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Do Not Pay, But Promise

2024

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Video: [ENG SUB] Lost Promise 04 (Yu Wenwen, Yang Yeming) | 胭脂债 2024, March
Do Not Pay, But Promise
Do Not Pay, But Promise
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COMPANIES AND MARKETS

/ PROMOTIONS

DO NOT PAY, BUT PROMISE

FROM A SHAREHOLDER'S VIEW

TEXT / DMITRY LEONTIEV

As well as last year (ZR, 2000, No. 7), we decided to compare the financial performance of the two largest Russian car factories - VAZ and GAZ. Recall: VAZ and GAZ have a myriad of shareholders (the first, for example, over 215 thousand) and each of them decides whether to part with the securities, keep them or buy them again?

ATTRACTIVE IN PERSPECTIVE

In 2000, AvtoVAZ made a good profit - 9.8 billion rubles (about 338 million dollars). However, expenses “attributed to profit” in the same 2000 amounted to 13.6 billion rubles. As a result, losses of 3.8 billion were decided not to pay dividends. At the same time, the head of the joint-stock company, Vladimir Kadannikov, stated that a profit of 9 billion rubles was “recorded” in the AvtoVAZ budget for 2001. So, the shareholders of Togliatti can finally count on dividends? Do not undertake to predict.

If the shareholder is deprived of dividends, what should he hope for? At least the fact that the value of its securities will grow. Does AvtoVAZ OJSC have upside potential? Yes - stock market experts answer with one voice. True, no one names the dates when stocks begin to rise significantly. Now they give 124 rubles per share of VAZ. A year ago, it could be purchased for 60 rubles. Tomorrow, its price will rise to …?

As a rule, only shares of a stable, growing and promising company can increase in value. AvtoVAZ today meets these requirements. Occupying a dominant position in the domestic market, in 2000 it increased production by 4%. In 2001, plans to grow another 6.5%. Last year, VAZ doubled its export supplies, recently successfully completed negotiations with GM on launching the Niva-Chevy series, which means that the export potential of the enterprise will be significantly increased.

In general, compared with 1999, Togliatti sharply increased its investment attractiveness (we recall that in 1999 the plant's losses were at the level of 17 billion rubles). And today, analysts rightly predict the possible growth of securities of this car company. So it seems too early to get rid of the shares of VAZ.

FUTURE UNCERTAIN

Losses of GAZ OJSC in 2000 amounted to 5 billion 695 thousand rubles, despite the fact that in 1999 the plant remained profitable (174 million 400 thousand rubles) and paid very good dividends to shareholders. Where did the losses come from? Part - as if "out of thin air" (the costs of switching to a new reporting form). Another reason is the transition to other economic principles in work - the rejection of barter settlements with dealers, the increase in prices for materials and components, etc.

Be that as it may, in 2001 GAZ shareholders did not wait for dividends. Are there any prospects? In 2000, the volume of production in the Lower fell by 5% compared with 1999. At the last meeting of shareholders, the plant management promised to establish the mass production of Steyr diesel engines and put Ataman pickup trucks and a new Volga onto the conveyor. Today, these plans are postponed indefinitely. The shareholders hoped that the new general director, Mr. Belyaev, would bring clarity to GAZ's production policy. However, speaking to them in June this year, he limited himself to a general statement that "things are going badly."

The production of cars and trucks in Nizhny falls (the third shift was canceled at the Volga plant). Only the minibus program is growing.

SUMMARY

In last year's review (ZR, 2000, No. 7) we gave the palm to GAZ. In the present, we can note: the position of VAZ is more advantageous, the prospects are more visible. This is confirmed by economic indicators: stock price, growth (decrease) in production and profit and loss statement.

CHANGES TO ORDINARY COSTS

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