Dirty Clash of China's Heavy Equipment Heavies

t_co

Senior Member
Joined
Dec 20, 2012
Messages
2,538
Likes
706
Dirty Clash of China's Heavy Equipment Heavies -

(Beijing) – The dramatic fall of a media mercenary has exposed a quiet, dirty war for clients, government favors and respectability between two of the world's largest heavy-equipment manufacturers.

It's a years-long war that's been largely hidden from the public eye, on a battlefield littered with charges and counter-charges of espionage, slander and back-door deals in the Hunan Province city of Changsha, home base for rivals Zoomlion Heavy Industry Science & Technology Development Co. Ltd. and Sany Heavy Industry Co. Ltd.

That these two companies have been at each other's throats was never entirely clear. No one knows, for example, who posted on the Internet false financial reports about Sany that scared investors two years ago and sank the company's bid for an initial public offering. Some blamed Zoomlion, but investigators following orders for a probe from then premier Wen Jiabao found nothing wrong.

The recent downfall of journalist Chen Yongzhou, however, changed everything. Widely reported across China was news that Chen, a reporter for the Guangzhou-based newspaper New Express, had been detained by Changsha police October 18 for allegedly writing lies about Zoomlion's finances in exchange for money.

Chen then confessed on national television that he had indeed penned a series of stories whose aim was to intentionally slander Zoomlion. He also said that he had pocketed 50,000 yuan after the stories were published between September 29, 2012 and August 8, 2013 in New Express.

Chen's detention-center interview appeared on a state-run CCTV news show on October 26. Without directly mentioning Sany, he claimed an unidentified middleman had arranged the deal. A close-up shot of Chen's signed confession was aired during the interview, and clearly written on the page was Sany's name.

Authorities have refused additional information about Chen. But looking back at the recent history of Sany-Zoomlion relations over the past few years, it's apparent that the journalist had put himself on the front lines of a battle between Sany and Zoomlion. And the war seems far from over.
 

Armand2REP

CHINI EXPERT
Senior Member
Joined
Dec 17, 2009
Messages
13,813
Likes
6,646
Country flag
No one had to lie about Sany to ruin their IPO. Sales have crashed due to the recession in China.
 

amoy

Senior Member
Joined
Jan 17, 2010
Messages
5,982
Likes
1,845
Zoomlion's dealers in the Gulf happen to b Indian mostly.

Sany once made the headline for strongly opposing to approval of Caterpillar's acquisition of its Chinese competitor Xugong.

lately Sany sued President Obama for blocking its wind farm project in the US despite a slim chance of winning.

Sent from my 5910 using Tapatalk 2
 

Armand2REP

CHINI EXPERT
Senior Member
Joined
Dec 17, 2009
Messages
13,813
Likes
6,646
Country flag
Chinese engineering machinery firms suffer mounting bad debt
2013-11-09

As a harbinger of the economic climate, leading engineering machinery firms in China, including Sany, Zoomlion, XCMG, are feeling the pinch of a possible economic downturn.

In order to boost its sales, Sany Heavy Industry is now accepting a range of orders, instead of only processing orders from major clients. The company is now expecting a marked increase in bad debt.

According to their financial statements, in the first nine months this year the revenue of Sany, Zoomlion and XCMG tumbled 26.5%, 26.1% and 25% year-on-year, respectively, with their net profits scoring even sharper declines of 49.3%, 45.48% and 46.3%. Meanwhile, as of the end of September, their accounts receivable totaled 68 billion yuan (US$11.5 billion): 22.55 billion yuan (US$3.7 billion) for Sany, 25.6 billion yuan (US$4.2 billion) for Zoomlion and 19.8 billion yuan (US$3.2 billion) for XCMG, up 50.6%, 35.6% and 11.5% respectively over the amounts at the beginning of the year.

Revenue decline, mounting accounts receivable and prolonged repayment period are proof of the industry's downturn, remarked an analyst at a securities firm. The average debt repayment period at Sany has been extended to 7.52 months now, compared with 4.7 months in the third quarter last year.

Industry insiders have predicted that the engineering machinery business will remain in the doldrums for quite a while, citing a murky economic outlook, the absence of stimulus policy and a slowdown in the implementation of infrastructural projects, according to the Guangzhou-based 21st Century Business Herald.

Accounts receivables are increasing at unbridled pace, despite strenuous efforts of leading enterprises in the line to check the increase of bad debts and cut credit risk, said Duan Jiaxuan, machinery-industry analyst at China Investment Consulting.

The huge levels of bad debt are attributed partially to the reliance of leading engineering machinery firms on credit extension to stimulate sales. Another major culprit is the macro-control policy of the Chinese government, including the control and adjustment of the realty market, suspension of mining operations, and slowdown in high-speed rail construction. Insiders remarked that the overall situation remains grave,

Chinese engineering machinery firms suffer mounting bad debt|Markets|Business|WantChinaTimes.com
 

Latest Replies

Global Defence

New threads

Articles

Top