Yulon Motor Co (裕隆汽車) shares rallied 4 percent yesterday after the company announced that its subsidiary that distributes its own-brand Luxgen vehicles has started bankruptcy procedures in China, paving the way for its subsidiary Luxgen Motor Co (納智捷汽車) to exit the world’s biggest auto market.
Sales of Luxgen vehicles tumbled to below 3,000 units last year amid a slump in the Chinese auto market, compared with 100,000 vehicles at its peak.
Yulon has been restructuring its Chinese auto business and distribution channels over the past year as it struggles to boost Luxgen sales in China.
Photo: Amy Yang, Taipei Times
Yulon on Friday said that the Hangzhou Intermediate People’s Court has granted a request from a major creditor of Dong Feng Yulon Sales Co (東方裕隆銷售) to liquidate the assets of the distributor, which cannot pay its debts of 1.96 billion yuan (US$297.7 million).
Dong Feng Yulon Sales, which is 50 percent owned by Yulon, distributes Luxgen vehicles in China, while Dongfeng Yulon Motor Co (東風裕隆汽車), a 50-50 venture between Yulon and Chinese automaker Dongfeng Automobile Co (東風汽車), makes Luxgen vehicles.
Yulon, based in Miaoli County’s Sanyi Township (三義), has been in discussions with its Chinese partner about a restructuring of Dongfeng Yulon Motor to stem losses, Yulon told investors in August.
“The court has approved that Dong Feng Yulon Sales Co should enter an insolvency procedure, given its financial situation,” Yulon spokesman Steven Lo (羅文邑) told a media briefing at the Taiwan Stock Exchange on Friday.
“The company’s operations have been suspended since 2018. This incident will not affect Yulon’s financial reports in the first three quarters of 2020. Based on our current evaluation, it will not cause a significant financial payment, nor incur a deep debt,” he said.
Dong Feng Yulon Sales, which has paid-in capital of NT$215 million (US$7.46 million), last year fell into a dire financial situation, with liabilities surging to NT$8.39 billion, greatly exceeding its assets of NT$404 million, according to Yulon’s annual report.
Yulon shares jumped to NT$37.7 yesterday, with turnover surging to 10.62 million shares, three times the average trading volume of 3.1 million shares in the first 10 trading days of this month.
Yulon’s net profit grew 31 percent to NT$744.15 million in the quarter that ended on Sept. 30, compared with net profit of NT$567.32 million in the second quarter and a net loss of NT$1.57 billion in the third quarter of last year.
In the first three quarters of this year, Yulon made NT$1.51 billion in net profit, an improvement from a net loss of NT$2.51 billion in the corresponding period last year. This translated into earnings of NT$1.54 per share, compared with a loss of NT$3.2 per share.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
RSS