Economic Observation Network reporter Zhou Ju On March 22, Evergrande Health issued a profit warning announcement, The net loss of Evergrande’s new energy vehicle business in 2019 was disclosed as RMB 3.2 billion, plus a loss of RMB 1.7 billion in 2018, a total loss of nearly RMB 5 billion over two years. This means that two years after the car was built, Evergrande New Energy is still far from making money.
Hengda Health said that the loss of the new energy vehicle business is mainly because it is still in the investment stage, so the purchase of fixed assets and equipment, as well as related research and development related expenses and interest expenses have increased. Data show that Evergrande New Energy’s first product,”Hengchi 1″, will be available in 2021. Industry insiders predict that Evergrande New Energy may continue to lose money in 2020.
From a horizontal perspective, Evergrande New Energy’s annual loss is not the highest in the industry. Data show that Weilai Automobile, which is also a new car manufacturer, has accumulated a total loss of 22 billion yuan in the past four years, with an average of more than 5 billion yuan per year. In addition, Evergrande New Energy has the financial backing Evergrande Group as its backer,”not bad money” is its biggest label.
However, Evergrande Group’s net profit has been cut in 2019, which brings uncertainty to the new energy business that requires continuous capital injection. On March 22, China Evergrande Group issued a profit warning announcement that according to the information currently available to management, it is expected that the group will record a decrease in core business net profit and net profit throughout the year, of which the net profit decline is as high as 50%.
It is worth noting that, at the same time as Evergrande Health and China Evergrande announced negative performance news, Evergrande Group is conducting an unprecedented large employee mobilization, which is distributed in 30 different departments. % Of employees suddenly received a transfer order to Evergrande’s newly established company, Evergrande, but the company did not talk about the specific business and related arrangements of the new company. It is reported that the adjustment may involve about 180 employees of Evergrande New Energy Vehicles.
The profit of the parent company is declining
After experiencing unpleasant cooperation with FF, Evergrande New Energy Automobile Co., Ltd. was officially established in early 2019, and then Hengda Da has made intensive large-scale acquisitions of new energy vehicles.
According to statistics, Evergrande’s investment in new energy vehicle business has exceeded 300 billion yuan, and it has successively included the controlling rights of companies such as NEVS, Kanai New Energy, and Tate Mechanical and Electrical. In addition, Evergrande last year invested heavily in openly recruiting 8,000 world-class top experts and technical elites in the new energy vehicle industry from the world, and the direct and brutal Hengchi car advertisements have once again added to the grandeur of Evergrande New Energy.
Through intensive capital investment, the rapid integration of new energy vehicle business is in place. This is the path that Evergrande has made to the outside world. At the end of last year, Xu Jiayin, chairman of the board of directors of China Evergrande, clearly summarized Evergrande’s new car manufacturing strategy as”” buy, buy, buy together, go round, big, big, good”” and said that he would”put The core technology that can be bought is bought by the companies that can buy it.”
Hengda Health said one year ago that Evergrande plans to build a production capacity of 500,000 to 1 million new energy vehicles by 2022, gradually achieve mass production, and strive to become the world’s largest new energy vehicle group. . To achieve this goal, Evergrande’s three-year investment budget in the field of new energy vehicles is 45 billion, of which 20 billion in 2019, 15 billion in 2020, and 10 billion in 2021.
However, whether this next 25 billion investment plan can be put in place, the current variables are increasing. On March 22, the profit warning issued by China Evergrande showed that the company expects net profit in 2019 to be about 33.5 billion yuan, a decrease of about 50% year-on-year. The announcement said that the decline in profit was mainly due to the lower-priced Qingwei sales building being carried over in 2019, which led to a drop in the unit price of delivery.
The data shows that Evergrande’s real estate sales business has begun to show a downward trend from the first half of 2019. At the same time, the company’s asset-liability ratio is high. Data show that in the first half of 2019, China Evergrande’s operating income and net profit fell by 24.4% and 49%, respectively, while the asset-liability ratio was 83.5%. Entering 2020, Evergrande’s real estate business is expected to continue to be affected by the epidemic.
In the face of blocked offline business and high costs, Evergrande Group seems to intend to increase its online sales layout. Information shows that Evergrande has recently set up a new company, Evergrande, and transferred 30% of its employees to the new company. According to data from Qixinbao, Evergrande Group Co., Ltd. was established on February 28, 2020, with a registered capital of 3 billion yuan. It is 100% owned by Shenzhen Yingmao Investment Co., Ltd., and its business scope is real estate sales, automobiles, and electric vehicles. , Sales of new energy vehicles, etc.
New energy employees are transferred to” Hengdabao”
It is worth noting that after being transferred to”Hengdabao” Among the employees, in addition to the engineering department, design department and other departments, some employees of Evergrande New Energy Vehicles, which are already in the early stage of mass production, have also been transferred out.”The people of (Hengda New Energy) have also been transferred, and there are 180 people on the list.” On a social platform, a person claiming to be an employee of Evergrande New Energy said that he had been notified and transferred to”Hengda Great treasure.”
In this regard, insiders of Evergrande New Energy confirmed to the reporter of Economic Observation Network that it is true that some employees were transferred to”Hengdabao”, but for the specific business of”Hengdabao” and the transferred personnel, According to the work arrangement, the person stated that”because the new company has just been established, there is no exact news, and further confirmation is needed.”
According to insiders,”Hengdabao” may become Evergrande’s real estate, cars , And even luxury goods online sales channels to reduce sales costs. During the epidemic, Evergrande has launched an”online house viewing” service and has given a 25% discount.
Hengda New Energy insiders believe that employees are transferred to”Hengdabao” as the main business of real estate sales, because”collaboration” in Evergrande is considered very common, even in cars and real estate. Hardly related fields.”Everything in Evergrande is an internal adjustment. There is no one to set up a new company over there. Many new energy vehicles (employees) are also transferred from real estate.” An insider of Evergrande New Energy told the Economic Observer.
It is understood that during certain special periods of Evergrande Group, even if it is not a real estate sales employee, there are indicators of house sales, and relevant leaders who are unable to achieve this will be charged.”If the transaction is concluded, it will be a considerable part-time income, but I have not sold a set.” The insiders of the aforementioned Evergrande New Energy Vehicle told the Economic Observer Network that each set of transactions can have about 30,000 yuan. Commission. The reporter found that the circle of friends of this new energy vehicle person has all been occupied by posters and copywriting of house sales.
On the other hand, some people in the industry believe that the establishment of”Hengdabao” not only promotes the online sales of houses, but also paves the way for the online sales of Evergrande’s new energy and new cars. The data shows that the full series of Hengchi cars will be fully mass-produced in 2021, but it has not yet been announced which channels will be used for sales of new cars after they are launched. It is worth noting that Evergrande Group has previously become the second largest shareholder of the dealer group Guanghui Automobile through investment. Regarding whether the two will cooperate in terms of channels, the director of Guanghui Automobile said in an investor question on March 18 that he needed to pay attention to the relevant information released later.
Based on the first product of Evergrande’s new energy vehicle to be launched in 2021, the industry believes that it will continue to lose money in 2020. However, it is worth noting that with the new energy vehicle project, Evergrande also has multiple pieces of land to account for. On August 28 last year, Xia Haijun, president of Evergrande Group, said at an analyst communication meeting that Evergrande borrowed land for car construction projects in various places to cover losses caused by investment in plant construction. In addition, China Evergrande will launch a”buy and send car” to drive real estate sales.