AutoBeta(AutoBeta.net)03/02 Report--

On March 1, Yueda Investment issued a notice on abandoning its participation in capital increase and related party transactions. According to the announcement, Dongfeng Yueda Kia Automobile Co., Ltd. (hereinafter referred to as "DYK"), which has a 25% stake, plans to increase its capital by 600 million US dollars, but due to the company's investment needs for new projects, it intends to give up its participation in the capital increase of DYK, which is partly funded by Jiangsu Yueda Automobile Group Co., Ltd.

Yueda Investment said that DYK's performance continued to lose money in 2021, which is expected to affect the company's parent net profit of about-531 million yuan. considering the fierce competition in the domestic automobile industry and the company's investment needs for new projects, the company gave up to participate in the capital increase of DYK. After evaluation, the 100% equity value of DYK is 771 million yuan, and the capital increase of DYK is 600 million US dollars. After the capital increase, the proportion of shares held by the company in DYK has been reduced from 25% to 4.2%. Since then, the vehicle manufacturing business will no longer be an important part of the company's business structure, and the company will actively look for new investment projects to improve its profitability in the future.

According to Yueda Investment's previous annual performance forecast, it is expected to have a net loss of 799 million yuan in 2021, deducting a non-net loss of 817 million yuan. As for the reasons for the loss, Yueda Investment said that due to the decline in core production and sales and the rise in precious metal prices and other factors, Dongfeng Yueda Kia continued to lose money, affecting the company's net loss of 531 million yuan. Previously, according to the listing transfer information, Dongfeng Yueda Kia made a cumulative loss of 2.612 billion yuan from January to October 2021.

Data show that Dongfeng Yueda Kia Automobile Co., Ltd. was established on September 12, 1992, jointly established by Dongfeng Automobile Group Co., Ltd., Jiangsu Yueda Investment Co., Ltd., and Kia Co., Ltd. the shares of the three parties are 25%, 25% and 50% respectively, and the operating life is from September 12, 1992 to September 11, 2022.

As the first overseas car company to enter China, it has become a marginal role in the world's largest automobile market. Before 2017, Dongfeng Yueda Kia developed rapidly. It was sought after by many consumers for its pragmatic appearance and cost-effective performance, and reached a sales peak of 650000 vehicles in 2016. Since then, with the impact of the THAAD incident, Dongfeng Yueda Kia sales have plummeted, from 360000 in 2017 to 250000 in 2020, leaving only 160000 in 2021.

As a result, on November 19, 2021, Dongfeng Automobile Group Co., Ltd. publicly listed its 25% stake in Dongfeng Yueda Kia Automobile Co., Ltd. through the Shanghai United property Exchange at a listing price of 297 million yuan. On January 12, 2022, Dongfeng Automobile Group Co., Ltd. closed its 25% stake in Dongfeng Yueda Kia Automobile Co., Ltd., with Jiangsu Yueda Automobile Group Co., Ltd. as the sole bidder. After the completion of the equity transfer, Dongfeng Yueda Kia Automobile Co., Ltd. changed into Kia Co., Ltd., Jiangsu Yueda Automobile Group, Jiangsu Yueda Investment tripartite shareholding, each holding 50%, 25%, 25%. According to information, Jiangsu Yueda Automobile Group was established on June 18, 2021, with 70% of the shares held by the controlling shareholder Yueda Group and 30% of Yancheng State-owned assets Investment Group Co., Ltd.

With the withdrawal of Dongfeng Motor, Kia will also accelerate its own reform measures. On February 7, Kia Co., Ltd. signed an expanded investment agreement with the people's Government of Yancheng and Jiangsu Yueda Group. Kia and Yueda will set up a new joint venture in Yancheng, Jiangsu Province as a base for future development. expand investment in more global models and new energy models, and rapidly improve vehicle sales and capacity utilization. According to the plan, the two sides will release the name of the new company in April this year, meaning that DYK, which has been established for 21 years, will retire from history.

Kia said that in 2022, it will increase investment in the Chinese market, strengthen brand building, improve organizational efficiency, improve product quality, and improve the level of dealer operation and management. According to the plan, this year is the first year for Kia to start electrification. In addition to introducing HEV hybrid models, the pure electric model EV6 will soon be introduced into China. By 2027, starting with the new pure electric vehicle EV6, Kia will launch new electric models in the Chinese market every year and gradually build a new EV matrix for six electric vehicles. In the next decade, Kia has set the goal of producing and selling more than 4 million vehicles in China. In addition, in order to further create high-quality products and accelerate the introduction of more competitive global models, Kia will gradually stop producing models below 100000 yuan.

As for the impact of Yueda Investment abandoning the capital increase, it is still unknown. Although Yueda Investment said that giving up the capital increase was based on performance considerations, as Yueda Investment's stake in DYK fell to 4.2%, it meant that the previous "three-person bank" had become "Errenzhuan", and with the determination of the proportion of capital increase in the new joint venture, Kia may strive for greater stock ratio and control, and perhaps evolve into a "one-man show" dominated by Kia.

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