AutoBeta(AutoBeta.net)12/27 Report--

According to information from the Shanghai Stock Exchange, the capital increase project of FAW Jilin Automobile Co., Ltd. has been completed. Shandong Baoya New Energy Automobile Co., Ltd. as an investor will invest 1.5 billion yuan to acquire a 70.5% stake in FAW Jilin. It is understood that the two sides will formally sign the contract today. After signing the contract, Baoya New Energy will become the largest shareholder of FAW Jilin, and FAW Jilin will complete the reform of "from the country to the people".

In fact, as early as July this year, it was reported that Baoya New Energy was expected to buy an 80 per cent stake in FAW Jilin for 18-2 billion yuan, but the move was opposed by FAW Jilin employees.

It is understood that Baoya New Energy, founded in 2009, started from the research and production of electric four-wheelers, and gradually entered electric bicycles, electric beach cars, electric golf carts and special vehicles and other products, but the technical content of these products is not high. In 2015, Baoya New Energy intended to enter the passenger car market and signed a new energy cooperation project with BAIC, but it came to nothing. This is why FAW Jilin employees oppose the joint venture of Baoya New Energy.

After resolving employee differences, FAW Jilin listed on the Shanghai property Exchange on October 28 to raise 1.5 billion yuan and plan to transfer 70 per cent of its shares. According to the listing plan, the intended investor's actual paid registered capital is not less than RMB 200 million yuan, must have more than five years of vehicle research and development, manufacturing and sales experience, and must have marketing performance and user base of more than 10,000 vehicles in East and Central China. At the same time, it is also necessary to have export experience, and the cumulative marketing performance of more than 1000 vehicles is preferred.

In the end, Baoya New Energy acquired a 70.5% stake in FAW Jilin with 1.5 billion yuan, making it the largest shareholder of FAW Jilin.

In fact, FAW Jilin to increase capital and shares shows more helplessness. Data show that FAW Jilin has lost money for three consecutive years since 2016, with a total loss of 3 billion yuan. Of this total, the loss in the first half of 2019 was 511 million yuan, with total assets of 3 billion yuan and liabilities of 3.358 billion yuan.

At present, FAW Jilin has Senya R7, R9 and R7 new energy passenger cars, Jiabao V777, V80, V75, V52, T50, T51 and Jiefang T80, T90 and other commercial vehicles. Data show that FAW Jilin sold about 27300 vehicles in 2018, down 52% from a year earlier. Sales figures were rarely released after 2019.

Due to the serious decline in sales and profits, FAW Jilin seems to be "isolated" by FAW Group while being marginalized by the market.

At the beginning of this year, FAW Group disclosed the "Longteng Action" for the three independent brands of Red Flag, Pentium and Liberation in the next three years (2020-2022). FAW Group gives Hongqi annual support of 400 million yuan in brand and R & D, totaling 2.4 billion yuan; Pentium supports 500 million yuan and 300 million yuan in brand and R & D, respectively, totaling 2.4 billion yuan; Liberation supports 200 million yuan in R & D, totaling 600 million yuan. As an independent brand of FAW Group, FAW Jilin did not appear in the plan.

Industry insiders said that the performance of FAW Jilin in the market in recent years is not good, and it is expected to be "isolated" by FAW Group.

This capital increase and share expansion is a rare development opportunity for Baoya New Energy. As a low-speed electric car company, it has always wanted to enter the passenger car market. Becoming the largest shareholder of FAW Jilin provides a good opportunity for development.

After the transfer of 70.5% of the shares of FAW Jilin, how will the market perform? will the remaining 29.5% of the shares be transferred? how will FAW Jilin develop in 2020? we wait and see!

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat