"FAW" overall market expected to add momentum

On Monday, both FAW Xiali (000927) and FAW Sihuan (600742) under the FAW Group closed daily, and the FAW Car (000800) also gained 8.92%. It should be said that the change in the stock price of related listed companies of FAW Group is related to its overall listing expectation. In fact, as early as the beginning of April this year, there was media coverage of the news, saying that the preliminary plan for the overall listing of FAW Group was based on FAW Car as a platform for listed companies to acquire part of the assets of the group through a private placement, most likely The acquisition of FAW-Volkswagen, and that FAW Group is preparing an overall listing plan. In this regard, FAW Car had issued an announcement to clarify, bluntly as of now, FAW Group did not determine the specific plan for the overall listing, but also did not determine the specific scope of the reorganization.

The market's overall listing prospects for FAW are quite strong. The reasons are probably reflected in the following aspects:

First, the state encourages the listing of large-scale central enterprises as a whole and has launched the “Guiding Opinions on Promoting the Adjustment of State-owned Capital and the Restructuring of State-Owned Enterprises.” Among the three major automobile groups, Shanghai Automotive Group has already achieved overall listing through Shanghai Automotive, and Dongfeng Motor has also listed through Hong Kong. To achieve the purpose of the overall listing. The overall listing of SAIC Motors is a typical example of injecting high quality assets into listed companies through asset injections and promoting the rapid development of listed companies. In fact, through the overall listing and asset injection, not only its industrial chain is more perfect, but also the listed company's position in the group is further strengthened, and Shanghai Auto's share price performance is far stronger than that of FAW Car.

Second, the current industrial policy orientation and capital market environment are conducive to the overall listing of FAW Cars in the A-share market. At present, the valuation level of the A-share market has increased, and the overall listing of FAW Car in the A-share market is more rational. Although overseas listing can increase the visibility of the company, due to the fact that foreign investors may not understand or have preconceptions about the Chinese auto companies, generally the overall overseas listing may suffer from low pricing, so FAW passes domestic listings. Subsidiaries are more likely to inject assets and increase issuance to achieve overall listing.

Third, current corporate executives have expressed the feasibility of the overall listing. FAW Group leaders delayed the interview during the two sessions in March this year and said that it is impossible to not consider the overall listing, but there is no specific timetable, and once the FAW Group is listed as a whole , Will bring greater opportunities to its listed companies. It is precisely because of the above expectations that the listed companies of FAW Group perform well.

If the overall listing once in line, the four major companies listed under the FAW Group, why heavy to become the focus of market speculation. Based on the institutional arrangement of the current domestic regulatory authorities for the overall listing of the parent company and the listed subsidiary companies, it is difficult for the FAW Group, which is listed on the domestic market, to bypass the FAW Car. FAW Car's many years of high-level product development and manufacturing experience, good product quality and excellent industrial workers, and FAW Group's core position are the first choice of FAW Group's overall listing. At present, the Pentium and the HQ3 with independent intellectual property rights of FAW Group are in the FAW Car. Moreover, FAW Cars will develop its own brand products as the main target, adopt the Red Flag brand to return to high-end, develop a number of independent brand series, and will cover A, B, C, and E-class vehicles for future development strategies. According to the plan, in 2010, it will achieve the production and sales target of 200,000 self-owned brands and 100,000 joint venture brands. The Pentium, developed on the Mazda6 platform, and HQ3, the product developed on the Majest platform, are the initial implementation of this strategy.

If FAW Group is listed by FAW Car (000800) as a whole, FAW Sihuan (600742) and FAW Xiali (000927) will face the possibility of repurchasing or buying shells, while Haima Shares (000572) will not obtain a controlling stake in the future. There is no conclusive decision to go. After the Hainan government entrusted 1% equity to Haima shares management, FAW Group has actually lost control of Haima Motors. Therefore, in the future, it is proposed to actively pay attention to the arbitrage opportunities brought by the overall listing of FAW Group to related listed companies.

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