Investigation by CSRC! “Motorcycle king” Lifan shares cool: a huge loss of 2.6 billion in half a year

On the evening of October 13, Lifan shares announced that the controlling shareholder and the actual controller were investigated by the CSRC for suspected violations of trust laws and regulations. *On the evening of October 13, 2010, Lifan Co., Ltd. announced that it had received the notice from Chongqing Lifan Holding Co., Ltd. (hereinafter referred to as “Lifan Holdings”) and the actual controllers of the company, Yin Mingshan, Chen Qiaofeng, Yin Xidi and Yin Suowei on October 12 and 13, 2020 After receiving the notice of investigation issued by China Securities Regulatory Commission (hereinafter referred to as “CSRC”), China Securities Regulatory Commission (CSRC) decided to file a case against Lifan holdings, Yin Mingshan, Chen Qiaofeng, Yin Xidi and Yin Suowei who were suspected of illegal information disclosure. In accordance with the relevant provisions of the securities law of the people’s Republic of China, the CSRC has decided to file a case for investigation. Lifan holding is the controlling shareholder of the company, holding 47.08% of the company’s shares. Mr. Yin Mingshan, Ms. Chen Qiaofeng, Mr. Yin Xidi and Ms. Yin Suowei are all directors of the company. The above four directly hold 0.49% of the company’s shares; the above four indirectly hold 47.08% of the company’s shares through holding shares held by Lifan. < p > < p > Lifan shares also pointed out the risks in the announcement, saying that the investigation items filed this time are for the controlling shareholders and actual controllers of the company, and have nothing to do with the daily operation and management and business activities of the company, and have no impact on the normal operation of the company. In addition, the company is ruled by the court to accept reorganization, there is the risk of being declared bankrupt due to the failure of reorganization. Even if the company’s restructuring and implementation is completed, if the company’s follow-up operation and financial indicators do not meet the requirements of relevant regulatory regulations such as the stock listing rules, the company’s shares still have the risk of delisting risk warning or delisting. On October 13, Lifan Co., Ltd. also issued a notice on the resignation of the company’s supervisors by the managers, indicating that the board of supervisors of Lifan shares had received a written resignation report from the supervisor Ms. LAN Tingqin recently. Ms. LAN Tingqin, the supervisor, resigned from the company’s supervisory post for personal reasons, and will no longer hold any post in the company after resignation. < p > < p > the resignation of Ms. LAN Tingqin did not result in the number of board of supervisors lower than the legal minimum, nor did it affect the normal operation of the board of supervisors. According to the relevant provisions of the company law and the articles of association, his resignation report shall take effect from the date when it is delivered to the board of supervisors of the company. Lifan has been reorganized or rejuvenated. Geely and the local government have “taken over” Lifan shares since 1992. Lifan was once the largest motorcycle manufacturer in China, known as the “king of motorcycles”, and the first private car company listed in China. However, the current Lifan shares obviously did not keep up with the pace of progress of the times. At the same time, there are many problems within the company, such as unfavorable operation and heavy debt. < p > < p > in August this year, Lifan shares finally failed to survive, and publicly recruited and reorganized investors in the market. On August 7, Lifan holdings applied to the court for judicial restructuring on the grounds that it could not pay off its due debts and its assets were insufficient to pay off all debts; on August 21, Lifan holdings received the civil ruling and decision letter served by the court, ruling to accept the creditor’s application for restructuring of the company. < / P > < p > then, the “White Knight” behind Lifan finally surfaced. On September 14, Liangjiang fund and Geely maijie submitted the registration materials for investors intending to restructure to the manager of Lifan holdings as a consortium. At the end of September, the above investors were officially identified as potential investors. < p > < p > according to Tianyan data, the majority shareholder of Geely maijie Investment Co., Ltd. is Geely Technology Group Co., Ltd., with a shareholding ratio of 99%. The actual controller is Li Shufu, chairman of Geely holdings. It is reported that Geely maijie is a subordinate enterprise of Geely technology group. Geely Technology Group is a large-scale industrial group guided by scientific and technological innovation and driven by investment and operation. It is also an industrial investor and operator in the cross-border science and technology ecological field. In addition, Chongqing Liangjiang Equity Investment Fund Management Co., Ltd. is the other main body forming the consortium with Geely, and the major shareholder of Liangjiang fund is Chongqing Liangjiang New Area Industrial Development Group Co., Ltd., which is subordinate to the Management Committee of Chongqing Liangjiang New Area. In other words, Lifan’s restructuring has also attracted the Chongqing government. Recently, Lifan shares also announced its progress announcement on the recruitment and restructuring of investors. Among them, on September 14, 2020, Chongqing Liangjiang Equity Investment Fund Management Co., Ltd. (hereinafter referred to as “Liangjiang fund”) and Geely maijie Investment Co., Ltd. (hereinafter referred to as “maijie investment”) as a consortium, submitted registration materials to the manager for restructuring investors in accordance with the provisions of the recruitment announcement. According to the registration materials, the manager conducted a strict examination; within the time limit specified by the manager, Liangjiang fund and maijie investment paid the deposit and signed the confidentiality agreement. After confirmation by the manager, the registration of Liangjiang fund and maijie investment is valid, and they are now participating in the reorganization of the company as the investors of intention to restructure. < / P > < p > after the investors of the intended reorganization are determined, the manager will speed up the negotiation and communication with the investors, creditors and other stakeholders in combination with the progress of the reorganization work. If the manager and the investors who intend to restructure fail to reach an agreement on the matters related to the restructuring investment and other reasons, the manager will determine the promotion work of the subsequent reorganization investor recruitment according to the implementation of this recruitment. In the first half of the year, the net loss was 2.6 billion yuan, and the sales volume of automobiles was only 1527 vehicles < / P > < p > on August 28, * ST Lifan released its semi annual report. The data showed that the company realized 1.584 billion yuan of operating revenue in the first half of the year, a year-on-year decrease of 69.42%; the net loss was 2.595 billion yuan, with a loss of 947 million yuan in the same period of the previous year, with a year-on-year increase of 173.99%; the basic earnings per share was – 1.99 yuan, and the basic earnings per share in the same period of the. Car buying China has novel coronavirus pneumonia since 2018.

has said that since 2018, China’s automobile industry has suffered negative growth for the first time. In 2019, it continued to decline. In early 2020, due to the impact of the new crown pneumonia, the shutdown time was long, the whole economic growth was quite large, the income of residents decreased, and the willingness to buy cars decreased, which had a considerable impact on the overall business. In 2019, the state announced the automobile exhaust emission policy and implemented the national six standards in advance. The lack of product preparation of our company leads to no supply market of national six models in the first half of 2020, resulting in the decline of sales. In terms of export, in the first half of 2020, affected by the global epidemic situation, the external environment of international trade was grim, and the export business of the company’s automobile products was basically in a semi stagnant state in the first half of 2020. < p > < p > on the same day, * ST Lifan also announced that from January to June 2020, the company will withdraw about 381 million yuan of asset impairment reserves, and the loss of disposal of fixed assets will be about 1.085 billion yuan, and the subsequent company may face large asset impairment. In terms of sales volume, * ST Lifan sold 978 traditional passenger cars, a year-on-year decrease of 95.29%, and 549 new energy vehicles, a year-on-year decrease of 56.32%. Only 1527 cars were sold. < p > < p > according to the latest released production and sales express data of August, 15 traditional passenger cars were sold in August, with a sharp decrease of more than 90% compared with the same period of last year; 49 new energy vehicles were sold, with a sharp decrease of 79% year-on-year. However, the production and sales of motorcycles were slightly better. In August, 600511 motorcycles were produced, with a year-on-year increase of 21.37%; and 54626 motorcycles were sold, with a year-on-year decrease of 1.37%. Due to the continuous problems in recent years, its share price has dropped by nearly 80%. At present, the stock price of * ST Lifan is RMB 6.02, and the latest total market value is RMB 7.909 billion. On August 28, Lifan Co., Ltd., in reply to the inquiry letter on the annual report of Shanghai Stock Exchange, said that in terms of production and operation, the company had a large number of litigation cases and the risk of large assets being frozen. At present, the company has involved 1178 lawsuits (Arbitration), involving 5.037 billion yuan. The litigation will have a significant impact on the subsequent production and operation of the company. As of December 31, 2019, the company has restricted assets of 8.628 billion yuan. < / P > < p > the company has a high debt ratio. As of December 31, 2019, the company’s total assets was 19.407 billion yuan, total liabilities was 16.573 billion yuan, and the asset liability ratio was 85.4%; the company had large liabilities, including long-term liabilities of 1.681 billion yuan and short-term liabilities of 14.892 billion yuan. The debt structure was unreasonable and there were a large number of debts due within one year. Lifan shares said that the company, the company’s controlling shareholders and their related parties have the risk of significant adverse impact on production, operation and financial credit due to overdue debts, and may face large asset impairment in the future. At present, the company’s debt burden is heavy, and the production and operation of automobile plate is in an abnormal state. Remind investors to pay close attention to it. < / P > < p > Disclaimer: the purpose of this article reprinted by china.com finance and economics is to convey more information and does not represent the views and positions of the website. The content of this paper is for reference only and does not constitute investment advice. Investors operate accordingly and bear their own risks. < p > < p > Chinanet is a national key news website under the leadership of the Information Office of the State Council and managed by China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website releases information 24 hours a day, which is an important window for China to carry out international communication and information exchange.