AutoBeta(AutoBeta.net)09/06 Report--

Today, there are media reports that Tengxing Yangtze River Delta Equity Investment Partnership has reached an agreement with Chery Holding Group Co., Ltd. and paid a deposit of 4.7 billion yuan, which is expected to become the largest shareholder of Chery Automobile.

According to Qixinbao's inquiry, Tengxing Yangtze River Delta was registered on July 22 this year. Its company has 10 shareholders, namely, natural person shareholders Jin Xin, Jingfu Asset Management Co., Ltd., Xinlian Tongda (Beijing) Information Service Co., Ltd., Haining Jianshan New District Development Co., Ltd., Haining Asset Management Company, Shanghai Resheng Industrial Co., Ltd., Yueqing Nanshang Investment Co., Ltd., Shanghai Shanzhuo Industrial Co., Ltd., Shanghai Jiaying Fengsheng Investment Co., Ltd. and Dazhong New Energy Technology Co., Ltd.

If the transaction is completed, Tengxing Yangtze River Delta will become the largest shareholder of Chery Holdings, with a shareholding ratio of 30.99%, obtain 28.55% shares of Chery shares through Chery Holdings, and become the largest shareholder of Chery Holdings and Chery shares.

On September 2, Chery Shares and Chery Holdings issued a pre-announcement on capital increase and share expansion on the Yangtze River Equity Exchange, ending on September 6,2019. According to the announcement issued by both parties, Chery Holdings and Chery shares plan to introduce the same investor through capital increase and share expansion at the same time, and the same investor will subscribe for the newly added registered capital of Chery Holdings of RMB 192,192,892 million yuan and 101,293,1633 new shares of Chery shares in cash.

Chery did not comment, but learned that Chery's debt level has been well above the industry average warning line of 60%. In the first two years, Chery Guanzhi and Kaiyi brands both lost, consuming a lot of money, while Chery Automobile has been giving them blood transfusion in disguised form, resulting in too high debt pressure and a long-term asset-liability ratio of about 75%.

According to statistics, the operating profit loss in 2017 was 37.64 million yuan, and the non-operating profit of nearly 300 million yuan barely raised its net profit to 214 million yuan. As of June 30,2019, the net profit of Chery Holdings was-155 million yuan, the total assets were 90.417 billion yuan, and the total liabilities reached 68.5 billion yuan; the net profit of Chery shares was-1.37 billion yuan, the total assets were 83.08 billion yuan, and the total liabilities reached 62.29 billion yuan. In 2018, Chery's net profit was-520 million yuan, and Chery Holdings 'net profit was 1.21 billion yuan.

In the financial dilemma, Chery is still trying to save itself in the enterprise transformation. In April 2018, Chery proposed the "Lion Strategy" to further develop in the field of car networking and autonomous driving; Chery New Energy was established in 2010 and began to exert its power in the field of new energy in a forward-looking manner. However, it should not be overlooked that the continued infusion of new technologies means more funding needs.

It is worth mentioning that from January to August this year, Chery Group sold 439,000 vehicles accumulatively, with a year-on-year growth of 5.9% for its own brand sales; 65,200 vehicles were sold in August, with a month-on-month increase of 33.2% and a year-on-year growth of 5.4%; Among them, Ruihu 8 became the main net sales volume and brand of the automobile, with sales volume reaching 10198 vehicles in August, with a month-on-month growth of 10% and a year-on-year growth of 42%.

Some insiders said that once the share reform is completed, Chery automobile management will usher in a huge shock. Judging from the recent several automobile industry acquisitions, whether Baoneng acquires Guanzhi or Shenzhou acquires Baowo, it is very difficult to reorganize and integrate across industries, and what impact it has on Chery Automobile is still unknown.

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