Round-robin speculation, constant game.
Recently, some media reported that the negotiations between Mercedes-Benz and BAIC Group on the former's proposed increase in the share ratio of Beijing Benz have been basically completed, and it is planned to be announced to the public within this year.
In this regard, Mercedes-Benz China and BAIC Group both said that they had not heard any news in this regard.
Share ratio of the past
This is not the first rumor.
As early as 2018, the Chinese government relaxed the restrictions on the proportion of foreign investment in China in the automotive industry, and the top three German companies have opened their hands and feet to start sniping. Among them, BMW took the lead, increasing its shareholding in BMW Brilliance to 75%, becoming the first beneficiary after the liberalization of the joint venture share ratio.
Two months later, Daimler (before Mercedes-Benz changed its name) was eager to make a fuss, and the news of discussing the stock ratio with BAIC was even once defined by the outside world as the "second bullet" of the automotive circle joint venture stock ratio.
However, in terms of practical action, the game between shareholders is unprecedented: from the willingness to increase the shareholding ratio to at least 65% in 2018 to 75% in 2019, Mercedes-Benz, which is full of ambitions for the stock ratio, has never ended. During this period, Volkswagen has taken the lead in raising its share ratio in JAC Volkswagen to 75%.
In the nearly 20 years since the marriage, BAIC and Mercedes-Benz have been in a state of "mutual coveting".
According to the combing data of The Road, in 2005, the two sides formally established a joint venture Beijing Benz. In the current shareholding structure, BAIC Group holds 51% of the shares and Mercedes-Benz holds 49% of the shares. However, unlike BMW Brilliance, BAIC has been strengthening its control over the joint venture through cross-shareholding with Mercedes-Benz.
In 2013, Mercedes-Benz acquired a stake in BAIC, a Hong Kong-listed company, and became a member of the board of directors of BAIC. Six years later (2019), BAIC Group bought a 5% stake in Mercedes-Benz for 20 billion yuan, becoming its third largest shareholder.
It is worth mentioning that during the period, Geely Group acquired 9.69% of the shares of Mercedes-Benz through secondary market operations in 2018 through the secondary market operation, shocking the industry and becoming its largest single shareholder.
However, it was not until two years later (2021) that BAIC Group declared on its official website: "In order to strengthen the long-term strategic cooperation between the two sides, it has held 9.98% of daimler agka in 2019 by continuing to invest." At this point, BAIC Group has become the largest shareholder of Mercedes-Benz.
For this sudden "old news", the outside world speculates that BAIC is actually paving the way for Mercedes-Benz to increase its holdings in Beijing Benz. Some industry insiders analyzed that "in view of China's cancellation of the foreign ownership limit on passenger cars in 2022, Mercedes-Benz's ambitions are well known, and while it is trying to win the majority of BAIC Benz shares, BAIC is also actively increasing its stake in this German car company, which is a risk hedge." ”
Each with his own thoughts
In fact, behind the years of mutual coveting, the two sides have only one goal: to own the "cash cow" of Beijing Benz.
How important is Beijing Benz to BAIC Group? The answer has long been written in the financial reports over the years.
Earlier, Robin Zhu, an analyst at Wall Street investment bank Sanford Bernstein, said in a report: "For many years, the profit margins of Beijing Benz have been ridiculously high, which has covered up the flaws of BAIC. ”
Today, this phenomenon continues. According to the announcement released on March 11, BAIC co., Ltd. had revenue of 22.809 billion euros in 2021, of which the revenue of Beijing Benz reached 21.288 billion euros, accounting for 93.33%. In terms of profits, BAIC Co., Ltd. generated a profit after tax of 1.868 billion euros in 2021, while Beijing Benz's profit after tax for the whole year amounted to 3.205 billion euros.
This also means that if the profits of Beijing Benz are removed, the losses of other businesses of Beijing Automobile are 1.337 billion yuan.
In recent years, in the territory of BAIC Group, in addition to Beijing Benz, other enterprises such as Beijing Autonomy, BAIC New Energy, and Beijing Hyundai have invariably become "drag oil bottles". Taking Beijing Hyundai as an example, Beijing Hyundai's sales volume in 2021 was 382,000 vehicles, a year-on-year decline for five consecutive years, and the annual completion rate of 560,000 vehicles set at the beginning of the year was only 68%, and the net loss after tax in that year was 4.995 billion yuan.
In addition, the situation of Beiqi Blue Valley, a new energy vehicle division under BAIC Motor, is also not optimistic, and Beiqi Blue Valley expects a net loss attributable to shareholders of listed companies in 2021 to be 4.8-5.3 billion yuan, due to the company's production and sales not meeting expectations, the increase in marketing investment of the ARCFOX Jihu brand, and the increase in research and development expenses.
In the face of such a situation, once BAIC loses the controlling interest of Beijing Benz, it means that the revenue and profit of Beijing Benz cannot be included in baic's statements. In this regard, many speculations in the market believe that BAIC will not only slide out of the world's top 500, but also may lead to a sharp decline in the stock prices of its listed companies.
For BAIC, Beijing Benz is a profit cow and a pawn, and for Mercedes-Benz, it is also an important channel in the global market.
Last year, the pattern of luxury brand BBA changed, and Mercedes-Benz, which ranked first in the 4-year list, gave way to BMW.
According to the data, in the global market in 2021, BMW ranked first, with global sales of 2213795 vehicles, a record high, an increase of 9.1% year-on-year; Mercedes-Benz's global sales of 2093476 vehicles, down 5% year-on-year. In the domestic market, Mercedes-Benz also lost to BMW with a gap of nearly 90,000 vehicles.
However, in addition to the failure of traditional fuel vehicles, the obscurity in the electric vehicle market also makes Mercedes-Benz quite troubled.
According to the data of the Association, in 2021, Beijing Benz new energy models sold 14,484 units, accounting for 5.3% of Mercedes-Benz's new energy model sales. In July last year, Mercedes-Benz announced that by 2025, the sales volume of new energy models will reach 50%, and it is inevitable to strive for more chinese new energy markets.
"China is the world's largest new energy vehicle market. This market policy and regulation, the market, customer acceptance and demand are very conducive to the development of electric vehicles. Mercedes-Benz has expected that "the Chinese market and the R&D centers set up in China will make a greater contribution to our future electrification development." ”
In this regard, some insiders pointed out that "if you can increase your holdings in Beijing Benz, on the one hand, you can open your hands and feet to further land a new strategy in China, on the other hand, Beijing Benz as a strong cash cow, increase the equity ratio can share more profits to support the strategic landing."
From the bundled cooperation in the past to the current interest game, it is "each has what it needs".
And between BAIC and Mercedes-Benz, Beijing Benz is not the final answer. "Increasing the stake may be able to solve some of the capital problems in the short term, but how to find its own profit growth point and keep up with the pace of transformation in the new era is the core of the future of BAIC and Mercedes-Benz."