the product structure and enhance the brand image. Among them, the launch of the Junpai brand and the listing of the Chunpai D60 products are considered to be the "turning over" dream of FAW Xiali.
At the scene of the Junpai D60 listing conference, Tianqi, the general manager of FAW Xiali, expressed the sincerity of FAW Xiali to the outside world. He said that in order to ensure the success of the Chunpai D60, Tianjin FAW has mobilized almost all the resources that can be mobilized. Among them, in research and development, FAW Group has rarely given technical support to Tianjin FAW to create Chunpai; in production, the new Huali factory is modeled after Toyota's management model; in parts and components, Bosch, Denso, China The four internationally renowned suppliers of Aisin are included in the component system of Chunpai.
It is reported that the Junpai D60 has two models of 1.5L and 1.8L displacements, and its price ranges from 64,900 to 9.99 million yuan, which is slightly lower than the pre-sale price of 70,000 to 120,000 yuan. FAW Xiali chose this price range of SUV as the first product of its new brand Chunpai, which is considered to be inseparable from the current competitive landscape of the Chinese auto market. Today, SUV is the most popular market segment in China's auto market. Since 2010, it has been growing at an average annual rate of more than 20%, far higher than the growth of the passenger car market by less than 10%. Among them, the SUV segment of 70-90 million yuan is mostly occupied by the selling models of independent brands. Dang Ren also revealed that the reason why he chose SUV as the first product of Junpai brand is to pay attention to the development prospect of this blue ocean.
However, some analysts pointed out that the SUV market entered a relatively high-speed development period, the launch of the Chunpai D60 is a good move to adapt to the general trend. However, Xiali’s change is too slow, because the market segment where Jun D60 is located has changed from blue ocean to red sea since last year. According to incomplete statistics, in addition to the first batch of listed Wing Bo and Angola, there are nearly 20 small SUVs listed in this year, including Dongfeng Peugeot 2008, Guangqi Honda Binzhi and Beijing Hyundai ix25. In addition to the brand and product advantages of these joint venture products, the price has also dropped to the range of 100,000 yuan. Therefore, whether the Jun D60 can win the market is still unknown.
In addition, FAW Xiali seniors also revealed that two new cars will be launched next year to effectively boost sales. Among them, the new Xiali N7 will further reduce the car door threshold and launch a 1.0L manual transmission model; the new Xiali N5 will launch an automatic transmission model to enrich the existing product lineup. After the launch of the D60, the Junpai brand will launch a new A-class sedan next year. Dang Ren said, "The sales volume of the model will be 60,000 units next year, and the monthly sales will exceed 5,000 units, which is equivalent to taking up 75% of sales this year."
For FAW Xiali, it is now standing at the birth and death gate. Release new brands, launch new products, replace new teams... all these changes are in achieving “self-salvation”. As for the results, it can only be given by the market.

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