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JMC didn’t perform well in its previous sales record

Amid the sharp decline in sales, JMC (16,470, -0.26, -1.55%) is relying on various non-industry sales to maintain its profitability, news from Wapcar.

Jiangling Motors (000550.SZ) recently released its half-year 2022 sales records, showing that the company’s first-half operating profit is expected to reach 14.233 billion yuan, with a decrease of 19 percent, and 53% over the same period last year; net profit was 452 million yuan, which has increased 11.64% year-on-year; The loss was 108 million yuan, down 195.25% year-on-year. 

According to JMC, the increase in profits thanks to land treatment and above-ground buildings at the company’s Qingyunpu factory more than offset the decline in profits due to lower sales and raw material costs and shavings higher. 

A reporter from the Changjiang Commercial Daily found that in the first quarter of 2022, Jiangling Motors’ other revenue was 261 million yuan, the highest in a quarter since the statistics are available. The company’s first-quarter investment income loss was 12.7078 million yuan, making it the biggest one-quarter loss in years. 

It should be noted that in the first half of 2022, Jiangling Motors sold 136,000 complete units, down 23.24% year on year. Overall, in the first half of the year, Jiangling Motors only achieved 36.5% of its revenue target and 35.8% of its sales target. 

Single-season benefit income hits a record high 

Jiangling Motors’ main business is manufacturing and selling commercial vehicles, SUVs and related parts. 

Assets show that JMC’s main products include light trucks, pickup trucks, JMC brand light buses, Yusheng brand SUVs, Ford brand light buses, minivans and other vehicles. other commercial vehicles and Ford brand SUVs. The company also manufactures engines, castings and other components. 

Jiangling Motors recently released its second half operating results for 2022, showing that the company’s first half operating profit is expected to reach 14.223 billion yuan, down 19.53% year-on-year last year; net profit attributable to shareholders of the listed company was 452 million yuan, up 11.64% over the same period last year; Net profit attributable to shareholders of listed companies after sexual profit and loss were 108 million yuan, down 195.25% from the same period last year. 

In the first half of 2022, Jiangling Motors’ total profit and net profit increased by 0.08% and 11.64% year-on-year, respectively. The company said this was mainly due to increased profits from the liquidation of land and aboveground buildings at the Qingyunpu factory during the current period, which has offset sales volume. Lower margins due to lower raw material and chip costs.

On June 30, Jiangling Motors announced that the total purchase price of land and aboveground buildings  (including compensation for house decoration) was 759 million yuan. 

Jiangling Motors said the acquisition and storage of land and other related assets was a transaction made by the company to meet the requirements of the comprehensive urban construction planning of Nanchang and the proceeds from the acquisition of the company will be used to supplement the operations of the capital company. This transaction after deducting related expenses will have a positive impact on the company’s profit in 2022.

From a quarterly perspective, in the first quarter of 2022, JMC’s operating profit reached 7.232 billion yuan, down 10.06% year on year. ; net profit reached 194 million yuan, down 30.11% year-on-year; deducted non-net profit loss of 27.6565 million yuan, which changed from profit to loss every year. 

Indeed, from Q2 2021, JMC’s net profit started to decline, falling 7.68%, 52.1%, and 49.66% respectively from Q2 to Q4. 

In 2021, JMC posted an operating income of 35,211 billion yuan, up 6.42% year-on-year; net profit of 574 million yuan, up 4.26% over the same period last year; non-net profit of 29,6288 million yuan, down 92.69% over the same period. 

It should be noted that in 2021, Jiangling Motors’ other income will reach 551 million yuan, up 105.45% year on year. Of which, subsidies related to daily activities amounted to 539 million yuan, and subsidies related to research and development activities amounted to 11,7702 million yuan. If the corresponding subsidies are reduced, the company’s net profit will plummet. 

In 2021, Jiangling Motors will lose 568,700 yuan of investment income, compared with a profit of 70,178,900 yuan the previous year. 

A reporter from the Changjiang Commercial Daily found that in the first quarter of 2022, Jiangling Motors’ other revenue was  261 million yuan, the highest in a quarter since the statistics are available. The company’s first-quarter investment income loss was 12.7078 million yuan, making it the biggest one-quarter loss in years. 

New energy vehicles’ capacity utilization rate is less than 2% Jiangling Motors’ poor performance is closely related to the company’s declining sales. 

In 2020, JMC achieved vehicle sales of 331,100 units, up 14.15% over the same period last year. At that time, the company’s planned production capacity is 330,000 vehicles and the capacity utilization efficiency is 102%. In addition, the company invested 182 million yuan in the Toyama New Factory project, achieving 49% of the project’s progress.

In 2021, JMC will achieve vehicle sales of 341,000 units, up 2.99% over the same period last year. At present, the company’s design production capacity is 320,000 vehicles,  the capacity utilization rate is 106%. In addition, the company’s new Toyama factory project has an investment of 345 million yuan, and 95% of the project’s progress has been completed. 

It should be noted that in 2021, JMC will have a production capacity of 50,000 new energy passenger cars, with production and sales numbers of 190 and 186 units; Passenger cars and new energy trucks have a production capacity of 50,000 units, with production and consumption volumes of 785 units and 793 units, respectively. Taiwan; New energy trucks have a production capacity of 30,000 units, with production and consumption volumes of 1,427  and 1,178 units, respectively. 

In total, JMC has a production capacity of 130,000 new energy vehicles, with production and consumption volumes of 2,402 and 2,157 units, respectively, with a capacity utilization rate of less than 2%. 

However, all of Jiangling Motors’ new energy vehicles are produced on the same line as their respective fuel vehicles, and production capacity has not been discontinued. It should be recalled that although the construction progress at the end of the year is not 100%, on September 9, 2021, Jiangling Motors announced that the new factory in Toyama has officially entered full production. 

At the time, Qiu Tiangao, Party Secretary and Chairman of Jiangling Group and Chairman of Jiangling Motors said JMC’s Toyama Smart Factory, planned and built to world-class standards, has been fully put into operation. The Toyama plant is an important factor for  Jiangling Group and Ford’s cooperation and upgrading, and it is also believed to be the driving force behind Nanchang Intelligent Manufacturing’s global expansion. 

Chen Anning, vice president of Ford Motor Group and president and general manager of Ford China, said the Toyama smart factory is a new step in the partnership between Ford and Jiangling. Work more closely with Jiangling, continue to introduce resources and advanced technology, and continue to develop products that meet the unique needs of Chinese customers. 

It is understood that the Toyama factory covers an area of ​​1,500 mu, with a total investment of about 12.8 billion yuan and a production capacity of 300,000 vehicles. Currently, light truck products of JMC Ford Territory, JMC Ford Territory, and JMC brands have been put into production, including vehicles using traditional fuels and new energy. 

From this point of view, the production capacity of Jiangling Motors in 2022 has greatly increased, but the consumption volume is not satisfactory. 

In the first half of 2022, Jiangling Motors sold 136,000 complete units, including 34,200 light buses, 37,000 trucks, 35,800 pickup trucks and 28,900 SUVs, with total sales down 23.24% year-on-year. period last year.

According to its 2021 annual report, Jiangling Motors is expected to sell 380,000 complete vehicles by 2022, with an operating income of about 39 billion yuan, an increase of 11% compared to 2021. 

Overall, in the former half of the year, JMC only achieved part of its annual goals: only 36.5% of the revenue and 35.8% of the sales records. 

If JMC’s sales in the second half of the year do not improve significantly, the company’s production capacity will largely be idle, and the newly built factories have to close down.

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