Reuters reported on February 9th that Deloitte's Corporate Restructuring Services Partners, Li Jiaen, He Xiaoda and Yang Leiming, have been appointed as the joint venture between Beitai Venture Group Co., Ltd. and Beitai Automotive Industry Holdings Co., Ltd. Individual provisional liquidators. It is reported that it was Beitai’s independent non-executive director who applied to the court for the company’s provisional liquidation procedure. At present, the company is still operating. Deloitte has sent personnel to take over Beitai's factories in Beijing and Anhui. It has not shut down the factory or laid off staff.
Since July and August 2008, Beitai has signed five forward foreign exchange contracts with several banks. The forward contract is basically a one-year period and expires in July or August 2009. Earnings or losses are calculated with reference to certain pre-set exchange rates between the AUD/JPY and the NZD/JPY respectively, and are denominated in Japanese yen. Two weeks delivery. The above contract has a profit limit but no stop loss. Starting in early December of last year, the changes in the foreign exchange market may result in huge losses in the contracts and caused the company's net profit for the fiscal year 2008-2009 (as of March 31, 2009) to be negative.
At the beginning of last month, the company was informed that Shanghai Industrial Investment Group had filed a claim with the court a few days ago and requested Beitai to repay a total amount of 326.6 million yuan in advance, related fees and interest. Shanghai Industrial Investment Group is a partner that Beitai has been starting since 2000. It exports products to Beitai and at the same time, Shanghai Industrial Investment Group promises to provide advance payment for Beitai's production. This cooperation was terminated in June 2008, and Beitai and Shanghai Industrial Investment Group agreed to return the advance payments and related fees provided by Shanghai Industrial Investment Group in monthly installments from July 2008 to December 2009. interest.
Beitai Automobile Industry Co., Ltd.'s parent company Beitai Venture Group Co., Ltd. was founded in 1984.
[Analysis Review]
1. Without this financial crisis, Beitai may become one of the legends in the history of China's auto parts development. Beitai ranked 27th in the list of "2007 China Top 100 Auto Parts Manufacturers" published in November 2008. The company's history is relatively brief. It began in batch production at the first factory in Beitai, Anhui Province, in June 1997. By 2004, it has become one of the top 100 parts manufacturers in China and has entered the supporting system of Shanghai GM, Chrysler and Beijing Benz. .
2. However, there have been two destabilizing factors in its rapid and glorious history: First, the development of the company relied heavily on the operation of financial institutions and capital markets; second, the company had opened up foreign markets when it had no firm domestic market operations. Most of its business comes from foreign markets, especially the North American market. Both of these factors broke out in the wake of the financial crisis last year and eventually pushed North Thailand to a dead end.
3. In 2008, auto parts industry companies played financial instruments, just like the ordinary stock speculators. They did not have the financial resources to support them, but they often ended up losing completely. In this regard, we must reflect on the advantages and disadvantages of developing auto parts companies when they are closely related to financial institutions and even acquired by them. We can see that a quarter of German large and medium-sized auto parts suppliers have the background of financial investors, and after the financial crisis, these companies have “bleeded every drop of blood†and several consecutive companies went bankrupt. However, in a better economic situation and a relatively stable financial market, the positive role of financial institutions can be more clearly demonstrated, for example, it can bring good strategies and management ideas, help companies to reduce costs, and encourage companies to pay attention to cash flow rather than Simple production and sales scale. However, even in the latter case, many parts and components companies have been sold at high prices after being taken over by the financial institutions several years later. They are often overlord and are ultimately unfavorable to the automotive industry, which is particularly in need of long-term stable investment.
4. The development model of Beitai’s first export market and the resumption of the domestic market is questionable. Although the development of the international market is a good development strategy, it is necessary to have a solid foundation for domestic market operations before this. Otherwise, in the case of North America and other markets caused by the financial turmoil in 2008, there is not even a retreat (so-called no Outside is not strong, no internal instability). Beitai's management should also be aware of its over-reliance on the export market. So in 2005 and 2007, they handled two customers, Beijing Benz and Shanghai GM, respectively. In July 2008, they proposed to bring domestic market business in the next few years. The proportion increased to 50%, but their domestic business expansion was not as fast as the financial turmoil and eventually became an astounding victim of the financial turmoil. The Gasgoo Automobile Research Institute believes that it is the pragmatic policy of the company to open up the export market only with a solid internal service and to conduct internal and external repairs, and to grasp the rhythm of the domestic and foreign markets. This also applies to vehicle companies. If domestic automakers of the independent brands are not stable in the domestic market and are not enough to support their scale production, they will start to expand their export markets. This is also a great risk.
5. Besides the fact that Beitai is too dependent on the capital market and export market, the reasons for its loss are that its export market is not diversified, and (as can be seen from the available information) is mainly concentrated in North America; the customer base is not diversified enough. The customers in the matching market are mainly Chrysler, Shanghai GM, and Beijing Benz. They are still not dispersed enough. Both Chrysler and GM are the worst-hit car companies in this financial crisis. Beitai called it "an important strategic partner for the Chrysler Global Recovery Plan." The result was weighed down by Chrysler, and the amount it provided to Beijing's Mercedes would not Very big because the sales of Beijing Benz in China are not great.
6. Beitai can be regarded as a typical case of a company that relies too much on the export market (especially the North American market) under the financial turmoil, but we cannot deny it because we can't deny the road to internationalization, just as we can't blame this financial crisis. Originated from the United States and Europe, it is believed that China’s financial system is the best and does not need to learn from the United States and Europe, but it is more solid before it goes out of its way.
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