On the evening of March 1, Jiangsu Yueda Investment Co.Ltd(600805) issued the announcement on the resolution of the 5th meeting of the 11th board of directors, in which the proposal on abandoning participation in the capital increase and related party transactions of Dongfeng Yueda Kia Automobile Co., Ltd. attracted more attention from the market.
The announcement shows that Dongfeng Yueda Kia Automobile Co., Ltd. (hereinafter referred to as “Dyk company”) with a 25% stake in the company plans to implement a capital increase of US $600 million. Due to the investment capital demand of the company’s new projects, it is planned to give up participating in the capital increase of Dyk company, and the abandoned part is funded by Jiangsu Yueda Automobile Group Co., Ltd. Since Yueda automobile group is an affiliated legal person of the company, the company gives up participating in the capital increase of Dyk company this time, which constitutes a connected transaction.
Jiangsu Yueda Investment Co.Ltd(600805) said that after evaluation, the value of 100% equity of Dyk company was 771 million yuan, and the scale of this capital increase was 600 million US dollars. After the capital increase, the proportion of equity held by the company in Dyk company decreased from 25% to 4.2%. After the capital increase, the scope of the company’s consolidated statements has not changed, which will not have an adverse impact on the company’s financial status, operating results, future main business and sustainable operation ability.
Jiangsu Yueda Investment Co.Ltd(600805) why give up Dyk’s capital increase right? The reporter noted that according to the 2021 performance forecast released by the company, Dyk company continued to suffer losses in 2021 due to factors such as the decline of core production and sales and the rise in the price of precious metals, which is expected to affect the company’s net profit attributable to the parent company by about -531 million yuan. In terms of performance, Dyk’s continuous loss has a great impact on Jiangsu Yueda Investment Co.Ltd(600805) ‘s performance.
In addition, according to the statistics of the passenger Federation, by the end of 2021, the total capacity of passenger cars in China was 40.89 million, and the capacity utilization rate was 52.47%. China’s passenger car industry is in the range of overcapacity. With the maturity of automobile consumption, the market head effect is becoming more and more obvious, and the competition in the automobile market is bound to gradually intensify.
In the face of the increasing competitive pressure in the automotive industry, Jiangsu Yueda Investment Co.Ltd(600805) said in the announcement: “the vehicle manufacturing business will no longer be an important part of the company’s business structure. In the future, the company will actively look for new investment projects to improve the company’s profitability.”
