AutoBeta(AutoBeta.net)08/31 Report--

I learned from FAW's official website that FAW issued a notice disclosing the draft restructuring, taking the limited 100% stake in the car as a purchased asset and replacing it with the equivalent part of FAW's 100% stake in FAW Jiefang.

The draft mentions that FAW Jiefang 100% equity is priced at 27.009 billion yuan, and the purchased assets are priced at 5.088 billion yuan, with a difference of 21.921 billion yuan, of which 19.921 billion yuan is paid by the company in the form of issuing shares. At the same time, the company plans to raise no more than 3.5 billion yuan.

Prior to this, FAW sedan's main business is the development, manufacture and sales of passenger cars, including FAW Pentium, FAW Mazda and other passenger car models. The transfer of FAW's high-quality asset FAW Jiefang to FAW cars will improve the profit situation of FAW cars, and at the same time, it will also solve the problem of inter-industry competition among FAW subordinate enterprises. After this transaction, FAW shares are still the controlling shareholders of the listed company, and the controlling shareholders and actual controllers of the listed company remain unchanged. While the main business of the city company will be changed to the R & D, production and sales of commercial vehicles.

At the same time of the release of the draft, FAW car also released its 2019 half-year report. In the first half of this year, FAW car realized operating income of about 10.701 billion yuan, down 18.28 percent from the same period last year; net profit belonging to shareholders of listed companies was about 9.6404 million yuan, down 88.09 percent from the same period last year; net profit belonging to shareholders of listed companies after deducting non-recurring gains and losses was about-95.1988 million yuan, down 52.37 percent compared with the same period last year.

FAW car explained in the announcement that in the first half of this year, the sales volume of the domestic passenger car market declined seriously, and the competition in the automobile market continued to intensify. At the same time, affected by factors such as the switching between the fifth and sixth countries, the rising prices of the precious metal market and the fluctuation of the yen exchange rate, the increase in product costs, coupled with the decrease in investment income, led to varying degrees of decline in the company's operating indicators.

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