A number of listed auto dealers have recently released their 2014 annual reports or performance forecasts, and some of the listed dealers' profits in 2014 have seen a significant decline or even a loss. Among them, the Liantuo Group, which was listed in 2010, has experienced a problem of capital chain breakage. However, it is worth noting that the giants such as the huge group and Zhengtong Group, which are also listed, are brewing transformation. The industry believes that for a rapidly expanding dealer group, even if it is listed, it does not mean that its desire for capital can be 100% satisfied. The listed dealer group should not unilaterally pursue the number of stores and the occupancy rate. It should extend the business around the automobile industry chain and enhance its ability to resist risks.
The listed dealers are saddened by the slowdown in the growth of the domestic auto market, and the dealers in the first line of the market feel the most obvious. What is more serious is that the auto dealer group that has already listed has not escaped the fate of falling performance or even losing money. Judging from the current 2014 annual report or performance forecast, many listed dealer groups have experienced large losses last year, and these dealer groups are still relatively strong in the circulation field.
The performance report released by Yaxia Automobile showed that although the total operating income during the reporting period was 5.24 billion yuan, an increase of 3.86% compared with the same period of the previous year, its operating profit was -830.06 million yuan, down 288.10% over the same period of the previous year; The total profit was -48.274 million yuan, a decrease of 164.27% over the same period of the previous year. The net profit attributable to shareholders of listed companies was -55.853 million yuan, a decrease of 220.18% over the same period of the previous year. Yaxia Motor believes that the main reason is the fierce competition in the automobile sales market during the reporting period, the decline in gross profit margin and the amortization of the cost of newly built subsidiaries.
At the same time, Shenhua Holdings also announced the 2014 annual results pre-loss announcement. It is expected that its 2014 annual operating results will suffer losses, and the net profit attributable to shareholders of listed companies will be around -1.98 billion yuan, down 214.77% year-on-year. Shenhua Holdings believes that the main reason for the loss is the decline in the company's car sales, and the investment income has dropped significantly.
Although the huge group has not announced its annual results for 2014, its annual report for the first half of 2014 showed that the company achieved a net profit of 437.644 million yuan in the first half of the year, down 84.4% year-on-year, and earnings per share was only 0.02 yuan. According to the huge group, due to the slowdown in sales growth, increased competition, and pressure from automobile manufacturers, the overall profitability of the industry declined. In addition, the company's operating outlets decreased by 103 from the end of the previous year. The profit fell.
In addition, the company has become the most exposed company among the listed dealer groups. The dealer group listed on the New York Stock Exchange at the end of 2010 encountered operational difficulties due to problems with funds. It is worth mentioning that since the listing, the performance of Liantuo Group has been unsatisfactory. In December 2010, after a series of pre-IPO restructuring, the original Liantuo Group's operating companies (mainly 4S stores) were reorganized in the form of VIE to form Liantuo International, which was listed on the New York Stock Exchange and became China. The first auto sales service company listed on the New York Stock Exchange. The IPO price is $8 per ADS and a total of 6.5 million ADSs are issued. Each ADS is two common shares with a total financing of more than $52 million. The company's total market capitalization at the time of the IPO is approximately $250 million. However, after the company's listing, the stock price was flat. The price of each ADS did not exceed 10 US dollars, and the total market value has been below 300 million US dollars. As of March 19, 2015, the stock closed at $0.41, and the total market value shrank to about $15 million.
The 2014 CA DA Auto Dealer Satisfaction Survey Results released by the China Automobile Dealers Association also proved that dealers are not doing well. According to the report, in 2014, the dealers' operating pressures generally increased, and the dealers' losses were increased compared with 2013. The dealers only satisfied 20% of the profitability. The most noteworthy thing is that in 2014, dealers profited from the top seven percent in 2010 to only 30%. In contrast, it is more intuitive that some of the listed dealers' profits in 2014 have seen a significant decline or even a loss.
In the cycle of financing expansion, although the days after listing are not good, the Chinese car dealer group has been moving frequently in the capital market in recent years. Recently, it is reported that the domestic auto dealer leader Guanghui Auto intends to list the shell of Meiluo Pharmaceutical. In fact, as early as 2010, the Chinese auto dealer group began to operate in the capital market. Among them, on December 10, 2010, Beijing Liantuo Automobile Group announced its official listing on the New York Stock Exchange. On the same day, Zhengtong Automobile officially landed on the Hong Kong Stock Exchange, and Zhongsheng Automobile was listed on the Hong Kong Stock Exchange on March 26, 2010. In addition, the once large group of the largest domestic auto dealers was listed on the Shanghai Stock Exchange on April 28, 2011. Previously, there were already products listed by Yuantong, Zhongjin Automobile and Trade, as well as Dachanghang and Yaolai Group in Hong Kong.
Luo Lei, deputy secretary-general of the China Automobile Dealers Association, said that the purpose of the listing financing of the dealer group is mainly to obtain the funds needed to expand the scale. Investors are currently determining the strength and investment value of a car dealership based on the size and number of 4S stores and brands.
“Financing is naturally the primary purpose of the dealer group to seek listing. To expand the scale to get money and expand the scope of business requires money. To win more voices in the relationship of manufacturers, it needs strong financial strength to support it,” said Su Hui, an expert in the automotive industry.
The subsequent development of the listing of the dealer group is undoubtedly huge. Take Zhongsheng Group, the first listed company in the dealership, as an example. Before the IPO, Zhongsheng Group had more than 40 stores, which had doubled in size for one year. It can be said that the listing will enable the dealer group to enter a rapid development track.
However, listings also have troubles in listing, and those dealers that have already listed do not seem to be so happy. Beijing Business Daily reporter analyzed the performance of several listed dealer groups. Although the listed dealers group has indeed obtained a lot of funds, regardless of size, strength and influence, they are not in the same language as before the listing, but from the performance. According to the report, many of them have fallen into the strange circle of declining performance after the listing. In addition to the performance of the financial statements after the listing of a small number of dealer groups, most of the other shows that performance, profits fell, while still lacking money.
“Listing financing, expansion, increasing the right to speak in the relationship between manufacturers, increasing the attention of the capital market. Then then getting more money and expanding... The dealer group seems to have fallen into the listing financing – expansion – refinancing – re-expansion, The more the financing, the more regrettable the lack of money." Su Hui analysis.
Taking Yongda Automobile as an example, it said in the prospectus that about 50% of the funds raised in this listing will be used to fund the capital expenditure required to open a new outlet.
"The domestic capital auto dealer group's capital chain tension has an important relationship with its business model." Jia Xinguang, an auto analyst, pointed out that it is somewhat similar to the former Suning Appliance. Now it still relies on extensional expansion, that is, constantly opening new stores to expand revenue and profit. Although the extension of the growth can enable the dealers to achieve rapid growth in scale, it requires a large amount of funds, which leads to the tension of the listed dealer group.
"China's auto dealer group is not much innovative in terms of business. Because it is controlled by manufacturers, it is more clusters of 4S stores. The difference between big companies and small companies is more than 4S stores. "The dealers can play a lot of space in model innovation, which has caused the dealer group to become bigger and more difficult. It can only rely on continuous additional investment to achieve expansion, and capital shortage is inevitable." Su Hui said.
Forced to seek transformation From the current situation of domestic listed dealers, although in the backward market, including used cars, after-sales service and other areas, but so far, its main source of profit is still new car sales. From the perspective of negotiating ability, the pattern of new car sales is strong for vehicle manufacturers and relatively weak for dealers. Fortunately, since last year, most of the dealer groups have slowed down the pace of expansion, and realized that there is a problem in the simple pursuit of large, but should also develop steadily.
Pang Qinghua, chairman of the huge group, recently revealed that the huge group plans to increase competitiveness through a number of businesses in the next three years, including parallel import auto business and auto electronics mall business based on physical dealerships. In addition, the huge group plans to reduce the company's fixed assets from 20 billion yuan to 10 billion yuan, and said in the announcement that "reducing the scale of fixed assets is one of the contents of the company's management plan for the next three years, which will have Help the company to return cash and increase revenue, thereby enhancing the company's overall profitability."
In addition to the huge group, Zhengtong Auto also announced that Shanghai Dongzheng Automobile Finance Co., Ltd. was jointly established by Zhengtong Auto and Dongfeng Motor. The financial company will become the first auto finance company opened by dealer group in China.
Compared with the expansion of the business model, the transformation of Harmony Auto, another listed dealer group, is more thorough. On March 23, Foxconn, Tencent and Harmony Auto signed a strategic cooperation framework agreement on “Internet + Intelligent Electric Vehicles”, and the three parties will launch innovative cooperation in the field of “Internet + Intelligent Electric Vehicles”. In addition, it is reported that Yaxia Automobile will also pay more attention to the improvement of after-sales business, auto finance service and driving training business in the future, with a view to continuously improving business performance.
According to the Beijing Business Daily reporter, another distributor, Guanghui Auto, plans to take the shell of Meiluo Pharmaceutical Co., Ltd. recently. In order to withstand the risk of declining industry growth, Guanghui Auto actively deployed the aftermarket and derivative business, and vigorously developed the used car business. , and Ali's comprehensive cooperation in second-hand car auction and certification, car sales and service O2O, big data analysis and customer value mining, financial services.
The industry generally believes that the car dealer group is not very attractive in concept, and does not have the potential to be favored by the capital market. Although it has certain advantages as a long-term investment, it ultimately depends on the company's own management and management capabilities, and these are not problems that can be solved through listing.
Jia Xinguang also said that the high debt ratio has become a common problem for dealer groups, and it is also related to the maturity of the Chinese auto market. At present, the profit cycle has been lengthened, and the cost has been recovered in the past two or three years. It now takes about ten years. Therefore, the primary issue facing the dealer group is how to transform and transform the business model.
Statistics show that in developed countries, automobile sales account for 20% of total profits, parts supply profits account for 20%, and other 60% of profits come from service areas. At present, most of China's auto dealers still rely on new car sales. Although there have been changes in the past two years, the proportion of after-sales service profits is far from the level of developed countries. Su Hui believes that after the listing of the dealers, it should not unilaterally pursue the number of stores and the market share. On the basis of the existing 4S stores, the business should be extended around the automobile industry chain to improve the core competitiveness.

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