Jinyu Car City (000803):3450 Million Bank Loans Overdue Transformation Difficult Capital Dilemma

34 million 500 thousand yuan bank loan overdue, opened Jinyu city capital pressure iceberg.

In July 8th, Jinyu car city announced that some of the bank loans were overdue recently due to tight liquidity. The overdue principal amount totals 34 million 500 thousand yuan, accounting for 39.93% of the company's latest audited net assets.

Changjiang Commercial Daily reporter noted that since its listing in 1998, Jinyu car city has changed hands several times, and its main business has also been changed several times. However, business performance has been sluggish. Even after fully promoting the transformation of business in 2018, the performance improvement is still uncertain and the financial pressure is aggravating.

Data show that in 2018, the company achieved operating income of 491 million yuan, an increase of 64.20% over the same period, and net profit of 8 million 140 thousand yuan, down 51.67% compared with the same period last year. The net loss of non net profit was 197 million yuan, down 36811.69% from the same period last year. In addition, as at the end of last year, Jinyu city had borrowed 301 million yuan in short term, and only 108 million yuan in the currency fund, and its asset liability ratio was as high as 86.89%.

For this overdue bank loan, Jin Yu Cheng said that the debt overdue matters would lead to a decline in the company's financing ability and aggravate the company's tight financial condition, which may have adverse effects on the company's management and credit status.

34 million 500 thousand bank loans overdue

In July 8th, Jinyu car city announced that the Noah's Ark of the company and its subsidiaries had recently been overdue due to tight liquidity.

Among them, the company's overdue principal of Leshan bank was 10 million yuan, and Noah's Ark's overdue principal to Hengfeng bank was 24 million 500 thousand yuan. The notice shows that the interest rate for the overdue loans as at the end of the maturity date has been paid up, and the overdue principal amount is 34 million 500 thousand yuan, accounting for 39.93% of the latest audited net assets of the company in June 21, 2019.

Kim Yu Che Cheng frankly said that the company and its subsidiaries may be faced with the need to pay related liquidated damages, late fees and penalties and other circumstances, resulting in an increase in the company's financial costs. Debt overdue matters will lead to a decline in corporate financing capacity, exacerbating the company's financial constraints, may have adverse effects on the company's management and credit conditions.

In addition, Jinyu car city said that because the company provided guarantee for Noah's Ark in the 24 million 500 thousand yuan overdue loan of Hengfeng bank, the overdue loan of the company in Leshan bank also had the asset mortgage guarantee, and the overdue existence led to the coercive execution risk of the company's collateral.

In fact, before this, Jinyu car city has issued a notice that it received the "Notice of collection" of the bank. In the notice of collection, Hengfeng bank said that the credit amount of the $25 million loan contract signed by Noah's Ark and the bank will be expired on 06 2019, and the letter will be guaranteed by Jinyu car city. In view of the loan, Noah's Ark has no repayment capacity and will be paid back by the listed company after the expiry date.

The bank loan overdue revealed the financial pressure of Jinyu car city. Data show that as of the end of 2018, Jinyu car city short-term borrowing 301 million yuan, accounting for only 108 million yuan of currency funds, asset liability ratio as high as 86.89%. At the end of the first quarter of this year, Jinyu city had a short-term loan of 151 million yuan, 17 million 737 thousand and 400 yuan in currency and 86.24% in assets and liabilities.

In reply to the annual enquiry letter issued by the Shenzhen Stock Exchange, Kim Yu Che Cheng admitted that both the company's business transformation and future development plan need financial support. The current asset liability ratio has led to a weak ability to resist risks.

Transformation is difficult to see performance change

Jinyu car city, formerly known as Maya shares, was listed in 1998. In July 2002, the announcement of Mei Ya shares indicated that the first largest shareholder of Southeast Asian capital transferred 30 million 26 thousand shares to Jinyu holdings, the total value of transfer was 46 million 180 thousand yuan, and Jinyu holdings became the largest shareholder of the company after the transfer. In June 2004, Mei Ya was renamed as Jinyu car city.

As a result, the main business of Jinyu car city expanded from single silk production and sales to silk trade, automobile sales, real estate development and operation. In 2017, by acquiring 55% stake in Chi Lin Electric, the main business of the company changed to new energy electrical equipment manufacturing, sales, silk trade, real estate development, automobile sales.

But it is worth mentioning that since Jinyu holdings controls Jinyu car city, the company has lost more and less profits, and accumulated net profit from 2010 to 2018 was -6821 million yuan. In addition, from 2014 to 2018, except for 2017, the net profit of Jinyu city was negative, and the net profit of 5 years was 284 million yuan.

In addition, since 2017, Jinyu car city has continued to fight for control. First of all, in May 2017, the North controlled clean up the two tier market, holding 19 million 159 thousand and 700 shares of Jinyu Che Cheng, accounting for 15% of the total share capital of the company. Controlling shareholder Kim Yu Holdings Limited. Subsequently, in November 2017, the North controlled cleanup group and Nanchong state capital formed a concerted action, together holding 29.86% of Jinyu car city, becoming the largest shareholder of listed companies.

At the same time, after barely protecting the shell in 2017, Jinyu car city formulated the transformation plan in early 2018, and gradually withdrew from the original silk, real estate development, property management, automobile sales and other businesses, and took the investment, service and operation and maintenance of new energy equipment as the main direction of transformation.

What worries us is that Chi Lin Electric purchased by Jinyu car city only achieved net profit of 369 thousand and 600 yuan in 2018, far below its commitment of 90 million yuan, and it is expected that the company will not be able to fulfill its performance promise in 2019.

In the first quarter of this year, Jin Yu Che Cheng achieved a revenue of 4 million 640 thousand yuan, down 92.27% compared to the same period last year. Its net profit was -1700 yuan, and its loss margin narrowed compared with the same period last year, but it was in a state of deficit.

However, the Yangtze daily news reporter noted that since this year, Jinyu car city has intensified its transformation efforts to sell its real estate subsidiary, Jinyu real estate, which has supported its performance. Jinyu car city proposed that in order to focus on the new main business, the company intends to sell 100% stake in Jinyu real estate. However, the motion was rejected because the independent director was doubtful about the basic facts of the company's sale of subsidiary stock matters.

At the same time, in 2018, when the fund-raising of 560 million yuan was left unfruitfully, in May this year, Jinyu car city again threw out a new fixed increase plan, the plan to solar cell field layout. However, the motion also failed to vote through the shareholders' meeting. Directors Hu Ming and Hu Zhiqi believe that listed companies may not be able to return funds in a timely manner through projects. Instead, they will get bogged down in financial difficulties and have a negative impact on the company's financial position.