Analysis of the possibility of the listing of FAW Group


Although FAW Group is sure to complete the listing of the A shares, the overall listing may not be easy due to the difficulty in coordinating the relationship between the parties, and the “two centers” in Changchun and Tianjin, which represent the “central interest”, are more likely to be split.

The FAW Group, one of the three largest auto manufacturers in China, may be listed as a whole or speed up. According to sources from FAW Group, its overall listing related plans have reached the final preparation stage and are disclosed as soon as August. Previously, both SAIC and Dongfeng Group have achieved overall listing.

It is understood that FAW Group is sure to complete the overall listing of A-shares. Although overseas listings can increase corporate awareness, they often suffer from low pricing. On the contrary, the current valuation of the A-share market has risen sharply, which is very beneficial to the overall listing of the FAW Group.

The overall listing is expected to be the best interest of the listed companies under the company. Since the beginning of the year, its FAW Cars (000800, holding 52.96% shares) (quotations, information), FAW Xiali (000927, holdings 47.73%) (quotations, information), FAW Fourth Ring (600742, holding 20.14%) (quotations) , Information) have respectively 133%, 31% and 131% gains. Among them, FAW Car manufactures Pentium and Hongqi, FAW Xiali has considerable sales of economical cars, and FAW Sihuan engages in production of parts and components. Among the assets of FAW Group, the assets of the unlisted portion mainly include FAW-Volkswagen, a joint venture company of passenger cars, FAW-Toyota and FAW-Liberation.

Due to the long-term poor operation of FAW Jiefang, investment income from FAW-Volkswagen and FAW-Toyota contributed half of the profits of FAW Group. Therefore, "only when it comes to FAW-Volkswagen and FAW-Toyota, the overall listing of FAW Group will have substantial significance."

The focus of the market on the overall listing of FAW lies in the integration of the passenger vehicle resources of FAW Group, especially the equity integration of the two joint ventures. Whether or not the status of the shareholder can be successfully converted so that the rights and interests of the joint venture can be entered into the scope of the listed assets by the FAW, the opinions of the joint venture party are not in the past.

Previously, the overall listing of Dongfeng Motor and Shanghai Automotive was to put all operations into a listed company. In March of this year, JAC Chairman Zuo Yanan once told the Journal that the level of the JAC Group is only a holding company. The existing two listed companies, JAC and Ankai, include the company's main business, so there is no longer a whole. The need for listing.

It is said that within the FAW Group, the biggest difference is whether to choose “total listing” or “split listing”, either as Dongfeng Automobile and SAIC Motors will put all their core businesses into a listed company, or as JAC Group, all core The business is divided among several listed companies.

Behind the differences is the contest between the "central" and "local" forces of the FAW Group. On the one hand, FAW Car, located in Changchun, has many years of experience in product development and manufacturing of mid- to senior-level products, and has a good profitability. Although FAW's liberation has been slow, it has accumulated the most abundant accumulation of assets and technology. The party representing Changchun’s local interests believes that FAW Group must use Changchun as a base to inject FAW-Volkswagen assets and FAW Toyota’s assets.

If this line of thinking is followed, FAW Group, which has a high shareholding in FAW Group and is located in Changchun, will become the only listed platform for FAW Group. Passenger cars (including equity in the joint venture company), commercial vehicles and parts and components will all be injected step-by-step, and the placement of equity in FAW-Volkswagen may begin.

“The red flag car produced by FAW Car is a representative of FAW Group’s own brand,” said the analyst, said that if you choose the only listed platform, FAW Car will be the best choice, in addition to the support of past performance, but also in line with FAW Group's vigorous development Independent innovation brand strategy.

However, the other party, including FAW Xiali and FAW Toyota, which represents the “Central Interest” of FAW Group, advocates that the overall listing should have two centers: Changchun and Tianjin. This proposal advocates that FAW Xiali takes over 20% of FAW Toyota’s shares held by FAW Group through private placement; according to the principle of efficiency priority, the two equity joint ventures will be placed in FAW Cars and FAW Xiali respectively, and parts assets may be injected into FAW Fourth Ring. .

It is understood that the more well-developed programs are more inclined to split several core businesses of FAW Group into different subsidiaries. For FAW, it is difficult to integrate core assets into a listed company and merge with other listed companies to achieve overall listing. The relationship between the parties is difficult to coordinate, and “for state-owned assets, the important thing is asset securitization. Rate, not simply the overall listing."



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