On December 13, Hong Kong-listed Geely Holdings issued an announcement that the company intends to jointly invest in the establishment of a joint venture with Lifan Technology, with a registered capital of RMB 600 million for the target company, and Geely Holdings and Lifan Technology have each contributed 300 million yuan, with a shareholding ratio of 50%. In addition, upon mutual agreement, the two sides may designate a separate entity to make the capital contribution. According to the announcement, the business scope of the target company is the design, research and development and sales of the whole vehicle (including accessories, parts processing equipment, automotive decoration); the import and export of goods, the import and export of agents, the import and export of technology; software development; technology development, technical services, technical advice, and technology transfer.
According to the announcement, Lifan Technology is owned by Geely Technology for about 28.98%, while Li Shufu holds about 91% of the equity of Geely Technology. Mr. Li is an executive Director and controlling shareholder and holds approximately 41.16% of the total issued share capital of the Company as at the date of this announcement. Therefore, according to the Listing Rules, Lifan Technology is not a contact person of Shufu Li and is not a related person of the Company. Therefore, pursuant to Chapter 14A of the Listing Rules, the formation of a joint venture does not constitute a related party transaction of the Company. In terms of management power, the general manager, deputy general manager, financial leader and other senior management personnel of the target company are nominated by Lifan Technology and hired by the board of directors of the target company.
Previously, under the influence of market competition and the company's own operating problems, Lifan was deeply involved in a debt crisis. On July 10, 2020, Lifan issued an announcement that 10 wholly-owned subsidiaries were applied to the court for judicial reorganization due to the inability to pay off their debts as they fell due, and the company would be declared bankrupt due to the failure of the reorganization. Subsequently, Geely participated in the restructuring of Lifan with the help of Chongqing Manjianghong Enterprise Management Co., Ltd.
In December 2020, the controlling shareholder of Lifan was changed to Chongqing Manjianghong Equity Investment Fund Partnership (Limited Partnership), and Chongqing Manjianghong Enterprise Management Co., Ltd. will become the actual controller of the company. In January this year, Lifan Technology (Group) Co., Ltd. was officially listed, with a new leadership team, a new company name, a new corporate LOGO, and new products, and Lifan was indirectly controlled by Geely.
After completing the reorganization, Lifan quickly "took off the star and took off the hat". On March 2, in view of the fact that the situation involving the delisting risk warning has been eliminated after the implementation of the company's restructuring plan, the SSE agreed to revoke the delisting risk warning and implement other risk warnings, and the abbreviation of the securities was changed to "ST Lifan". On April 22, the Shanghai Stock Exchange agreed to revoke the application for other risk warnings of the stock, and the abbreviation of the company's securities was changed from "ST Lifan" to "Lifan Shares", and then "Lifan Shares" was replaced by "Lifan Technology".
In May this year, Lifan, which completed the restructuring, restarted its automotive business. Lifan Technology released the news that the first power-changing model, Lifan 80V, was mass-produced off the production line in Liangjiang New Area, marking that Lifan has stepped out of the "ward", returned to normal life and entered a new stage of development.
It is understood that Lifan 80V is the standard replacement model of Maple Leaf 80V, and Maple Leaf 80V is the second mass production model of Maple Leaf Automobile, based on Geely's GBRC power exchange platform, which is Geely's first electric vehicle to use power exchange. According to the data, Maple Leaf Automobile is an automobile brand under Maple Leaf Automobile Technology Group Co., Ltd., and Maple Automobile Technology Group Co., Ltd. is a wholly-owned holding company of Geely Technology Group Co., Ltd., and has currently laid out two models, Maple Leaf 30X and Maple Leaf 80V.
According to Lifan Technology, in addition to the Lifan 80V, this year will also launch 60S and 80X two power replacement models, of which 60S will face the taxi market to replace the car, 80X is a large replacement SUV, mainly for official car customers. In addition, Lifan Technology will also launch a number of new models to meet market demand.
In recent years, the concentration of the market is constantly improving, and China's independent weak brands are accelerating their elimination, including BAIC Yinxiang, Cheetah Automobile, Zotye, etc. are hovering on the edge of the market, and whether these companies can get out of the trough has also become one of the concerns of the market. From the current point of view, after Geely participated in the reorganization, Lifan has indeed walked out of the "ward". According to the financial report disclosed by Lifan Technology, the first three quarters achieved revenue of 2.56 billion yuan, net profit of 0.50 billion yuan, net profit after deduction of 723 million yuan, while the full year of 2020 deducted non-net loss of 6.334 billion yuan, in 2019 deducted non-net loss of 4.395 billion yuan. As for what kind of spark will be sparked in the passenger car market after the cooperation between the two companies, it is worth looking forward to!
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