An announcement by the “fruit chain” giant Luxshare Precision Industry Co.Ltd(002475) may put an end to the “grudge” between Chery and Qingdao Wudaokou, which has lasted for more than two years.
On February 11, Luxshare Precision Industry Co.Ltd(002475) guanxuan will officially enter the vehicle manufacturing industry together with Chery new energy. At the same time, its controlling shareholder Lixun Co., Ltd. will spend 10.054 billion yuan to acquire 19.88% equity of Chery holding, 7.87% equity of Chery Automobile and 6.24% equity of Chery new energy from Qingdao Wudaokou, the largest shareholder of Chery holding.
The first financial reporter learned that previously, Qingdao Wudaokou held 46.77% equity of Chery holdings. After the completion of this transaction, Qingdao Wudaokou’s holding equity of Chery holdings will be reduced to 26.89%, which is lower than the 27.68% holding proportion of Wuhu Construction Investment Co., Ltd. (wholly owned by Wuhu SASAC). It is the second largest shareholder and Lixun Co., Ltd. will rank fourth.
After all, Chery’s mixed reform to transfer its controlling shareholder status is still a tail and tail.
mixed road reconstruction with heavy “fog”
Chery’s fate with Qingdao Wudaokou has to start with the capital and share increase project launched by the former in September 2018.
At that time, Chery holdings and Chery Automobile issued the notice of capital increase and share expansion respectively in the Changjiang property exchange. The two major projects were officially listed at the transaction reserve price of 7.911 billion yuan and 8.333 billion yuan respectively, with a total of 16.244 billion yuan.
However, one year later, the project still had no results, but Chery restarted the mixed reform in September 2019 and reduced the transaction price by 1.9 billion yuan.
This time Chery and others came to the “White Knight” Wudaokou, Qingdao. In December 2019, the latter subscribed for 30.99% shares of Chery holding with RMB 7.586 billion and 18.52% shares of Chery Automobile with RMB 6.863 billion. In addition, Qingdao Wudaokou also transferred 19.56% shares of Chery holdings from Huatai asset management and Wuhu RuiChuang. The total amount mentioned above is 19.601 billion yuan.
So far, Qingdao Wudaokou holds 51% of Chery holdings and 35.58% of Chery Automobile respectively, becoming the largest shareholder of the two companies and replacing Wuhu SASAC as the actual controller of Chery holdings.
As for why Qingdao Wudaokou was chosen, Chery insiders once told reporters that Qingdao Wudaokou was “sincere” and was willing to purchase at a premium of 100 million yuan on the one hand; On the other hand, Qingdao Wudaokou also promised to “help not make trouble”.
The above-mentioned people also pointed out that Chery’s introduction of Qingdao Wudaokou is actually equivalent to obtaining the “endorsement” of Qingdao Jimo District, because Qingdao Jimo district is an important cornerstone investor of Qingdao Wudaokou.
On December 20, 2019, Jimo District of Qingdao signed a strategic cooperation agreement with Chery holding group in Jinan, and Chery new energy vehicle project was officially settled in Jimo district.
However, the subsequent development is quite different from Chery’s expectation.
In 2020, it was reported from many sources that the follow-up funds of Qingdao Wudaokou could not be paid. In this mixed reform, nearly 10 billion funds of Qingdao Wudaokou did not arrive.
Although Chery and Qingdao Wudaokou both refuted the rumors, some “clues” still exposed the obstruction of the mixed reform.
On the one hand, according to tianyancha information, Qingdao Wudaokou has never directly held the equity of Chery automobile. In July 2021, with Chery holding withdrawing its stake in Chery Automobile, its idea of indirectly holding Chery Automobile through Chery holding also failed. Moreover, Qingdao Wudaokou holds less than 51% of Chery’s controlling stake, but 46.77%.
In this regard, Cui Dongshu, Secretary General of the all China Passenger Transport Federation, told the media that this should be because the mixed reform of Qingdao Wudaokou and Chery has not been completely completed.
In addition, Qingdao Wudaokou executives who originally settled in Chery department also began to withdraw gradually last year.
Tianyancha information shows that in August 2021, Zhou Jianmin, the actual controller behind Qingdao Wudaokou, withdrew from Chery, and Zhou Jiannan brought by him withdrew together. In December 2021, Zhao Zhenhua, another natural person shareholder behind Qingdao Wudaokou, also withdrew from Chery holdings. Zhou Jiannan has also been widely recognized in the industry as a key figure who will lead Chery in capital operation and overall listing.
Chery new energy’s project in Jimo District, Qingdao has not heard any new news for a long time. In February last year, Chery Qingdao factory announced the commencement of construction, with a total investment of 23 billion yuan. It is planned to offline the whole vehicle in December 2022. But at present, the reporter can’t find the relevant recruitment information from the Internet, and the latest company phone announced by Chery (Qingdao) Operation Co., Ltd. has also been shut down.
Can the “fruit chain” giant bring new opportunities?
This Luxshare Precision Industry Co.Ltd(002475) shareholding will undoubtedly reveal Qingdao Wudaokou’s “retreat” in the Chery mixed reform.
Qingdao Wudaokou retreated to the “second tier” by transferring 19.88% equity of Chery holdings, 7.87% equity of Chery shares and 6.24% equity of Chery new energy to Luxshare Precision Industry Co.Ltd(002475) for a consideration of 10.054 billion yuan.
This also means that in the mixed reform of Chery, which lasted more than two years, the control of Chery Department returned to Wuhu SASAC from Qingdao Jimo district government.
As for whether this will affect the previous factory construction of Chery new energy in Qingdao, as of press time, Chery holdings did not reply to the first financial reporter.
The insiders were not surprised that Luxshare Precision Industry Co.Ltd(002475) joined the Chery department.
Lin Zhi, chief analyst of wit display, told reporters, “The smart phone market has been saturated, and mobile phone OEM enterprises are looking for new opportunities. Automobile electrification will bring new possibilities to OEM factories. Therefore, almost all (Apple) OEM factories are laying out electric vehicles. For example, Foxconn bet on automobile OEM, Wingtech Technology Co.Ltd(600745) enter the automotive semiconductor industry, Luxshare Precision Industry Co.Ltd(002475) get involved in the automotive business is also natural.”
Luxshare Precision Industry Co.Ltd(002475) pointed out in the announcement that the company and Chery new energy plan to jointly establish a joint venture to specialize in the R & D and manufacturing of new energy vehicles, and provide cutting-edge R & D and design, mass production platform and access to the sea for Luxshare Precision Industry Co.Ltd(002475) auto core parts business. The goal is to achieve the company’s medium and long-term goal of becoming a leading manufacturer of auto parts tier 1.
As a “fruit chain” giant, Luxshare Precision Industry Co.Ltd(002475) , entering the bureau to build cars has also aroused more conjectures.
Lin Zhi also pointed out that, like Foxconn‘s idea, Luxshare Precision Industry Co.Ltd(002475) also hopes to get Apple’s auto orders. Now that Apple has not finalized the auto OEM, Luxshare Precision Industry Co.Ltd(002475) may enter Apple’s auto supply chain and become an apple auto OEM.
Although it is not known whether it will eventually become Apple’s auto supply chain, some insiders pointed out that Chery has obtained a new injection of more than 10 billion yuan through this cooperation, which is good news for Chery. After all, Chery is facing financial pressure.
Previously, Chery disclosed its financial position in the announcement of capital and share increase. As of June 30, 2019, Chery holdings had a net profit of – 155 million yuan, total assets of 90.417 billion yuan and total liabilities of 68.508 billion yuan; Chery’s net profit was -1.374 billion yuan, its total assets were 83.082 billion yuan and its total liabilities were 62.293 billion yuan.
