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On August 23, Caixin reported (Reporter Wu Chao) that in the intensified competition in the electric two-wheeled vehicle industry, Jiangsu Xinri E-vehicle (603787.SH) failed to reverse the decline in sales. The semi-annual report released tonight showed that the company's non-GAAP net profit fell by over 20% year-on-year. In addition, the company is also facing significant cash outflow and high receivables.

According to the financial report, Jiangsu Xinri E-vehicle achieved operating income of 1.711 billion yuan in the first half of the year, a decrease of 15.35% year-on-year. The company attributed this mainly to a reduction in product sales and the corresponding decrease in sales revenue during the first half of the year. It is reported that in the first half of the year, Jiangsu Xinri E-vehicle shipped a total of 1.01 million vehicles. In last year's financial report, the company also mentioned the issue of declining sales, with a total of 2.3 million vehicles shipped throughout the year.

At the same time, H1 of Jiangsu Xinri E-vehicle achieved a net profit attributable to shareholders of the listed company of 49.9483 million yuan, a year-on-year increase of 6.80%; the non-recurring profit of 31.0826 million yuan, a decrease of 20.24% year-on-year. There is a certain gap between the growth rates of the company's net profit and non-GAAP net profit. This is mainly due to the government subsidy of 15.9611 million yuan obtained by the company in the first half of the year, compared to 7.0873 million yuan in the same period last year. In addition, the income and loss generated from holding and disposing of financial assets and financial liabilities in the first half of the year was 2.3044 million yuan, which was not present in the same period last year.

In addition, the net cash flow generated by operating activities of Jiangsu Xinri E-vehicle in the first half of the year was -0.233 billion yuan, compared to 96.2247 million yuan in the same period last year. This significant change is mainly due to a decrease in cash received from selling goods and services.

The high receivables position is also a major issue facing Jiangsu Xinri E-vehicle. As of the end of the first half of the year, the company's receivables amounted to 0.498 billion yuan, an increase of 57.35% from the end of last year. The company stated that this increase is mainly due to the relaxation of credit policies to cope with market competition, leading to the increase in accounts receivable.

Jiangsu Xinri E-vehicle's main product is electric two-wheeled vehicles. According to the company, since the 223 Nanjing fire in Jiangsu, the State Council has required relevant ministries to carry out a comprehensive rectification of hidden safety hazards in the entire chain of electric bicycles. As a result, end consumers in the market are showing a certain wait-and-see attitude, further intensifying competition in the electric two-wheeled vehicle industry.

In fact, apart from Jiangsu Xinri E-Vehicle, many leading companies in the electric two-wheeler industry have experienced a decline in sales this year. For example, Yadea Holdings (1585.HK), currently the industry leader in market share, saw a total sales volume of electric scooters and bicycles decrease from 8.2107 million units in the same period last year to 6.3826 million units, a decline of 22.26%.

The Caixin reporter also noted that in order to strengthen the management of the electric bicycle industry in China and regulate the production and operation behavior of enterprises, the Ministry of Industry and Information Technology, the State Administration for Market Regulation, and the National Fire Rescue Bureau jointly issued the "Specifications for the Electric Bicycle Industry" and the "Administrative Measures for the Specification Announcement of the Electric Bicycle Industry" in April this year. However, Xinri E-Vehicle did not make the list of companies that meet the "Specifications for the Electric Bicycle Industry" released by the Ministry of Industry and Information Technology this month.

In response to this, Xinri E-Vehicle stated that the company has actively responded and organized the establishment of a special team responsible for applying and submitting an enterprise whitelist that complies with the specifications.

In the face of a more complex industry situation, Xinri E-Vehicle has decided to build new production bases to expand production capacity and improve comprehensive production capabilities. The newly planned projects include the construction of the Tianjin Intelligent Factory (Phase I), the construction of the Huizhou Intelligent Factory (Phase I), and the establishment of a production and manufacturing base in Indonesia.