FAW Car (000800): A Great Change in the FAW System in Ten Years
The company announced in the evening that it planned to purchase the equity of FAW Jiefang held by FAW shares and raise funds by means of asset replacement, issue of shares to purchase assets, etc. It is expected to constitute a major asset reorganization of the company.
In our annual strategy, we have repeatedly proposed that FAW reform is one of the main lines of asset integration for the automotive industry in 2019, and combined with Xiali to sell all Toyota shares to FAW, the reform is gradually clear.
We are optimistic about FAW’s mainline reform opportunities and maintain the company’s “prudent recommendation-A” rating.
Issuance of shares, asset replacement and purchase of FAW Jiefang’s equity, FAW Car will be a clear trend as a vehicle platform.
Timeline one: FAW Xiali will transfer its FAW Toyota shares to FAW shares (expected) in two separate listings.
FAW Xiali was priced at 25 in August 2016.
600 million transfer of 15% of FAW Toyota shares to the controlling shareholder FAW shares at a price of 29 on November 28, 2018.
200 million transferred the remaining 15% equity, after which FAW Xiali no longer holds Toyota shares.
Timeline 2: FAW Car purchases all shares of FAW Jiefang.
FAW Car intends to purchase equity of FAW Jiefang held by FAW shares and raise supporting funds by means of asset replacement, issue of shares to purchase assets, etc.
Abstract: FAW’s overall listing lasted for ten years before and after its listing, involving a huge volume, which is currently unknown.
According to the strategic development of developing country groups, FAW shares as a whole listed assets may be controversial.
For the two listed entities FAW Cars involved in competition in the same industry, FAW Xiali is called Zhongzhong, and FAW Xiali’s core assets are transformed into major shareholders FAW Shares, meanwhile FAW Jiefang’s core 武汉夜网论坛 assets FAW Jiefang are injected into FAW Cars.The author thinks that taking FAW Car as the main body to realize the listing error of the core vehicle assets of FAW Co., Ltd.
Asset restructuring in the automotive industry, represented by FAW reforms, is one of the main lines of investment for the automotive industry in 2019.
1) The time window for FAW to resolve competition in the industry is approaching.
In 2016, FAW hopes to postpone a three-year delay to solve the problem of inter-bank competition (later rejected by the shareholders’ meeting), and the time window for landing will be in 2019; 2) Vehicle assets are merged and injected into the body of the automobile.
FAW Group has concentrated its entire vehicle assets on FAW shares and is expected to become the core asset of the overall listing.
Recently, 30%天津夜网 of FAW Toyota’s assets held by FAW Xiali have been transferred to FAW shares twice.
3) Full decentralization of component assets, reform, and marketization.
In June of 2018, Fawer shares, Changchun Yidong Assets changed from FAW Group to FAW equity investment. In August, FAW Fuwei launched a double hundred reform.