Eat 45% stake in Fuqi Dongfeng Holdings
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At 11:30 a.m. yesterday morning, Dongfeng Motor and the Fujian Provincial Government signed the "Fujian Provincial People's Government and Dongfeng Motor Strategic Cooperation Framework Agreement" in Fuzhou. Dongfeng Motor was transferred to a 45% stake in Fuzhou Automobile Group held by Fujian Provincial State-owned Assets Supervision and Administration Commission in a capital increase manner. . This is the second case of large-scale reorganization and mergers in the industry since the national competent authority publicly encouraged the merger and reorganization of the automobile industry in 2009.
The reporter was informed exclusively that while Dongfeng Motor holds shares of Fuqi Group, it will form an investment company with Fuqi Group and the investment company will hold 50% equity of Southeast (Fujian) Automobile Industry Co., Ltd. Dongfeng Motor will invest in part of the shares or capital increase of South East Automobile held by Fuzhou Automotive Group, accounting for 2-3% of the investment company, and Fuqi Group will account for 1/3 of the shares. According to the agreement between Dongfeng Motor and the Fujian Provincial Government, in 2015, the annual sales (including engines) of the southeastern autos will reach 300,000 if promoted by Dongfeng Motor. Fujian State-owned Assets Supervision and Administration Commission will transfer the remaining shares and Dongfeng Motor will account for more than 60% of the shares of the Group. .
After the signing of the strategic framework agreement, Dongfeng Motor will perform due diligence on Fuqi Group and its subsidiaries. The due diligence, audit and property assessment plans were completed in July this year. "We will strive to sign the equity transfer and capital increase agreement by the end of September 2013." According to the cooperation agreement, Dongfeng Motor will first assist Southeast Automotive in achieving an annual production and sales of 300,000 vehicles and supporting engine projects in Fujian. By 2015, it will achieve a total vehicle sales of 375,000 vehicles and in 2017 it will reach 610,000 vehicles. At the same time, the engine project is scheduled to be put into operation in 2015. In 2017, it will produce 150,000 units a year.
Fuqi Group is a wholly-owned enterprise of the Fujian Provincial State-owned Assets Supervision and Administration Commission. It was established in 1992. Its main business covers vehicle manufacturing, parts and components, and logistics. It owns Southeast Automotive, Xiamen Jinlong, Xinlongma and Fujian Daimler. The total vehicle sales of Fuqi Group in 2012 was approximately 200,400 units, and its operating income was 10.26 billion yuan. Its largest subsidiary, South East Motors, had a 2012 operating income of 7.261 billion yuan, net profit and total comprehensive income of 37.295 million yuan, a year-on-year increase of 11.28%.
Due to slow product launches and other reasons, Fuqi Group's performance has been slow to increase in recent years. Since 2009, it has been seeking external cooperation. Previously, it had contacted GAC and Beijing Automotive Group Corporation.
Dongfeng Motor is the second largest auto group in China. It has established joint venture passenger car companies with multinational automobile companies such as Honda and Nissan, and owns self-operated passenger cars and commercial vehicles. In 2012, it sold 3.085 million vehicles. Dongfeng Group's 2012 sales revenue was 124.036 billion yuan, a year-on-year decrease of 5.6%; net profit was 9.092 billion yuan, a year-on-year decrease of 13.25%.
According to insiders of Dongfeng Motor, in addition to the development needs of the company and Fuqi, the Ministry of Industry and Information Technology and the SASAC and other competent authorities are behind the reorganization.
Dongfeng Motor did not announce the increase in the amount of funds, but it estimated that the new investment was about 20 billion yuan, and the scale of output value was more than 100 billion yuan, and the investment in automobile-related industries in Fujian Province was about 60 billion yuan. The vision of Dongfeng Motor and the Fujian Provincial Government is to make full use of the resources of Fuqi Group and Dongfeng Company in the fields of vehicle manufacturing, parts and components, and automotive finance to form complementary development and build Fujian Province into a million-class automotive base in 2017. .
Liu Weidong, deputy general manager of Dongfeng Motor, told the reporter yesterday that the early stage of the reorganization with Fuqi will be Southeast China Automobiles, and will gradually increase the integration of Fujian Daimler and Xiamen Kinglong. Dongfeng Automobile also stated that through cooperation with Fuqi, Dongfeng Motor can quickly realize its strategic layout in the southeastern coastal areas and use Fujian’s geographical advantages to “go to sea†to accelerate the pace of “going outâ€.
A securities company analyst believes that it is expected that the reorganization of information will boost investors' confidence and will generate a round of interest for Dongfeng Motor's Dongfeng Motor Group (00489.HK). However, she also believes that the profitability of Fuqi Group's assets is weak, there are a number of projects under construction that require continuous investment in funds, coupled with complex equity relationships, so the outlook remains to be seen.
Dongfeng Motor Group rose slightly yesterday, the opening price of 12.41 yuan to close at 12.64 yuan.