[YesAuto News] Frequent pledges and releases of pledged shares have kept Lifan on the cusp of “funding tension”. On July 24, Lifan Industry (Group) Co., Ltd. (SH.601777, referred to as Lifan Group) issued an announcement stating that its controlling shareholder Chongqing Lifan Holdings Co., Ltd. 4.74% of the company's total share capital is pledged to Guotai Junan Securities Co., Ltd. (referred to as “Guotai Junan”) for a period of no more than 6 months. It is worth noting that in the past two years, Lifan Holdings has pledged the shares of Lifan shares more than 20 times, and the pledge has been lifted 15 times, and the total number of pledged shares has reached 90%.
According to the announcement, Lifan Holdings lifted the 62 million shares originally pledged to Guotai Junan on July 20, accounting for 4.74% of the total share capital of Lifan Holdings. Then, Lifan Holdings pledged the same amount of shares to Guotai Junan again on July 23. He also stated that “Lifan Holdings is currently in good credit standing and has the ability to perform contracts, and the resulting pledge risk is within the controllable range.” However, analysts believe that frequent pledges and releases of equity are a manifestation of Lifan’s “tight capital flow”.
In recent years, in the traditional passenger car market, the sales volume of Lifan Group has also declined significantly. The sales volume of 132,000 vehicles in 2017 was less than three years ago. Lifan Group’s annual report shows that from 2014 to 2016, Lifan Group’s asset-liability ratio exceeded 70%, and in 2017 it was as high as 75.72%. Lifan Group also mentioned in the company’s annual report: “The higher asset-liability ratio increases the company’s Financial pressure and debt servicing pressure.”
With the rapid rise of the new energy market, Lifan Group is also accelerating its deployment in the field of new energy. At a shareholder meeting in 2017, Lifan Group founder Yin Mingshan commented that Lifan’s new energy strategy “has started early, but is in a hurry. Late episodes”, and said that they will “firmly switch to new energy.”
This obviously means that more financial support is needed. However, in 2016, Lifan Group was disqualified from the 2016 central government subsidy funds due to fraudulent subsidies, and its stock price and sales were also greatly affected.
At present, Lifan’s new energy strategy also faces many difficulties: In 2016 and 2017, the sales of Lifan Group’s new energy vehicles were 5,550 and 7,738 respectively, which were far lower than the 14874 sales in 2015; in addition, its new energy vehicle sales The energy time-sharing leasing platform Panda's vehicles have been in a state of loss overall. Operation and expansion still rely on the capital injection of Lifan Group, and profitability problems follow. However, in November 2017, the cooperation between Panda and Baidu also attracted the attention of the industry. Unmanned driving + car sharing may bring new development opportunities for Panda and Lifan. (Compilation/Car House Cai Liyuan)