Anhui Jianghuai Automobile Group Co., Ltd. (Jianghuai Automobile) recently released its 2024 performance forecast, showing a loss of 2.74 billion yuan (RMB) after deducting non-recurring gains and losses (deducted net profit). Despite this, the company’s stock price rose by 196.55% in 2024.
In the “2024 Annual Performance Forecast” issued by Jianghuai Automobile, it is stated that the estimated net profit for 2024 is approximately -1.77 billion, with a deducted net profit of -2.74 billion. Compared to the previous year’s attributable net profit of 150 million and deducted net profit of -1.718 billion, Jianghuai Automobile’s net profit in 2024 directly shifted from profit to loss, with a significant increase in the extent of deducted net profit losses.
Explaining the reasons for the losses, Jianghuai Automobile stated, “The company’s joint venture, Volkswagen Anhui, experienced operating losses, leading to a recognized investment income loss of approximately 1.35 billion from Volkswagen Anhui, as well as impairment of certain assets with a provision of about 1.1 billion.”
According to data, Volkswagen Anhui is a joint venture of Volkswagen and Jianghuai, and its operating performance in 2024 was poor.
An analysis article by “Finance Talk” on February 11 pointed out that even without the drag from Volkswagen Anhui, Jianghuai Automobile’s own operating conditions were also less than satisfactory. Looking at sales data, Jianghuai Automobile sold a total of 403,100 vehicles in 2024, a decrease of 7.42% year-on-year, with a significant decline in its core passenger car business.
Jianghuai Automobile’s passenger car business is divided into SUVs, MPVs, and sedans. In 2024, sales of these three types of vehicles decreased by 19.22%, 19.98%, and 12.02% respectively compared to the previous year, with the decline in passenger cars being significantly higher than the overall decline in vehicle sales.
The article also highlighted the worsening debt situation of Jianghuai Automobile. The company’s financial report shows that as of the end of the third quarter of last year, Jianghuai Automobile’s debt-to-asset ratio was 70.42%, with total liabilities of 35.42 billion, current liabilities of 284.9 billion, including just one item of accounts payable and bills payable reaching 199.6 billion, and non-current liabilities due within one year of 2.476 billion. Meanwhile, Jianghuai Automobile had a cash balance of 132.6 billion and trading financial assets of 38.06 billion, totaling less than 200 billion, which is not enough to cover accounts payable and bills payable.
Furthermore, the article mentioned a curious phenomenon that despite Jianghuai Automobile’s poor performance, its stock price surged by 196.55% in the past year. Among the 25 stocks in the Dongfang Wealth Automotive OEM sector, Jianghuai Automobile’s stock price increase in the past year ranked first, exceeding the second-place Yutong Bus by nearly 80%.