AutoBeta(AutoBeta.net)07/28 Report--

After Geely just announced plans to land on the Shanghai Stock Exchange Kechuang Board in June this year, another Hong Kong listed car company wants to return to A-share listing this month.

On the evening of July 27, Dongfeng Group shares announced that in order to further improve the corporate governance structure and build a financing platform at home and abroad, the company plans to apply for an initial public offering of RMB common shares (A shares) and listed on the gem of the Shenzhen Stock Exchange.

According to the announcement, the number of A shares issued this time is no more than 957 million A shares, that is, no more than 10% of the company's total share capital after the completion of the A share issue, and does not include any shares that may be issued under the over-allotment right. Subject to compliance with laws, regulations and regulatory requirements, the company may authorize the lead underwriter to oversell shares not exceeding 15% of the underwritten amount at the same issue price.

The company said that the plan had passed a motion on the proposed A-share offering and related authorization at the board meeting held on July 27, 2020, and resolved to submit these proposals to the interim shareholders' meeting, the domestic shareholders' meeting and the H-share shareholders' meeting for consideration and approval respectively. The A-share issue can only be confirmed after the approval of the interim general meeting of shareholders, the general meeting of domestic shareholders and the general meeting of shareholders of H shares and the approval or decision of the relevant regulatory authorities.

With regard to the purpose of raising funds, Dongfeng Company said that after deducting the issuance fees, the funds raised from the issuance of A shares are intended to be used for new brand high-end new energy passenger car projects, new generation automobile and forward-looking technology development projects, digital platform and service construction projects, and supplementary working capital.

It is understood that the brand-new brand high-end new energy passenger car project refers to the "Lantu" brand released by Dongfeng Motor on July 17th. according to the plan, the first concept car will also be unveiled on July 29th and is scheduled for mass production in 2021. Future products will cover models such as SUV and MPV.

In fact, Dongfeng's return is similar to Geely's previous return, which is related to the further landing of red chip related return policies. The announcement on the relevant arrangements for the domestic listing of innovative pilot red-chip enterprises issued by the CSRC on April 30 lowered the market value threshold for overseas listed red-chip enterprises to return to A-share listing to 20 billion yuan, creating favorable policy conditions for Dongfeng Company to return to the A-share market.

The difference is that Dongfeng Group chose the A-share listed plate as the gem of the Shenzhen Stock Exchange, while Geely chose Science and Technology Innovation Board of the Shanghai Stock Exchange.

For Dongfeng Motor, this listing will help to open up financing channels for domestic A-shares in the capital market, further diversify financing methods, optimize capital structure, effectively enhance the company's financial strength, and supplement the company's future high-end brands and the huge amount of funds needed for the development of the "New four modernizations".

Some netizens also asked why a company as big as Dongfeng Group is listed on the gem. Or because listed companies return at least 100 billion of A shares. According to the data, Dongfeng Company was established in 2001 and listed in Shanghai in December 2005. As of July 27, Dongfeng closed at HK $5.11, with a total market capitalization of only HK $44.028 billion.

At present, Dongfeng Motor Group Co., Ltd. currently has 14 subsidiaries, jointly controlled entities and other companies with direct equity interests, including Dongfeng Motor Co., Ltd., joint venture with Nissan Motor Co., Ltd., DPCA Motor Co., Ltd., joint venture with Japan Honda Motor Co., Ltd., Dongfeng Motor Co., Ltd., etc.

According to Dongfeng Group sales data, the company sold a total of 322200 vehicles in June, up 9.77% from a year earlier. In the first half of this year, Dongfeng sold a total of 1.4 million cars, nearly 300000 fewer than the same period last year. Dongfeng Motor Group is coming out of the shadow of the epidemic and its sales have increased year-on-year for three months in a row.

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