AutoBeta(AutoBeta.net)06/18 Report--

Under the influence of the market, Geely soared 7.56% after the Hong Kong Hang Seng Index fell 0.39% in the latest trading day. The reason is that Geely Motor announced in an announcement on the evening of the 17th that the board of directors approved the preliminary proposal for the listing of the Shanghai Stock Exchange Co., Ltd., which means that Geely Motor may return to the "A-share" listing.

The size of the renminbi shares to be issued will not exceed 15 per cent of the issued share capital of the company after the increase in the number of renminbi shares to be issued. The RMB shares are new shares and will not involve the conversion of existing shares, and the proceeds are currently intended for business development and general working capital.

With regard to the specific plan and timetable for this A-share offering, Geely said that it will disclose to the market in a timely manner after fulfilling the internal decision-making procedures and the relevant approval, examination and registration procedures of the Hong Kong Stock Exchange, the securities regulatory authorities in China and the Shanghai Stock Exchange.

In fact, Geely's A-share listing is related to the promotion of positive policies. On April 30, the CSRC issued a notice on the relevant arrangements for the listing of innovative pilot red-chip enterprises in China, which adjusted the market capitalization requirements of overseas listed red-chip enterprises to "choose one of the two". Either the market value is not less than 200 billion yuan, or the market value is more than 20 billion yuan, and it has independent research and development, international leading technology, strong scientific and technological innovation ability, and is in a relatively dominant position in the competition of the same industry.

According to Geely's latest market capitalization, Geely closed at HK $11.90 on June 17, with a total market capitalization of HK $116.771 billion (106.7 billion yuan). As well as independent research and development, scientific and technological innovation, competitive advantage and other conditions are also in line with the standard.

According to public information, Geely entered the Hong Kong Stock Exchange in 2005. After years of development, it has now become a "leading position" among domestic independent brands. Therefore, there is an industry analysis, the formulation of Geely to enter the A-share market will help to improve the quality of domestic automotive sector listed companies. Moreover, since the official opening of Science and Technology Innovation Board in 2019, many Chinese enterprises listed abroad have planned to return to the mainland market, which largely reflects the further release of the vitality and gravity of the mainland market.

For Geely Automobile, it will help to open up the domestic A-share capital market financing channels, help to further diversify financing methods, optimize the capital structure, and effectively enhance the company's financial strength.

Yang Xueliang, vice president of Geely Automobile, also said that the simultaneous listing of A shares and Hong Kong will help to make better use of the international and domestic market resources of grafting and help Geely's technological transformation and long-term development in the future.

According to KuaiBao, Geely's latest production and sales, the company sold 108800 cars in May, up about 20 per cent from a year earlier. Total sales from January to May were 420300, down 25 per cent from a year earlier. Geely Motor's 2019 results show that Geely's annual revenue in 2019 was 97.401 billion yuan, down 9% from the same period last year; net profit was 8.19 billion yuan, down 35% from the same period last year, lower than the market expectation of 8.72 billion yuan; the total cash level (bank balance and cash + mortgaged bank deposits) reached 19.3 billion yuan at the end of 2019, an increase of 23% over the same period last year.

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