Shanghai (ZXZC)- Chongqing Sokon Industry Group Stock Co.,Ltd. (Sokon), a Chongqing-based automaker and auto parts supplier, posted an expanded profit loss in the first quarter of 2020, mainly attributable to the shock wave sent by the coronavirus pandemic.

For the first three months, the company encountered a net loss of RMB494,219,332.72 belonging to the shareholders of the public company, versus the loss of RMB81,664,662.9 for the prior-year period. The net loss excluding extraordinary profit and loss was expanded to RMB462,366,610.43 from RMB89,997,477.75 for a year earlier.

(Sokon C37, photo source: Dongfeng Sokon)

Regarding the factors leading to the widened loss, Sokon laid the majority of the blames on the abrupt coronavirus outbreak which substantially hit the first-quarter production and sales volumes.

Affected by the pandemic-caused volatility in global economy, the impact of exchange rate fluctuations led to a loss worth around RMB71 million. Additionally, a loss of roughly RMB56 million on the changes in fair value resulted from the price decrease of the stocks Sokon holds in Chongqing Rural Commercial Bank. 

During the same period, Sokon earned RMB2,385,040,155.84 in the first-quarter revenue, a year-on-year slump of 49.63%. The operating costs also shrank 41.12% to RMB2,245,802,022.92. Both downturns were largely due to the decrease in sales volume of complete vehicles and engines.

Moreover, as the vehicle sales volume and the cash gained from selling products and offering labor services were brought down by the coronavirus spread, the company posted a negative net cash flow of RMB479,223,461.87 generated by operating activities, compared to the cash flow of RMB-305,328,415.97 for the year-ago period.

(Photo source: Sokon)

Under the cemented partnership, Sokon is allowed to develop its complete vehicles based on Dongfeng's mid- to large-sized conventional vehicle platform and modular NEV architecture. Both parties will share with each other the resources of engines, transmissions, batteries, electric motors and electronic control units (ECUs).

Besides, two companies will co-develop the iterative vehicle models on the foundation of Dongfeng's existing electronic framework, jointly carry out a larger scale of procurement so as to lower the unit cost, and coordinate their production capacities by sharing resources and technologies.

Jinkang New Energy, a NEV subsidiary of Sokon, is permitted to name its mid-level and premium product brand “Dongfeng SERES”, according to the agreement.