Chery, heading towards "Wudaokou"

The war is about the economy (money). Similarly, in the automobile market, although there is no flames of war, it is absolutely impossible to do without money.

Money is needed to operate, to pay wages, to buy equipment... For automobile companies with assets of hundreds of billions, once they have no money, it is equivalent to sending themselves to the edge of the cliff. In order to survive Going forward, in the special stage of market competition, automobile companies also tried their best. The former Chinese automobile brand "Yi Ge" even headed for "Wudaokou".

1Q: Why is there a mixed reform? What is the current situation of Chery Holdings?

Ten years ago, among China’s independent automobile brands, if Chery said that it was “second”, no one would dare to say that it was first. Of course, this is only limited to a long period of time 10 years ago. After the baptism of time, the number one automobile brand in China has now fallen to Geely Automobile. Chery Automobile's name has become less and less relevant, and it is more difficult to live.

Data from the China Association of Automobile Manufacturers shows that from January to November this year, Chery Automobile sold a total of 557,000 new cars, ranking fifth in Chinese brand car sales, while SAIC ranked first to fourth. The cumulative sales of the Group, Geely Automobile, Great Wall Motors and Changan Automobile reached 1.724 million, 1.234 million, 821,000 and 725,000 vehicles respectively. In comparison, Chery Automobile’s sales are far behind.

In addition to its market position not being as good as before, its financial situation is also worrying.

According to information released by the Yangtze River Equity Exchange, from 2016 to 2018, the operating income of Chery Holding Group Co., Ltd. ("Chery Holdings") was 13.389 billion yuan, 15.39 billion yuan, and 18.09 billion yuan respectively. Net profits were 221 million yuan, 573 million yuan and 1.216 billion yuan respectively.

However, in the first half of this year, Chery Holdings’ operating income was 10.422 billion yuan, and its net profit was -156 million yuan. What is noteworthy is that from 2016 to 2018, Chery Holdings’ total assets were 44.969 billion yuan, 77.624 billion yuan, and 89.78 billion yuan respectively, and its total liabilities were 32.897 billion yuan, 62.701 billion yuan, and 68.941 billion yuan.

It is not difficult to calculate from this. Its asset-liability ratios are as high as 73.15, 80.78 and 76.79 respectively. As of the first half of this year, Chery Holdings' total assets were 90.418 billion yuan, total liabilities were 68.508 billion yuan, and the asset-liability ratio was as high as 75.77.

For enterprises, the appropriate level of general asset-liability ratio is 40 to 60. Chery Holdings' asset-liability ratio has been above 70 or even above 80 since 2016. Encouraged by industrial policies to carry out mixed-ownership reform, Chery's best choice is to join a wealthy family to obtain funds and maintain operations.

2 Question: Who are the people in Wudaokou, Qingdao (what is their background)?

Public information shows that Qingdao Wudaokou New Energy Automobile Industry Fund Enterprise (Limited Partnership) (hereinafter referred to as "Qingdao Wudaokou") was established on August 22 this year, and its registered place is Qingdao Automobile Industry in Jimo District, Qingdao City Xincheng, shareholders include Wang Juan, Beijing Wudaokou Investment Fund Management Co., Ltd. (referred to as "Beijing Wudaokou"), Jinan Changying Jin'an Investment Partnership (Limited Partnership) (referred to as "Changying Jin'an"), Jinan Jiading Investment Partnership (Limited Partnership) (referred to as "Jiading Investment"). Among them, Beijing Wudaokou is the legal representative of the company.

It is worth mentioning that after Qingdao Wudaokou was established, it participated in Chery’s capital increase and share expansion in September and paid earnest money. According to media reports, all the 5 billion yuan in earnest money paid by Qingdao Wudaokou came from the Jimo District Government of Qingdao City.

In addition, Shandong state-owned enterprise Shandong Expressway Group also has a close relationship with Qingdao Wudaokou.

On November 4, the board of directors of listed company Shandong Expressway passed the proposal to subscribe for Qingdao Wudaokou. The motion shows that Changying Jinan, a subsidiary of the listed company, will invest 1 billion yuan and Jiading Investment, a subsidiary of Shandong Hi-Speed ??Investment Holding Co., Ltd., to jointly subscribe for shares of Qingdao Wudaokou.

According to disclosures, the overall size of Qingdao Wudaokou is 2.02 billion yuan, of which Changying Jinan and Jiading Investment each subscribed to invest 1 billion yuan and serve as limited partners; Wang Juan subscribed to contribute 1 million yuan. Served as a limited partner; Beijing Wudaokou subscribed to invest 19 million yuan and served as a general partner.

In other words, of the 2.02 billion yuan in Qingdao Wudaokou, Shandong Expressway accounts for 2 billion yuan. ?

3Q: What is the progress of the mixed reform between Chery and Qingdao Wudaokou? What changes are happening in the company?

On December 4, the Changjiang Equity Exchange issued an announcement showing that the capital increase and share expansion projects of Chery Holdings and Chery Automobile were successfully completed. Qingdao Wudaokou invested 7.586 billion yuan and 6.863 billion yuan, obtaining 3.099 and 18.5185 equity respectively. Became a new shareholder of Chery Holdings and Chery Automobile.

With the entry of new investors, the equity relationship of Chery Holdings has also changed.

Tianyancha shows that on December 16, Chery Holdings and Chery Co., Ltd. both experienced a number of changes, including the withdrawal of Chery Holdings’ investor Huatai Securities (Shanghai) Asset Management Co., Ltd. (“Huatai Securities”); New investor Qingdao Wudaokou has a shareholding ratio of 46.77, becoming the largest shareholder of Chery Holdings; Wuhu Construction Investment Co., Ltd. and Wuhu Ruichuang Investment Co., Ltd. hold 27.68 and 25.55 shares respectively.

The registered capital increased from the previous 4.278 billion yuan to 6.2 billion yuan. In addition, in the senior management registration information, 7 people including Fang Decai withdrew, and Jiao Shuge, Zhou Jianmin, Zheng Minghui, Yang Hong, Li Ruifeng, Yang Xiaoping and Zhao Zhenhua were added.

As for Chery Automobile, in addition to Yin Tongyue and Fang Decai, 29 of the original senior managers, including Qian Zheng and Ouyang Minggao, have withdrawn, and Zhou Jiannan, Yan Chen, Lin Longhua, Zhang Jinsong, Xia Feng, and Huang Zuchao have been added. , Zhou Jianmin, Chen Xiang, Xing Hui and Li Ruifeng; registered capital increased from 4.457 billion yuan to 5.47 billion yuan; value-added telecommunications business operations were added to the business scope; the type of market entity was changed from a joint-stock company (unlisted, state-owned holding) to other Limited by Shares (unlisted).

This means that Chery is no longer a state-owned holding company. At the same time, Zhou Jianmin, chairman of Qingdao Pudaokou, served as vice chairman of Chery Holdings and Chery Automobile.

4Q: What does the change of shareholders mean when the industrial and commercial information changes?

Changes in industrial and commercial information and adjustments to shareholders and management mean that Qingdao Wudaokou is only one step away from controlling Chery Holdings and Chery Automobile.

Zhou Jianmin once said in an interview that the total transaction size of Qingdao Wudaokou's participation in Chery's capital increase and share expansion was approximately 20 billion yuan. In addition to the transaction amount of 14.45 billion yuan announced by the Changjiang Equity Exchange, the rest was used to transfer part of the equity of existing shareholders of Chery Holdings.

According to previous announcements, Chery’s controlling shareholders Huatai Securities and Ruichuang Investment will transfer 15.78 and 4.23 shares respectively to Qingdao Wudaokou.

At present, Huatai Securities has completed the transfer change. In the future, after Ruichuang Investment completes the transfer transaction, Qingdao Wudaokou will hold 51% of Chery Holdings' equity and indirectly hold 32.4815% of Chery Automobile's equity. In addition to its 18.5185% stake in Chery Automobile, Qingdao Wudaokou will hold 51% of Chery Automobile's equity. The total equity ratio also reached 51.

By then, Qingdao Wudaokou will become the controlling shareholder of Chery Holdings and Chery Automobile. It is worth mentioning that judging from the latest management adjustments and changes, Qingdao PBC’s investment in Chery will not only be limited to financial aspects, but will also be deeply involved in internal management, daily operations and decision-making. Will Chery become the next Borgward?

5Q: Why did Qingdao Wudaokou invest heavily in entering the automobile industry?

The answer given by Zhou Jianmin, chairman and founding partner of Beijing Pudaokou, for participating in Chery’s capital increase and share expansion is: he is still optimistic about the huge growth space of China’s automobile industry, especially in new energy vehicles and internationalization. opportunity.

You can also tell from the name of Qingdao Wudaokou that its establishment purpose is mainly to carry out investment in the automotive industry (especially new energy) and its upstream and downstream industrial chain areas. By investing in the above areas, we can expand its advantageous production capacity and introduce related industries to promote the development of real industries.

On the other hand, the automobile industry is facing the integrated development and transformation of many fields and industries such as 5G, new energy, intelligence, driverless driving, and mobile travel. Discerning investors naturally do not want to miss this opportunity. Opportunities; local governments also hope to gain something from it.

If Chery is listed, then as a shareholder, Wudaokou will definitely make profits without losing money.

6Q: Why Chery?

Although China's automobile industry still has considerable room for growth, there are many Chinese independent brand car companies. The choice of Chery must be the result of Qingdao Wudaokou's careful consideration.

It is worth mentioning that there is news that Chery shareholders have a close relationship with Pudaokou. "Zhou Jianmin and Qingdao Wudaokou's participation in Chery's mixed reform has a lot to do with Jiao Zhen (also known as Jiao Shuge), a university alumnus and president of CDH Investment Consulting. Currently, Jiao Zhen and Yin Tongyue are both consultants to Shanghai Ruiye Investment. In addition, in Wudaokou, In the fund's investment in Chery Automobile, the contact person was not from PBC Fund, but Lin Longhua from Ruiye Investment. Lin Longhua had just withdrawn from Ruiye Investment in early November this year, and one of the new shareholders of Chery Automobile was Lin Longhua. . ”

After more than 20 years of development, Chery has certain competitive advantages in technology research and development, and also has some accumulation in new energy, intelligent network connection, and forward system construction. This is also facing difficulties, which cannot be compared with companies such as Zotye Automobile. What's more, Chery also owns a luxury brand joint venture called Chery Jaguar Land Rover; and its leaders and the overall image of the company are not bad.

Of course, there are companies with better prospects and stronger capabilities than Chery, but it may be difficult to obtain a controlling stake. After the capital increase is completed, Qingdao Wudaokou will also have absolute controlling rights in Chery, which is equivalent to bringing Chery under its control.

Q7: What can Chery Holdings and Chery Automobile gain after the mixed-ownership reform?

After the mixed-ownership reform, Chery will receive a large amount of funds. For Chery, whose financial status is not optimistic, this is tantamount to providing timely help, which can not only be used to repay debts, but also be used for future development. business.

You must know that whether it is technology research and development, sales management, daily operations, etc., a large amount of financial support is required.

Not only that, through the mixed-ownership reform, Chery will not only obtain development funds, but also introduce better management mechanisms and more resource support, which can effectively solve the problems faced by Chery's development.

Qingdao Wudaokou can bring more financial resources to Chery, help Chery enter the capital market, and carry out a broader strategic layout.

Q8: What problems will Chery Holdings and Chery Automobile face after the mixed-ownership reform?

With the in-depth involvement of new investors, there will be more or less friction in the company's operations. However, in the face of the great changes in the automotive industry, Chery has had to make changes.

Beijing Wudaokou, the largest shareholder behind Qingdao Wudaokou, is mainly engaged in investment and asset management, investment consulting, etc. It is a complete layman in the automobile industry. Handing Chery over to Qingdao Wudaokou for management will inevitably raise concerns about whether Chery can be led. After all, Borgward’s rapid rise and fall is a lesson learned from the past.

It is worth noting that the purpose of mixed ownership reform of state-owned enterprises is to increase the competitiveness and vitality of state-owned enterprises during the reform. The intervention of Qingdao Wudaokou only completed the "mixing" part. As for how to "change", it is the real test for Chery.

Q9: Will Chery go public after the mixed-ownership reform?

With the involvement of Qingdao Wudaokou, Chery Holdings may accelerate the overall IPO pace.

According to the latest management adjustments and changes, Zhou Jiannan, the former executive president of Everbright Securities, will serve as a director of Chery Holdings.

It is understood that Zhou Jiannan has more than 20 years of experience in finance and securities, and has worked for the Shenzhen Stock Exchange, the Listed Company Supervision Department of the China Securities Regulatory Commission, Dacheng Fund, etc.

With his help, Chery Holdings will be able to achieve its overall IPO goal more easily.

“Chery should have gone public 10 years ago, but missed the opportunity. This aspect is Chery’s shortcomings, and we are the advantage.” Judging from Zhou Jianmin’s attitude in the media interview, the promotion of Chery Holdings Overall listing is indeed one of the goals of new investors.

10Q: Can Chery succeed in the automobile market after the mixed-ownership reform?

For Chery, if it does not carry out mixed-ownership reform, it may still stand still, but with financial support and the injection of fresh blood, it has the opportunity to create unlimited possibilities.

From the current perspective, the new investors have full confidence in Chery. "Chery will increase its sales from 750,000 vehicles and 100 billion yuan in 2018 to 2 million vehicles and 250 billion yuan respectively in 2025, returning to the forefront of independent brands." Zhou Jianmin said.

This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.