After four capital increases, Daimler transferred 40% of Denza's equity to BYD

21st Century Business Herald reporter Du Qiaomei Beijing report On December 24, Daimler Greater China Investment Co., Ltd. (hereinafter referred to as "Daimler") and Chinese partner BYD Automobile Industry Co., Ltd. (hereinafter referred to as "BYD") signed an equity transfer agreement on adjusting the structure of its joint venture shenzhen Denza New Energy Automobile Co., Ltd. (hereinafter referred to as "Denza") to transfer its 40% equity interest in Denza to BYD, after the completion of the transfer, Daimler and BYD will each hold 10% of Denza. and 90% stake.

It is understood that the equity transfer agreement will be completed in mid-2022 after the approval of the regulatory authorities.

According to the data, Denza was established on February 16, 2011, with a registered capital of 5.76 billion yuan, jointly funded by BYD Automobile Industry and Daimler in a 50:50 equity structure. The main business includes the design and development of passenger cars, electric vehicles, automotive electric drivetrains, automotive powertrains and passenger car parts with less than 9 seats.

As the first new energy vehicle technology joint venture in China, Denza has been highly anticipated by everyone because of the strong background of both shareholders. Wang Chuanfu once said: "As a child of Daimler and BYD, Denza is a brand born on the shoulders of giants. ”

However, since its inception, Denza's development in China has not been ideal.

According to the data, in 2012, the DENZA Denza brand was officially released. It is reported that Denza is positioned to create a domestic high-end electric vehicle, by BYD to provide it with three electric technology, Daimler is responsible for vehicle manufacturing; in 2014, the first mass production car dextile 300 developed on the basis of the Mercedes-Benz B200 platform was put on the market, followed by the replacement models Denza 400 and Denza 500 successively launched; in November 2019, Denza was officially incorporated into the Mercedes-Benz sales system, and the Denza X was officially listed after the replacement. However, at present, denza only has two models on sale: denza X pure electric SUV and plug-in hybrid SUV.

The data shows that denza car sales in 2015 were 2800 units, in 2016 sales fell to 2287 units, and in 2017 cumulative sales were 4713 vehicles. After 2018, with the rise of new car-making forces and the gradual development of the new energy automobile industry, Denza's sales have become more and more sluggish, with sales of 1974 and 2089 units in 2018 and 2019, respectively.

In 2019, Daimler wants to take advantage of Mercedes-Benz's sales channels in China to open up the market for Denza Automobile. However, after two years, Mercedes-Benz's strong channel network has not revitalized the momentum, and although sales in 2020 have rebounded, they are only 4175 vehicles.

At the same time, in the past two years, with the gradual enrichment of BYD's pure electric vehicle camp, Mercedes-Benz pure electric models EQC, EQA, EQB have been sold in China, and Denza's position has become more and more embarrassing.

As of December 31, 2020, Denza New Energy had total assets of RMB2.39 billion and net assets of RMB490 million, compared with its main revenue of RMB1.13 billion and net profit of RMB -420 million for the period from January to December 2020.

As of November 30, 2021, Denza New Energy had total assets of RMB2.11 billion and net assets of RMB340 million, and from January to November 2021, Denza New Energy's operating income was RMB1.15 billion and net profit was RMB -150 million.

In the face of "dismal" sales and net profit losses, Daimler chose to "withdraw", and BYD, which will soon become the controlling shareholder, will determine the direction of future deforestation.

It is worth noting that just before the announcement of the equity transfer, Daimler and BYD each intend to increase the capital of Denza by 1 billion yuan.

After the A-share market on December 24, BYD Co., Ltd. (002594. SZ) issued the "Announcement on Capital Increase and Related Party Transactions of Participating Companies", saying that the 17th meeting of the 7th Board of Directors held by the Company on December 24, 2021 deliberated and passed the "Proposal on Capital Increase and Related Party Transactions of Participating Companies", and BYD Automobile Industry Co., Ltd. and Daimler, the Company's holding subsidiaries, intend to increase the capital of Denza by RMB1 billion in monetary terms in proportion to their shareholdings. After the completion of the capital increase of shareholders of both parties, BYD and Daimler will continue to hold 50% of the equity of Denza New Energy respectively.

It is worth noting that this is also the fourth capital increase of Denza since its establishment. In May 2017, Denza Automobile received a capital increase of 1 billion yuan from BYD and Daimler in cash; in May 2018, BYD and Daimler increased their capital by 800 million yuan to Denza; on February 28 this year, the two sides increased their capital by 400 million yuan to Denza Automobile.

"The capital increase is mainly used for the daily operating funds of Denza New Energy, which is conducive to promoting the sustainable development of Denza's new energy vehicle business and providing financial support for Denza New Energy to create better and more competitive products." In the future, both shareholders will strategically plan to accelerate the future development of the Denza brand in the fast-growing Chinese new energy vehicle market and tap the growth opportunities of the DENZA brand. BYD pointed out in the announcement.

It is understood that the Denza brand plans to launch new models in 2022, but for how to lay out the future channels and whether they are still sold in the Mercedes-Benz channel, the shareholders have not yet given a clear response.