At the end of the first quarter, the annual reports of major listed companies have come out. In 2011, what were the operating conditions of listed commercial vehicle companies, whether there was sufficient cash, and how was the inventory? In contrast, maybe it will be clear. Please see the analysis of cash flow of listed companies by the First Commercial Vehicle Network.
Difficult environment for commercial vehicles to slide
With regard to the difficult situation of the truck market in 2011 and 2012, the reporter has no need to say anything. Recently, various commercial vehicle listed companies have released their financial reports for the year 2011. In these annual reports, truck-listed companies have almost the same theme: "decrease." Moreover, this theme is likely to continue to accompany the entire year of 2012.
In a situation where the environment is worrisome, the key factor affecting the development of car companies is not net profit, but more about the adequacy of cash flow. This is because the net profit and operating income determine the development of the company, while the cash flow determines the survival of the company. If the cash flow breaks or there is a shortage, it may lead to a large number of corporate personnel loss, production stagnation, and even bankruptcy.
Cards and buses have different cash margins
In the recently published financial reports of several listed companies, the cash flow and even net profit data of trucks and passenger cars are quite different.
In 2011, the passenger car industry ushered in a period of rapid development. The whole industry grew by 11% year-on-year, which is in stark contrast to the decline of 6% in the entire commercial vehicle industry. Table 1 shows that the net profit disclosed by the passenger car sales champion Yutong Bus in the 2011 annual report was 1.181 billion yuan, an increase of 36% year-on-year; the balance of cash and cash equivalents at the end of the period was 1.091 billion yuan, an increase of 65.55% over the same period of last year. The net cash flow amounted to 1.446 billion, up 35.52% year-on-year. This achievement, even in the entire commercial vehicle industry, is regarded as one of the companies with very good cash flow.
The listed companies that use trucks as their main business have a relatively dim operating performance reflected in their cash flow.
Among the several vehicle companies that have been announced, such as Foton Motors, Jiangling Motors, Jianghuai Auto, Dongfeng Motor, Hualing Xingma, and China National Heavy Duty Truck, net cash flows have almost all declined significantly, especially cash generated from operating activities. The net amount of traffic was even more severe, reflecting the trend of the listed companies' overall decline in the truck market in 2011. Even though the heavy-duty truck engine was "powerful" Weichai Power, the net operating cash flow in 2011 (5.953 billion yuan) also decreased by 3.452 billion yuan over the previous year, a decrease of 36.71% year-on-year; her balance of cash and cash equivalents at the end of the period was The increase was 46.29% year-on-year, but the old capital accumulated in previous years was a year-on-year increase. The net increase in cash and cash equivalents for the year 2011 was a decrease of 1,019 million yuan year-on-year.
The cash flow of truck listed companies is worrying
Table 1 shows that Foton Motor's revenue last year was 51.646 billion yuan, down 3.45% year-on-year, while the net operating cash flow was -525 million yuan, a year-on-year drop of 148.8%; the balance of cash and cash equivalents at the end of the period was 3.990 billion yuan. The year-on-year decrease was 24.16%; accounts receivable reached 1.365 billion yuan, an increase of 39% year-on-year. The company currently ranks the top two in the domestic commercial vehicle industry, and its 2011 young card, light passengers, Dazhong passengers and passenger vehicle business segments all experienced declines in different ranges, together with accounts receivable increased by 39% year-on-year. The company's performance has a great influence.
China National Heavy Duty Truck (Hong Kong) Co., Ltd., which manufactures heavy trucks, is also not optimistic. In 2011, her revenue was 36.604 billion yuan, a year-on-year decrease of 7.7%; although the net cash flow from operations rose 77.65% year-on-year, it was still negative (-1.426 billion yuan), and the receivables increased rather than decreased (4,604 million). Yuan, an increase of 53.67% year-on-year, reflects, to a certain extent, the problem of difficulty in making payments under the heavy truck market.
The third company with a negative net operating cash flow is Dongfeng Motor Co., Ltd., which was mainly engaged in developing and manufacturing light commercial vehicles. In 2011, it achieved a net profit of 464 million yuan, but the net operating cash flow at the end of the year was -RMB 617 million, a year-on-year drop of 271.39%. Dongfeng Automobile admits that the main reasons for the large discrepancy in net profit and cash flow include two aspects. First, competition in the auto industry intensified in 2011, the monetary market currency tightened, dealers’ funds were slowed down, and the cash ratio decreased; at the same time, In line with procurement and cost reduction, the company provides financial support to suppliers, which mainly includes shortening the payment cycle and increasing the cash payment ratio.
Jianghuai Automobile, which ranks in the top five in the annual sales volume of commercial vehicle industry, had a revenue of 304.71 billion yuan in 2011, a slight increase of 2.58% year-on-year, making it relatively rare. However, the balance of cash and cash equivalents of the company at the end of last year was RMB 3,184 million, a year-on-year decrease of 15.81%; the net operating cash flow was RMB -728 million, a significant decrease of 146.67% year-on-year. Jianghuai said that the net cash flow from operating activities decreased by RMB 2.288 billion compared with the previous year, which was mainly due to the cashing of bank acceptance bills in the previous year. In spite of this, due to the drag on the car business and the negative effect of the commercial vehicle market, it is still a long time before the Jianghuai Auto Group's performance has returned.
Hualing Xingma Co., Ltd. has just completed the reorganization of the Hualing Heavy Trucks and Xingma Special Vehicles business. The total revenue for 2011 was 6.854 billion yuan, a year-on-year decrease of 15.33%, and the net amount of operating cash flow decreased by 65.96% year-on-year (RMB 273 million). The balance of cash and cash equivalents at the end of the period was RMB 723 million, a decrease of 42.8% year-on-year. The reason for the sharp decline in its net cash flow is similar to that of Sinotruk, which was affected by the overall decline of 13.44% in the heavy truck market in 2011.
Even Jiangling Motors, which has always had good operating results, faced certain challenges in 2011. The company’s revenue last year was 17.457 billion yuan, a year-on-year increase of 10.71%, but the net operating cash flow was 1.148 billion yuan, down 57.76% year-on-year; accounts receivable were 309 million yuan, an increase of 86.14% over the same period last year. Jiangling Motors stated that in 2011, the company continued to face difficulties such as increased competition, more stringent regulatory requirements, rising cost pressures, and slower growth of light commercial vehicles.
Reduce inventory cash is king
In an environment where the market is sluggish, reducing inventory and risk and increasing financing channels are important countermeasures that various companies have reflected in the annual report. The guiding ideology of this is undoubtedly "cash is king". This point is totally different from the situation in which most companies fully expanded and vigorously picked up goods at the end of 2010.
As shown in Schedule 1, the majority of truck-listed companies’ inventory stocks at the end of 2011 have declined at different rates, reflecting the strategy of reducing inventory, reducing financial pressure and increasing cash flow. At the end of 2011, Foton Motors' inventories amounted to RMB5.879 billion, a year-on-year decrease of 11.61%; China Sinotruk (Hong Kong) Company's inventory amounted to RMB101.93 billion, a year-on-year decrease of 23.84%; JAC Auto's inventory amounted to RMB1.444 billion, a year-on-year decrease of 27.84%; Xingma's stock amounted to RMB1.721 billion, a year-on-year decrease of 23.31%; Dongfeng Automobile's inventory amounted to RMB 2.563 billion, a year-on-year decrease of 5.94%; Jiangling Motors' inventory amounted to RMB 1.14 billion, a year-on-year decrease of 20.61%. China National Heavy Duty Truck Jinan Truck Co., Ltd. saw the largest decline in inventory, which was a decrease of 35.89% year-on-year, which is directly related to the company's large reserve volume at the beginning of last year.
In 2012, the macroeconomic slowdown will continue, and the sluggish state of the national economy will continue for a longer period of time. The commercial vehicle market faces enormous challenges and risks. In this turbulent environment, how should various listed companies respond?
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