AutoBeta(AutoBeta.net)08/20 Report--

On Aug. 20, Avita Technology signed an "equity transfer agreement" with Huawei, agreeing that Avita Technology would buy 10% of Huawei's stake in Shenzhen Eye Intelligent Technology Co., Ltd. (hereinafter referred to as "lookout"), with a transaction value of 11.5 billion yuan. After the deal, Avita technology owns 10% of the company, while Huawei holds 90% of the company.

Data show that Shenzhen Wangwang Intelligent Technology Co., Ltd. was established on January 16, 2024, with a registered capital of 1 billion yuan. It is a wholly owned subsidiary of Huawei Technology Co., Ltd. at present, it has set up subsidiaries in Dongguan, Hangzhou, Shanghai, Nanjing and Suzhou, engaged in the research and development, design, production, sales and service of automotive intelligent system and component solutions. The main business scope includes automobile intelligent driving solution, automobile intelligent cockpit, intelligent vehicle control, intelligent vehicle cloud, vehicle light and so on.

In November 2023, Changan Automobile announced that the company and Huawei signed a "Memorandum of Investment Cooperation" in Shenzhen on the 25th. According to the announcement, after consultation between the two sides, Huawei intends to set up a company engaged in the research, design, production, sales and service of automotive intelligent systems and components solutions, and Changan Automobile plans to invest in the company and carry out strategic cooperation. the two sides jointly support the company to become an industry leader in automotive intelligent systems and components solutions based on China, facing the global and service industries.

According to the Memorandum of Investment Cooperation signed by the two sides, Huawei plans to integrate the core technology and resources of the smart car solutions business into the new company, and Changan Automobile and related parties will intend to invest in the company. and work with Huawei to support the company's future development. It is reported that the new company's business scope includes car intelligent driving solutions, car intelligent cockpit, smart car digital platform, smart car cloud, AR-HUD and smart lights and so on. Changan Automobile said that Changan Automobile and its related parties intend to contribute no more than 40% of the equity of the target company, and the specific equity proportion, capital contribution amount and time limit will be discussed separately by the two parties.

At that time, Changan Automobile and Huawei only signed a letter of intent and did not reach a consensus. As for why Changan Automobile ended up buying a stake and attracting 10%, it was probably based on financial considerations. According to Avita's 10% stake at 11.5 billion yuan, the valuation has reached 115 billion yuan. If Changan Automobile wants to take a 40% stake, it will need 46 billion yuan, which may not be able to bear so much financial pressure on Changan Automobile.

On July 10, Changan Automobile announced its performance forecast that the net profit of returning home in the first half of the year is expected to be 2.5 billion yuan to 3.2 billion yuan, down 58.19% from the same period last year. Non-net profit is expected to be 800 million yuan to 1.5 billion yuan, down 35.58% to 20.79% year on year. In other words, if Changan Automobile wants to get 40% of the equity, it will take seven years to make a profit, not to mention that in the current fierce market, the share of Changan Automobile's joint venture brands continues to shrink, and its own brands are still in the stage of development. it not only needs financial support, but also difficult to get ideal profits in the price war.

In 2023, the full-year net loss of Avita Technology was 2.015 billion yuan, compared with-3.693 billion yuan in 2022. After entering 2024, with the intensification of market competition, Avita is still in the period of strategic investment, and it has invested a lot of resources in product research and development, brand promotion, channel building, and the introduction of technical talents. It not only has no money, but also urgently needs new financing. There is an urgent need to create momentum to enhance brand influence. At present, Avita Technology is the only company under Huawei's HI model. At present, Avita 11 and Avita 12 have been launched. The former is medium and large SUV, the latter is medium and large sedan, which combines the advantages of Changan, Huawei and Ningde era and carries the important task of Changan automobile high-end new energy brand development. However, compared with extreme krypton, Ulay and Xiaomi in the market of 20-300000 yuan, there is no absolute advantage. Retail figures show that 6238 Avita 11 and 14413 Avita 12 were sold in the first seven months of 2024.

In addition to Avita Technology, Cyrus announced on July 28 that the company intends to invest in Shenzhen Intelligent Technology Co., Ltd. if the transaction is completed, it will become a shareholding subsidiary of the company. However, Selis did not disclose the proportion of the stake, which is expected to be around 10%. It is speculated that in the future, car companies will buy shares and eventually hold 40% of the shares, while Huawei will own 60%.

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