Zhongtai Auto Issues "resumption of Work and Production" Announcement

(Source: Electric Knowledge)

Electric Knowledge reports that recently, Zotye Auto (000980.SZ) announced that its wholly owned subsidiary, Zhejiang Shenkang Automotive Body Molds Co., Ltd. (referred to as “Shenkang Body”), resumed work and production on March 18, officially restoring operations.

It is important to note that this resumption of work and production involves Zotye Auto’s wholly owned subsidiary, not Zotye Auto itself. However, Zotye Auto also stated in the announcement that this restart will help improve the company’s parts supporting system and lay a supply chain foundation for the development of new platforms and new vehicle models.

From Zotye Auto’s announcement, it is clear that the company still aims to “revive.” Zotye Auto is one of the few automakers that has received such high attention after declaring bankruptcy. Although it has largely lost its vehicle manufacturing capacity and is in a dire situation of “shell preservation for survival, debt restructuring, and partial resumption of work,” Zotye Auto (000980) is still listed on the A-share market. As of March 22, the company’s total market value remains over 12.5 billion RMB.

Currently, Zotye Auto’s performance shows an expected loss of 281 million to 417 million RMB in 2025, a reduction compared to previous losses, but it has had negative net profits for three consecutive years after non-recurring items. Revenue is only between 454 million and 680 million RMB, and operating cash flow remains negative. The asset-liability ratio is 99.41%, nearly insolvent.

However, Zotye Auto also appears to be making continuous efforts to revive. In early March, it nominated Zhong Yufei, with a Xiaomi background, as a candidate for non-independent director of the ninth board. On January 23, Zotye Auto announced that it had officially signed a “Working Capital Loan Contract” with Zhejiang Yongkang Rural Commercial Bank Co., Ltd., with the first batch of 343 million RMB in loans already disbursed. Previously, Zotye’s engineering research institute launched large-scale recruitment for 49 positions. There were even rumors of cooperation with Chery and BBK.

Nevertheless, we must face reality: by 2025, Zotye’s vehicle production will be basically halted, with many bases idle, supply chain broken, and technical team losing members. Although there are partial resumption efforts, full recovery of vehicle manufacturing remains highly uncertain, and it is unlikely to see a full restart in 2026. Furthermore, after the 2026 annual report is disclosed, it is almost certain that the company will be designated as *ST, and if net assets turn negative, it will trigger delisting risk warnings.

Some people jokingly say that Zotye Auto was born at the wrong time. While this is just a joke, it also reflects the importance of innovation for enterprises. For the industry, it is a typical example of China’s automotive market evolving from “wild growth” to “survival of the fittest.”