AutoBeta(AutoBeta.net)09/28 Report--

After Nanjing Boxun and Tianjin FAW announced their intention to establish a joint venture company on April 29 this year, the joint venture process was once again accelerated, and the two sides formally signed an agreement with September 27 to formally establish a joint venture company.

Tianjin FAW Xiali Automobile Co., Ltd. announced on the evening of September 27th that it would set up a joint venture, Tianjin Bojun Automobile Co., Ltd., with a registered capital of 2.54 billion yuan. Among them, FAW Xiali contributed 505 million yuan with assets and liabilities related to land, plant, equipment and other assets and liabilities of the whole vehicle after evaluation and record, with a shareholding ratio of 19.9%. Nanjing Bojun New Energy Automobile contributed 2.034 billion yuan in cash and held 80.1% of the shares.

On April 29, FAW Xiali announced that in order to achieve complementary resources and jointly develop the new energy vehicle market, FAW Xiali plans to set up a joint venture with Nanjing Boxun, which will use FAW Xiali's existing production line to produce new energy vehicles and help Boxun obtain the national qualification for the production of new energy vehicles.

However, five months after the two sides announced the establishment of a joint venture, FAW Xiali rarely released the details of the joint venture, and there is also talk of a joint venture between Nanjing Bojun and FAW Xiali. In fact, it is more like Nanjing Boxun using assets to buy FAW Xiali's car production qualifications.

This approach is the same as the previous car-building new power Baiteng's acquisition of FAW Huali, but there are differences. Baiteng bought 100% of FAW Huali for 1 yuan and assumed 800 million yuan in debt. From this point of view, FAW Xiali is more respectable than FAW Huali, and it is more likely to solve the problems of losses and listing competition for many years in the future.

According to the financial report for the first half of 2019 released by FAW Xiali on Aug. 30, FAW Xiali achieved revenue of about 268 million yuan, down 62.45% from the same period last year, and a loss of 551 million yuan, up 13.52% from the same period last year. Although it is less than the loss in the same period last year, it is still not optimistic.

Of course, in any case, the advantages of communication between FAW Xiali and Nanjing Boxun as a joint venture still outweigh the disadvantages.

For FAW Xiali, the current situation is not happy. Many factors, such as the overall decline in automobile market sales, strict emission standards, the deviation of the company's product positioning and configuration, and the weakening of sales channels, have led to a sustained downturn in product sales. There is an urgent need for the injection of fresh blood to make it develop, and Nanjing Boxun is "fresh blood".

Nanjing Boxun was established at the end of 2016, with a registered capital of more than 138 million yuan, and its business scope involves the R & D, manufacturing and sales of new energy vehicles and spare parts. It has an operating income of more than 56.58 million yuan and a loss of more than 479 million yuan in 2018. The company has launched three original eco-electric platforms, i-SP, i-MP and i-LP, and the first model, the Bojun iV6, was ordered globally at the Shanghai auto show in April.

The joint venture, on the one hand, solves the problem of production qualification in Boxun, Nanjing, on the other hand, it also digests the spare capacity of FAW Xiali, and integrates traditional car companies with new energy car companies.

However, at present, the car market is declining, many car companies have lowered their annual sales targets, and the new power of car building also continues to lose money, under the fierce competition from new energy vehicle subsidies and other car companies, the joint venture between the two sides is good, but the prospect is also unpredictable.

It is understood that the deal has been approved at the 21st meeting of the board of directors of FAW Xiali and needs to be submitted to the general meeting of shareholders of the company for consideration. FAW Xiali closed at 3.47 yuan on September 27, up 1.46%.

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