Heavy truck sales decline in performance of several parts companies

Affected by the slowdown in the growth rate of the auto market, many domestic auto parts and components have either taken diversified development or capitalized on the capital market and expanded their international market operations to cope with the market situation of “decrease by volume”. According to the data, 35% of Silver Wheel's revenue comes from the export market and has become a strategic supplier to Cummins, Ford and GM.

In front of the *ST Hengli, which is expected to have the highest loss, the loss amounted to 9.5 million yuan to RMB-12.50 million. For reasons of loss, *ST Hengli, who has been “wearing the hats and hats”, apparently did not want to say more. He only used the phrase “production and sales decline” as a response to the decline in performance. On the investor platform, in the face of further questions from shareholders, the company has not sounded.
The sales volume of the commercial vehicle market, especially the medium- and heavy-duty truck market, has declined, resulting in a significant increase in the performance of parts and components companies, including Dengyun Motors, whose main business is diesel engine support. The announcement shows that Dengyun’s net profit loss for the first half of the year amounts to 6 million yuan to 9 million yuan.

In fact, in 2015, Dengyun’s shares suffered a loss of 53.11 million yuan. Its auditor, Shiyong Zhonghe Certified Public Accountants, issued an auditing opinion on its 2015 financial statements. On June 30 this year, the company issued an announcement stating that the company was facing the risk of being delisted and suspending listing due to the investigation by the Securities Regulatory Commission for suspected violations of information disclosure.

“The auto parts industry has ushered in a period of pain.” Jia Xinguang said that although the development momentum of individual large-group parts and components companies is still strong, most of the auto parts and components companies’ development situation is worse than before.

It can be seen that, due to the impact of the macro economy, the growth rate of the auto market has slowed down, making the performance of auto parts companies unsatisfactory, and the transformation and upgrading cannot be delayed. Ping An Securities researcher Wang Dean believes that in the future, parts and components will move toward energy, new energy, intelligence, and networking. In the next few years, the pressure on the fuel consumption of passenger vehicles will be greatly reduced, and domestic parts and components companies that are simply involved in vehicle control will not be favored.

When the parts and components companies are transformed

Despite the continued slowdown in the growth rate of the auto industry, the overall decline in the construction machinery industry and the overcapacity in the industry, there are still some companies that make money. Judging from the parts and components companies that currently announce half-year performance forecasts, there are also many companies with outstanding performance. As of July 26, according to the pre-notice net profit statistics, Wanfeng Aowei reported the highest net profit, reaching 400 million yuan.

In this regard, Wanfeng Aowei said that through the optimization of market structure, improvement of process technology, improvement of internal management, and improvement of equipment automation, the company achieved an estimated net profit of 400 million to 500 million yuan, a year-on-year increase. 20%-50%. At the same time, the company expects the operating results of this period will still be steadily improved compared to the same period of last year.

In fact, under the pressure, many domestic auto parts companies have accelerated the pace of transformation and upgrading, or adopted diversified development, or leveraging the capital market and seeking overseas mergers and acquisitions. Among them, Guangdong Hongtu, Hongte Precision and other engine aluminum alloy precision castings companies cut market demand for light weight, performance growth faster; Fulin Precision's variable valve system sales increased by 73.47%, gross margin of 39.09%, becoming The company's important profit growth point.

The engine parts companies are also actively expanding their business in the international market and developing to the high end to cope with the market situation of “decrease in prices and prices”. According to the data, 35% of Silver Wheel's revenue comes from the export market and has become a strategic supplier to Cummins, Ford and GM. As a result, net profit rose by 10%-20% to 110 million yuan-1.3 billion yuan.

Jia Xinguang told reporters that the slow recovery of the entire automotive auto parts market may continue, but companies will open up the level, do not rule out individual companies will rise suddenly. Jia Xinguang believes that the auto parts industry may have to wait a few years before it is expected to pick up. But during this period, if companies can move in a timely manner and grasp the right time, they will be expected to take their place in the future market.

“On the one hand, China’s auto parts companies should use mergers and acquisitions and joint ventures to prevent the impact of multinational companies in order to ensure a stable market share for enterprises; on the other hand, they should seize the opportunity for deep industrial integration in recent years and achieve sustainable and healthy development through innovative technologies. It is a new energy auto parts company and a smart auto parts company that should strengthen independent research and development to improve product quality and enhance the competitiveness of enterprises, said Jia Xinguang.

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