AutoBeta(AutoBeta.net)04/25 Report--

On April 24, brilliance China announced that there have been a number of recent media reports that the Shenyang municipal government may acquire shares in the company from brilliance Automobile Group holding Co., Ltd., the controlling shareholder of the company, through its wholly-owned subsidiary Liaoning Xinrui Automobile Industry Development Co., Ltd., which actually holds about 30.43% of the issued share capital of the company and is now undergoing restructuring. The Board would like to clarify that to the best of the Company's knowledge, knowledge and belief after making all reasonable enquiries, the Company is not aware of the matters reported in the media and the source of the information contained therein.

The Shenyang municipal government is discussing a possible acquisition of a 30 per cent stake in brilliance china, which is being restructured, thereby indirectly owning BMW brilliance, a joint venture owned by brilliance china, according to media reports citing people familiar with the matter. The Shenyang municipal government is also considering eventual control of brilliance China, but the acquisition of 30 per cent or more of the shares in Hong Kong-listed companies would trigger a mandatory and unconditional offer to buy the remaining shares, and buyers can apply for exemption from market regulators, according to people familiar with the matter.

Affected by the news, brilliance China rose more than 11% at one point and closed up 5.25% at HK $3.21 per share, with a total market capitalization of HK $16.2 billion.

Data show that brilliance Automobile Group holding Co., Ltd. is a large vehicle manufacturing enterprise controlled by Liaoning SASAC, directly or indirectly holding and participating in four listed companies. and through its listed company brilliance China Automobile holding Co., Ltd. and BMW Group Joint Venture established brilliance BMW Co., Ltd. In November 2020, the Shenyang Intermediate people's Court ruled to accept the creditor's application for the reorganization of brilliance Automobile Group Holdings Co., Ltd., which marked that the car company had officially entered the bankruptcy reorganization procedure. Since then, it has been voted on for several rounds of bankruptcy reorganization plan, but it has not been passed yet.

In May 2003, brilliance China Automobile Holdings Co., Ltd. and BMW Group jointly established brilliance BMW Motor Co., Ltd., each holding 50%. In February 2022, BMW announced that its joint venture brilliance BMW in China had obtained a new license, increasing its stake in brilliance BMW from 50% to 75%, and brilliance China continued to own 25% of brilliance BMW. With the change of brilliance's stake in BMW, brilliance BMW was merged into the BMW Group, and brilliance China's contribution profit as a joint venture shrank to 2.38 billion yuan from 14.52 billion yuan in 2021, down 83.6 per cent from a year earlier.

On March 29, brilliance China released its annual financial report for the year ended December 31, 2022. According to the financial report, brilliance China's comprehensive income in 2022 was 1.131 billion yuan, down 47.2% from the same period last year, and the profit attributable to shareholders was 7.147 billion yuan, down 40.25% from the same period last year.

According to the financial report, brilliance's main business in China is the main associate brilliance BMW Co., Ltd. (hereinafter referred to as "brilliance BMW") manufacturing and selling BMW cars in China. Subsidiaries Ningbo Yumin Machinery Industry Co., Ltd. (hereinafter referred to as "Ningbo Yumin") and Mianyang brilliance Ruian Auto parts Co., Ltd. (hereinafter referred to as "Mianyang Ruian") manufacture and sell auto parts. Brilliance East Asia Auto Finance Limited (hereinafter referred to as "brilliance East Asia Auto Finance") provides auto financing services. Brilliance China said that the decrease in consolidated revenue was mainly due to the exclusion of Light bus and MPVs sales of Huachen Renault. In addition, COVID-19 's epidemic interfered with business operations, resulting in a significant reduction in auto finance revenue from brilliance East Asia.

At present, brilliance is still in a state of restructuring, and it is still unknown who will become brilliance's white guard, but as a large vehicle manufacturer and as a partner of BMW Group, brilliance will not "die". However, after losing control of brilliance BMW, it has been difficult to return to China's mainstream auto market. With the transformation of automobile electrification and intelligence, the global automobile industry is reshuffling in the wave of change, and the future restructuring of brilliance Group is still full of fog.

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