Chery JAC reorganization alliance is more likely

After a day of trading suspension, on June 2nd, JAC Motors issued a clarification announcement. The announcement indicated that the company had no plans for the reorganization of Chery Automobile as stated in the report. However, given that the company and its controlling shareholders are state-owned holding companies, it is currently unable to do so. Predict whether relevant reorganization will occur in the next three months.

In this regard, Guoxin Junan Securities Research Institute researcher Zhang Xin analysis: This is actually a clear and unclear announcement, from the content to understand, does not rule out the possibility of reorganization, but when reorganization, in what way reorganization, not by JAC decided for himself.

In an interview with reporters, Jiang Jianghuai’s director-in-chief Wang Min also frankly stated: “It can be imagined that the government has plans for this,” but he also stated that there is no timetable at present.

“We are communicating with the government almost every day.” According to an informed source of Jianghuai Automobile, government departments are planning this matter.

The government department referred to by the informed person refers to the Anhui Automobile Industry Leading Group (hereinafter referred to as the “Leading Group”). The leading group was established in July last year to promote the restructuring of the automobile industry in Anhui Province with the strategic layout of Daan Steam. On May 12, the leading group drafted and announced the "Automobile Industry Adjustment and Revitalization Plan of Anhui Province" (hereinafter referred to as "Planning") - pushing for Chery, Jiangqi, Hualing, Changhe, Yangzi, Quanchai and other auto companies. The market principle is to carry out joint restructuring in the province and strive to form an auto enterprise group with a capacity of more than one million cars. In addition, it will also build 2-4 auto parts production enterprise groups with advanced domestic level and 5-7 auto industrial clusters. The issuance of the "Plan" was considered the first step in the integration of the automobile industry in Anhui Province. According to the timetable set out in the "Planning", the specific implementation plan will be announced before the end of the year.

“The reorganization of Jianghuai Chery began in 2002 and the direction is unchanged,” said Liang Huaping, president of the Anhui Automobile Industry Association.

"The problem is that Chery is in Penghu, and Jianghuai is in Hefei." From this point of view, it is more difficult to integrate. An analyst who does not want to disclose believes that if it is the opposite, Chery is a Hefei company, and the difficulty of integration is much smaller. Although Chery’s sales revenue is higher than that of JAC, the profitability of the two companies is comparable. In this regard, from the point of view of integration, the alliance is more likely.

On June 2, Jianghuai Automobile Co., Ltd. gapped higher and opened, with the highest rate of increase reaching 8.72%, and rose 4.27% at the close. The reorganization of Daan Automobile gave the imagination of many capital markets. In fact, from the beginning of February, Jianghuai Automobile continued to have financial intervention, and the stock price also rose from 3 yuan to more than 6 yuan. For the market, Zhang Xin believes that: There is still a lot of uncertainty. Although there are opportunities, there are also significant risks. The key lies in the specific restructuring plan."

If “Daan Auto” takes Jianghuai as its main body, and the quality assets of automobile companies in Anhui, including Chery, are fully injected, Jianghuai Automobile will become an automobile enterprise that integrates the business of cars and trucks and lays the foundation for its own branded leading enterprises. The status, just as SAIC after the integration of SAIC Motor, has become the largest domestic automobile company that integrates passenger cars and commercial vehicles. No doubt the outlook is worth looking forward to.

But the problem is that for a long time Chery has been seeking an independent listing and the related preparation industry has basically been improved. Earlier, Yin Tongyue interviewed this reporter clearly stated that: Chery’s listing grounding was mainly due to the impact of the financial crisis on the domestic market including the international market since the second half of 2007. However, Yin Tongyue also said that once the stock market recovery, Chery will Listing, which means that Chery's assets are very unlikely to inject into JAC.

"If you only set up 'Daan Steam' for the purpose of resource sharing, if the company's subsidiaries do not substantively integrate, it will be the same as the original "Auto Industry Corporation" and "Mechanical Industry Bureau". It is difficult for auto companies in Anhui Province to improve through this alliance. Strength: "An authoritative source believes that the final proposal is likely to be held by companies under the "Daan Steam" mutual holdings, and even be mutual executives. For example, Jianghuai holds shares in Chery Commercial Vehicle Co., Ltd. Zuo Yanan also serves as Chery's commercial vehicle. Management; while Chery holds the shares of Jianghuai passenger vehicle, Yin Tongyue also serves as the executive of the Jianghuai passenger vehicle, which has also improved the existing business of Jianghuai Automobile.