Valin Xingma: Sales and Capacity Expansion

Recently, the reporter learned that Valin Xingma will set up a financial leasing company in Shanghai. Hualing Xingma Securities Department official told reporters: "The establishment of financial leasing is mainly to promote the company's product sales." A Shanghai automotive industry researcher revealed to reporters: "The company set up a finance leasing company at this time, may be the digestion of production capacity Some concerns."

It is understood that Valin Investment & Trade Co., Ltd. (Hong Kong), a wholly owned subsidiary of Valin Xingma, and Anhui Xingma Automobile Group Co., Ltd., a controlling shareholder of Valin Xingma, jointly invested to establish Shanghai Huirong Financial Leasing Co., Ltd.

Valin Xingma stated that the establishment of a financial leasing company can further improve the company's marketing system, innovate the company's product sales model, promote the company's product sales, and further increase the company's product market share. It will help to ensure the company’s return of sales, increase the efficiency of fund use, and reduce the cost of funds.

It is worth mentioning that Valin Xingma is expanding its production while expanding sales. Valin Xingma issued an announcement of the “Proposed Non-Public Offering (Revision)” yesterday. It is reported that the number of non-public offerings of stocks does not exceed 180 million shares, and the total amount of funds raised does not exceed 1.97 billion yuan, and the non-public issuance price is not less than 10.55 yuan/share. The money raised by Valin Xingma will be used to expand the production capacity of heavy vehicles. Specifically, it will be used for the following two projects: an annual production capacity of 30,000 heavy-duty trucks and an annual output of 50,000 heavy-duty vehicle engines.

According to the reporter's understanding, 2011 was a downturn in the auto market, especially heavy truck sales. It is reported that heavy truck sales of 880,000 vehicles, an increase of -13.4%, is the most obvious sub-sector of commercial vehicle decline. According to public information, Hualing Heavy Truck produced 1,065 units in January 2012, a decrease of 66.75% year-on-year; sales volume was 1,043 units, a year-on-year decrease of 67.46%. Valin Xingma's operating income for the first quarter was 1,067 million, down 49.6% from the same period of last year. Hualing Xingma stated that the decrease in operating income was due to the decrease in market demand, which led to a decrease in product sales.