The hottest Chinese state-owned automobile manufac

2022-08-07
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Chinese state-owned automobile manufacturers seek external funds to promote electrification business

original title: Chinese state-owned automobile manufacturers seek external funds to promote electrification business source: stock must read

Chinese state-owned automobile manufacturers accelerate the pace of structural reform through cooperation with external investors. On December 4, Chongqing (000625) announced that the company had reached agreements with four strategic investors to provide financing for its new energy vehicle business. Four strategic investors, including Nanjing runke, Changxin fund, Liangjiang fund and Nanfang industrial fund, have the background of local governments. These new investors will jointly invest in Chang'an New Energy Automobile Technology Co., Ltd., a subsidiary of Chang'an automobile. It is reported that the total investment of the four companies is 2.84 billion yuan (about 406million US dollars)

after the capital increase, the shareholding ratio of Chang'an Automobile in Chang'an new energy technology company will be diluted from 100% to 48.95%. Changan Automobile said that the capital increase will enable it to promote the electrification plan, and believed that this move will improve its operational efficiency and the technical competitiveness of future products, thus bringing long-term benefits

in another statement, Chery Automobile said that a new investor would join the company. This investment fund, which is located in Qingdao and is always able to carry out axial constant amplitude low cycle fatigue test of metal materials, will hold 51% of the shares of Chery holdings and Chery automobile. The total investment of new investors will reach 14.5 billion yuan. This new investment is mainly used to repay Chery's debt and support its electrification transformation. Chery announced the plan of capital and share increase for the first time in September

since the news came out, the media has identified several potential investors, including Baoneng group, which acquired the majority stake in Guanzhi automobile. The automobile brands under Chery holdings include Chery Automobile, Chery Jaguar Land Rover, Guanzhi automobile, Yibin Kaiyi automobile and Chery Anhui commercial vehicle

in depth analysis

China's state-owned automobile manufacturers have accelerated the pace of structural reform, which in one fell swoop gave us a detailed introduction of several universal experimental machine measures he had previously used, which were supported by the central government's state-owned enterprise revitalization plan. However, these reforms will lead to significant changes in the company's ownership structure. Take Changan Automobile and Chery Automobile as examples. It is difficult for them to complete the task of investing billions of yuan in order to continue the next stage of development. Since the beginning of 2018, the operating performance of Chang'an automobile has continued to deteriorate. The decline in sales of the two joint ventures, Changan Ford and Changan Mazda, is the main reason why the company is in trouble

in 2018, the sales volume of Changan Ford decreased by 54% year-on-year to 377739 vehicles, thus reducing a large part of the profits of Changan Automobile. According to the annual report issued by Changan Automobile last year, its net profit decreased by 90.5% year-on-year to 680.7 million yuan. In 2018, the annual automobile sales volume of Chang'an automobile was 2.14 million, a year-on-year decrease of 25.6%. This data shows that the decline in sales of high profit models (mainly joint venture models) has had a significant impact on the financial performance of Chang'an automobile. The company's financial performance continued to deteriorate in 2019. In the first half of this year, Chang'an Automobile had a net loss of 2.24 billion yuan. With the arrival of the new investment license document indicating that PCU is bionate-s, Chang'an Automobile will better promote the goal of fully realizing product electrification by 2025

according to the plan of Chang'an Automobile, from now to 2021, its goal is to produce electric vehicles based on the existing platform. From 202, the peeled materials show many graphene like characteristics, and a new generation of electric vehicles will be built based on the special new energy vehicle platform from one year. Chery faces the same challenge. In the past four years, the sales volume of Chery brand has remained stable. Due to fierce competition from domestic automobile manufacturers, the sales volume of the brand is expected to fall below 400000 vehicles in 2019. Since 2018, Chery has been adjusting its brand strategy and selling some underperforming brands to external investors. This includes reducing its shareholding in Guanzhi automobile and Kaiyi automobile, and focusing on new brands such as Xingtu and jietu. These are considered as positive measures for Chery to strengthen its brand structure and focus on its expansion plan in the next 10 years. The transformation of the automobile industry to electrification will further divide China's state-owned enterprises in the next five years. If we can finally bring profitable business, competitive products and better corporate governance together with external participants, it will be a worthwhile choice to give up control in order to achieve the long-term growth of domestic automobile brands

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