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According to the announcement of Beijing Property Rights Exchange project, FAW Pentium Car Co., Ltd.(hereinafter referred to as "FAW Pentium") plans to introduce external investors through capital increase. It is understood that this is the first time since the establishment of FAW Pentium capital increase project.

According to the announcement of capital increase project, FAW Pentium plans to raise funds of "no less than 165 million yuan". After the capital increase is completed, the total shareholding ratio of the original shareholders and the member enterprises of China First Automobile Group Co., Ltd. increased through non-public agreement shall not be less than 97%, and the shareholding ratio of the investors publicly introduced through the North Stock Exchange shall not exceed 3%. The expiration date of information disclosure is August 14 this year.

FAW Pentium is a subordinate enterprise of FAW Group. It was established in June 2019. The registered capital of the company is RMB 6027.5 million Yuan, and the legal representative is Yang Li. Before March 2020, FAW Pentium is 100% owned by FAW Car Co., Ltd.; after March 2020, FAW Pentium is 100% owned by China First Automobile Co., Ltd.(hereinafter referred to as "FAW Shares").

Although the Pentium brand has been established for many years, its development has not been satisfactory. In May 2021, FAW Pentium once set the production and sales scale of 300,000 vehicles in 2023 and 600,000 vehicles in 2024 - 2025, and challenged the sales scale of one million vehicles. However, in fact, since 2020, FAW Pentium sales volume has been declining. According to the data, the sales volume of FAW Pentium in 2019 was 120,500 vehicles, with a year-on-year growth of 33%, but the sales volume in 2022 was only 80,100 vehicles, with a year-on-year decline of more than 30%, and in 2021 it declined to 58767 vehicles.

The continued downturn in sales has also caused FAW Pentium to lose money year after year. In this announcement, FAW Pentium disclosed the latest operating conditions. According to the data, from 2020 to 2022, FAW Pentium's operating income was 8.553 billion yuan, 6.016 billion yuan and 6.034 billion yuan respectively; net profit losses were 4.860 billion yuan, 3.758 billion yuan and 2.097 billion yuan respectively. In addition, from January to May this year, FAW Pentium's operating income was 2.838 billion yuan, and its net profit loss was 997 million yuan. From the data analysis, although FAW Pentium net profit loss overall narrowing trend, but more than three years has accumulated losses of 11.71 billion yuan.

As a subordinate enterprise of FAW Group, FAW Group has also repeatedly "blood transfusion" to FAW Pentium. According to Sky Eye information, in March 2020, the registered capital of FAW Pentium increased from 50 million yuan to 1.627 billion yuan, and increased to 6.027 billion yuan again in April 2023. However, despite this, FAW Pentium still appears insolvent situation. In 2020, FAW Pentium assets are 827,874.11 million yuan, liabilities are 106,8089.19 million yuan, and asset-liability ratio is 129%. FAW Pentium's asset-liability ratio dropped to 72% in 2021, but rose to 83% in 2022. The latest data shows that from January to May 2023, FAW Pentium's asset-liability ratio increased to 89%.

Of course, among the independent brands, except BYD, Geely, Chery and Great Wall Motor and other head car enterprises, most of the rest of the independent brands are also in a state of loss.

FAW Pentium itself has repeatedly adopted "self-help" means to try to save the sales downturn, including brand renewal, launch of new cars and high-level changes. In December 2022, FAW Pentium released brand-new products and product logos, and released 2023 Pentium T99 and Pentium T77 with new logos. At this year's Shanghai Auto Show, FAW Pentium released three brand-new products in one breath, including mid-level large MPV Pentium M9, A-class intelligent SUV Pentium T90 and miniature pure electric car Pentium pony modified car. At that time, FAW Pentium said that the three models were aimed at new markets that had not been covered before, but in fact Pentium T90 overlapped with Pentium T77 and Pentium T55 to some extent.

Up to now, FAW Pentium's models on sale include Pentium B70, Pentium T77, Pentium T55, Pentium T33, Pentium T99, Pentium T99 and Pentium B70S, but only Pentium B70 has good sales performance. Take the sales volume from January to May of 2023 as an example, in the first five months of this year, the cumulative sales volume of FAW Pentium was 24518 vehicles, among which the cumulative sales volume of Pentium B70 was 11491 vehicles, Pentium NAT was 7157 vehicles, and the sales volume of other models was less than 2500 vehicles. For example, the sales volume of Pentium T77 ranked third in sales volume was 2377 vehicles.

Obviously, FAW Pentium has lost its advantage in the fuel car market, which is one of the reasons for FAW Pentium sales downturn. In addition,"Automobile Industry Concern" believes that with the change of automobile market pattern, new energy vehicles accelerate to encroach on fuel vehicle market, independent brands continue to attack, and FAW Pentium new energy transformation pace is relatively also an important reason for its low sales volume. At present, FAW Pentium only launches pure electric SUV Pentium E01 with a price of about 200,000 yuan, Pentium NAT aiming at B-end market and micro pure electric Pentium pony to be launched soon, but the market performance of Pentium E01 is also unsatisfactory.

In this context, FAW Pentium hopes to accelerate the transformation of new energy by introducing investors. According to the announcement of this project, the raised funds of this capital increase are mainly used to supplement the working capital of the financing party and assist the R & D and marketing of new energy vehicles of the financing party. According to the plan, in order to promote the transformation of new energy, FAW Pentium will launch 5 new energy products including A00 pure electric cars from 2023 to 2025, gradually expanding the new energy product camp.

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