Economic Observation Network reporter Liu Xiaolin In the past month, Hong Kong-listed Wuling Automobile (00305. HK) shares fell all the way, from HK$1.5 to around HK$1. The 2021 performance roadshow completed on April 7 could not pull the stock price, compared with 2020, The gross profit of Wuling Automobile's revenue in 2021 fell, and the biggest point of view was that the loss shrank from 33.4 million to 24.14 million.
This company, which provides about 80% of various parts for the star company SAIC-GM-Wuling, but has been mistaken for many years as the main body of SAIC-GM-Wuling listing, has not had a highlight moment in the 15 years since its backdoor listing.
However, a restructuring that has just entered the implementation stage is expected to break the current situation of Wuling Motors. Whether in the eyes of the capital market or in Liuzhou base camp, a restructuring announcement by Wuling Automobile on March 31 revealed that the scope of business integration and strategic adjustment is far greater than that of paper.
On March 31, 2022, Wuling announced that in accordance with the asset restructuring and capital contribution intention reached in December last year, Wuling Automobile, Guangxi Automobile, Wuling Industry and Wuling New Energy have formally signed capital increase agreements, asset sale and related party transaction agreements for the next two years. The 36-page announcement details the restructuring and business transaction model that will be carried out around the newly formed vehicle company, Wuling New Energy.
According to the agreement, the first three enterprises will increase the capital of Wuling New Energy by 2.906 billion yuan in three phases, and transfer the new energy vehicle business and assets originally operated by Wuling Industry to Wuling New Energy to achieve the restructuring of Wuling Automobile's new energy business.
The relationship between the four enterprises that signed the agreement is complicated: Guangxi Automobile (formerly known as Liuzhou Wuling Automobile Group) is the controlling shareholder of the listed company Wuling Automobile, which is the controlling shareholder of Wuling Automobile, which is the controlling shareholder of Wuling Industry, and Wuling New Energy (full name "Liuzhou Wuling New Energy Automobile Co., Ltd.") is a wholly-owned subsidiary of Guangxi Automobile, which was newly established in June last year, and its goal is to build an automotive technology company with cost-effective pure electricity, plug-in hybrid new energy intelligent travel products.
According to the enterprise investigation, Wuling New Energy was registered and established in June 2021, 100% owned by Guangxi Automobile, and the legal representative is Yuan Zhijun, director of Guangxi Automobile, chairman of the board of directors of Wuling Automobile Group, and former deputy general manager of SAIC-GM-Wuling. However, it is reported that the company is not officially operating its business externally.
"The parent company, Guangxi Automobile Jineng, uses Wuling New Energy as a platform to achieve the goal of optimizing and reorganizing new energy vehicle business, assets, personnel and other resources." Wuling Motors said in an announcement in December last year.
The establishment of Wuling New Energy is another step in the integration of Wuling Automobiles in its independent industries after the backdoor listing of the old Liuzhou Wuling Group in Hong Kong and the restructuring and renaming of Guangxi Automobile. The support for the new corporate entity of "Wuling New Energy", as well as the importance of its new energy vehicle platform built as the strength of Guangxi Automobile Group, and the various possibilities of strategic restructuring have also added variables to the layout of the Wuling automobile industry.
The Economic Observer exclusively learned from relevant automotive people close to Wuling Industry that The goal of Wuling New Energy is to refer to the mixed reform idea of LiuGong Group (Guangxi Liugong Group Co., Ltd.), introduce strategic investors, and become an independent listed company through three rounds of financing. In December 2020, LiuGong introduced 7 strategic investors and implemented employee shareholding, raising a total of 3.415 billion yuan in mixed reform.
More sensitively, unlike Wuling Motors, whose previous new energy vehicle business was mainly commercial vehicles, the restructured Wuling New Energy ambition is to cover the entire new energy market segment and industrial chain, including the passenger car field.
According to the above-mentioned sources, in September this year, Wuling New Energy will launch a new energy passenger car, "is a plug-in hybrid 7-seat household MPV, similar to the size of Wuling Capgemini under the previous auto-GM-Wuling."
This means that after 20 years of the establishment of the joint venture passenger car company SAIC-GM-Wuling, Wuling Automobile Capital has finally decided to set up another vehicle company covering passenger car business. Next, the possibility of the association between Wuling New Energy and SAIC-GM-Wuling, which are also invested by Guangxi Automobile, in new energy products will become the key to determining the new energy restructuring pattern within the Wuling system.
As an important town in China's southwest automobile industry, the business card of Liuzhou Automobile industry has always been SAIC-GM-Wuling, the founder of "Shenche", but the background of the joint venture car company cannot draw a grand plan of its own brand on the new energy track that determines the future. This makes Wuling New Energy, which "turned out to be born", have the identity color of the bloodline.
According to the Economic Observer's information learned from the Liuzhou automotive industry, the mixed reform of Wuling New Energy will have many possibilities, especially in the context of Shenyang, the chairman of SAIC-GM-Wuling for 20 years, who will step down after two years at the latest, this restructuring and mixed reform does not rule out that the balance of resources and various forces in the Wuling system will be broken.
The fate of the two Wulings
To clarify the complexity of this reorganization, we must first clarify the existence of the "two Wuling": one and GM have become Sino-US joint ventures, one has gone on the market in Hong Kong and become a "foreign-funded enterprise"; one is famous in China and has become the "light of domestic goods" that has created a "god car" in the automobile industry; an obscure supplier of "god car", and is often zhang guan and Li Dai, staging a "oolong" daily life that is mixed with the performance of the first Wuling.
This Wuling is not the other Wuling - this is most people figure out Wuling Motors (00305. HK) first reaction after identity. The assets of SAIC-GM-Wuling do not belong to the listed company Wuling Automobile, and its performance is reflected in the financial report of the major shareholder SAIC Group, while Wuling Automobile is one of the top 100 global auto parts suppliers and the parts supplier of SAIC-GM-Wuling.
Founded in 1958, Liuzhou Automotive Power Machinery Factory (later Liuzhou Wuling Automobile Co., Ltd., hereinafter referred to as Wuling Group) is the beginning of Guangxi's automobile industry, in the past 20 years, Wuling Group has been integrated in two paths, and finally formed a pattern of two Wuling.
In 2001, through the gratuitous transfer of state-owned assets, SAIC motor acquired 75.9% of the shares of Liuzhou Wuling Automobile Co., Ltd., and "Liuzhou Wuling" was subsequently renamed "SAIC Wuling". The following year, GM subscribed for shares issued by SAIC Wuling to it, and the restructured SAIC-Wuling was renamed SAIC-GM-Wuling, and the shareholding ratio became 50.1% of SAIC, 34% of GM and 15.9% of Wuling.
After becoming a Sino-foreign joint venture car company, SAIC-GM-Wuling grew rapidly in the micro-car market, with sales of more than one million vehicles in 2009, and its profit exceeded that of SAIC Volkswagen. Also in this year, after two years of fierce competition, GM bought 10% of the stake in Wuling for $51 million, increasing its shareholding ratio of SAIC-GM-Wuling to 44%, and Wuling's proportion dropped to 5.9%.
In this transaction, although Wuling Group avoided the end of the acquisition of all its equity and the loss of the Wuling brand by SAIC for free (as an industrial brand in Guangxi, the Wuling brand remained in Wuling Group and authorized SAIC-GM-Wuling to use it), and through "equity exchange for resources", SAIC-GM-Wuling was able to launch Baojun brand passenger cars on the old GM Buick Kaiyue platform. However, for it, the 8-year game has always become a portrayal of the step-by-step decline of equity and the weak right to speak.
In the sigh of Shenyang, general manager of SAIC-GM-Wuling, "I also figured it out, and then I developed behind the superior resources of these two major shareholders", SAIC-GM-Wuling has become the most local joint venture car company, and has also become an important "filter" to beautify the performance of the other two major shareholders.
At the same time, with the expansion of scale, Wuling Group began to sort out its other assets and create a financing path. In October 2006, Wuling Group integrated its parts, engine and commercial special vehicle business segments to establish Liuzhou Wuling Automobile Industry Co., Ltd. (hereinafter referred to as Wuling Industry), which is also the most important business asset of Wuling Group.
In 2007, Wuling Group reorganized Junshan Group, a Hong Kong listed company, and established Junshan Wuling Automobile Group Co., Ltd. after asset injection, which was listed in Hong Kong through the opportunity. Subsequently, Wuling Industry became a holding subsidiary of the listed company, becoming a Sino-foreign joint venture jointly held by the listed company and Wuling Group, with a shareholding ratio of 60.9% and 30.1% respectively.
In June 2011, Junshan Wuling announced that it had changed its name to Wuling Automobile Group Holdings Limited, and the stock abbreviation was changed to "Wuling Automobile". According to Qixinbao, Wuling Group (later renamed Guangxi Automobile) owns 60.64% of the equity of wuling automobile, a listed company, and is its actual controlling party. Another major shareholder is Junshan Development Co., Ltd., which owns 11.6% of the shares, and as the sole shareholder and director of Junshan Development, Li Cheng owns 11.83% of the shares. According to public information, on January 23, 2022, Li Cheng, who was the vice chairman, executive director and chief executive officer of Wuling Automobile, passed away due to illness.
With this round of restructuring, wuling's other core assets other than SAIC-GM-Wuling have been packaged and listed in Hong Kong.
In 2015, Wuling Group was reorganized and renamed guangxi automobile group co., LTD. (guangxi automobile). "Guangxi Automobile" has become a symbol of the reorganization of the Wuling automobile industry. In 2016, Wei Hongwen, former chairman of Wuling Industry and vice president of SAIC-GM-Wuling, was appointed chairman of Guangxi Automobile and has been at the helm since then.
Image source: Guangxi Automobile official website
Whether it is a listing reorganization or a name change, in the eyes of the outside world, this is Guangxi Automobile's hope to make a competitive way in the field of buses and modified cars after delivering the mature micro-car business to SAIC-GM-Wuling. According to the information on the official website, Guangxi Automobile's business has two parts: parts and engine business and vehicle business, and the vehicle business covers four categories: buses, modified vehicles, non-road vehicles and special vehicles.
At present, there are five production enterprises under Guangxi Automobile, in addition to Wuling Automobile and Wuling Industry, there are Guilin Bus Development Co., Ltd. (hereinafter referred to as Guike), Liuzhou Guangling Automobile Technology Co., Ltd., and Guangxi Guangyu New Energy Automobile Air Conditioning Compressor Co., Ltd. (hereinafter referred to as the "Company").
In 2019, Guangxi Automobile obtained the pure electric bus production qualification issued by the Ministry of Industry and Information Technology, becoming the first newly established pure electric bus enterprise in China after the implementation of the exclusive production qualification approval system for "new energy vehicles", ending the history of production by borrowing the qualification of Guilin Bus Group. Guangxi Automobile's new energy products are Wuling brand, Chuangling brand GXA series bus and corresponding modified car products.
In June 2021, Guangxi Automobile announced the establishment of a wholly-owned subsidiary, Liuzhou Wuling New Energy Automobile Co., Ltd. (hereinafter referred to as Wuling New Energy), as well as another wholly-owned subsidiary, Beijing Lingyun Technology Co., Ltd. The legal representatives are All Yuan Zhijun. In January 2022, 700 million yuan from Guangxi Automobile was injected into Wuling New Energy.
Wuling New Energy "intervenes" in passenger cars
Changes are showing signs at the end of 2021. With the help of the "Letter on Asset Restructuring and The Intention to Invest in Wuling New Energy" issued by Wuling Motors, Guangxi Automobile has high-profile conveyed its "ideas" attitude on new energy vehicles. The Economic Observer reporter learned from the relevant people in the Liuzhou automotive industry that Guangxi Automobile is brewing a strategic path to strengthen and expand new energy vehicles, and in this path, Wuling New Energy plays a key role.
"The parent company Guangxi Automobile will use its wholly-owned subsidiary Wuling New Energy as a platform to integrate and reorganize the assets and businesses related to new energy vehicles, which are currently mainly undertaken by Wuling Industry." The announcement said. After the completion of the capital increase, Wuling New Energy will focus on the manufacture and sales of new energy vehicles, while Wuling Industrial Group will be a strategic supplier of Wuling New Energy and will no longer involve complete vehicles.
As the largest supplier of SAIC-GM-Wuling, Wuling Industrial's business is mainly in three major segments: auto parts, automotive power system and commercial vehicle business including new energy. In the vehicle business, Wuling Industrial has a production capacity of 50,000 special vehicles and new energy commercial vehicles.
The research and development of new energy power system has been the focus of Wuling Industry in the past two years. Since the second half of 2020, Wuling Industries has developed and put into production electric drive axles for micro commercial vehicles, light commercial vehicles and passenger cars, which are available to vehicle manufacturers including SAIC-GM-Wuling and JAC.
"This year, we will increase the intervention of leading enterprises in the new energy car manufacturing sector, such as cooperation with Nezha Automobile, and some products of Xiaopeng We also have corresponding expansion." Wuling Motors said at the performance communication meeting on April 7.
At the same time as the intention to increase capital and reorganize Wuling New Energy was reached, a series of investments and asset transfers were also launched. Including Wuling Automobile's intention to form a joint venture company for new energy vehicle battery systems with Sunwoda in 2021, and Guangxi Automobile Group's injection of a new energy vehicle base with an annual output of 300,000 units into Wuling New Energy, which has a production capacity of up to 300,000 vehicles per year, mainly for the production of new energy vehicles under 6 meters. At the same time, the pure electric logistics vehicle developed in cooperation with ASF Co., Ltd. of Japan will also be produced at the site.
The public positioning of Wuling New Energy is to "create a new energy vehicle enterprise with cost-effective pure electricity and plug-in hybrid new energy intelligent travel products". Wuling Motors also said that Wuling New Energy will comprehensively develop and develop the new energy vehicle business on the basis of the existing commercial vehicle business. This is believed to be the largest new energy passenger car market that will expand into the business.
Facts have proved that the brewing and preparation of passenger cars by Wuling has not been a day. In December 2021, Yuan Zhijun, chairman of the board of directors of Wuling Motors, revealed in an interview with Sina Finance that Wuling Motors has developed and launched a variety of core parts and components of high-end passenger cars that integrate electrification, lightweight and intelligence, and have been applied on a number of brand models.
"The self-developed 'Lingqing' front-facing rear-drive hybrid system can be adapted to compact MPV, medium-sized MPV, pickup trucks and other models in the future, and is expected to become a heavy weapon for the expansion of the incremental market for the follow-up Wuling New Energy new model products." Yuan Zhijun said.
On April 7 this year, Wuling Automobile further said in response to investors' questions at the performance communication meeting that Wuling Liuji, a wholly-owned subsidiary of Wuling Industry, is about to form an annual production capacity of ≥ 100,000 sets of hybrid assemblies, and is expected to be mass-produced in the third quarter.
This is also the same information as the above-mentioned Liuzhou auto industry related people, who said that Wuling New Energy is about to launch its first hybrid model in September this year, which is a passenger car - a 7-seat family MPV. Hybrid and MPV are currently the areas in which domestic vehicle companies are concentrating.
The most obvious consequence of the layout of Wuling new energy companies is that savoy-GM-Wuling, which is also in the field of new energy, will usher in competitors in the same industry as the only passenger car sector invested by Guangxi Automobile.
The registered capital has just arrived in January, and the first passenger car will be launched in September, and Guangxi Automobile's coveting and secret storage of new energy passenger cars has also been exposed, and it is reported that the car comes from the independent research and development of Wuling New Energy.
In the Wuling Automobile Cloud Research Activity held on January 18, 2022, Wuling Automobile broadcast the production base of Wuling New Energy, which has the greatest growth potential in the future, and said that the production base has been fully started, and it is expected that two models will be put into production this year.
However, at present, it is not known what brand Wuling New Energy's models will hang, although previous public reports said that the Wuling brand belongs to Guangxi Automobile and has been authorizing SAIC-GM-Wuling to use. However, the trademark registration information shows that the "Wuling" trademark in the transportation field is under the name of SAIC-GM-Wuling, and guangxi automobile group mostly uses the graphic trademark of red light Wuling.
Mixed reform listing path under the "LiuGong model"
At present, it seems that Wuling New Energy, which Guangxi Automobile has reorganized with the strength of the Group, will not only break the existing product pattern, but also the restructuring at the capital level is more likely to break more interest links.
The tripartite capital increase announced on March 31 is the second financing of Wuling New Energy in less than a year since its establishment. In January 2022, Wuling New Energy received its first strategic investment from Eagle Fund, a senior strategic investment institution. According to the plan revealed at that time, Guangxi Automobile Group's share reform and restructuring of Wuling New Energy will be completed by June 2022, and it is planned to complete the Series A financing from third-party investment institutions in 2022. The financing funds are mainly used for product research and development and market expansion, with a view to realizing the listing of Wuling New Energy in the domestic A-share market in the next 3-5 years.
The establishment of a new energy vehicle subsidiary and the introduction of strategic investors to reorganize and list, which has become an important step for traditional car companies to move towards electrification, and Wuling New Energy is no exception. With the help of the capital increase and shareholding of Wuling Motors, a listed company in Hong Kong, Wuling Motors has achieved the transformation of its identity from a wholly-owned subsidiary of a state-owned enterprise to a foreign-invested enterprise, but this is only the first step in the restructuring of Wuling New Energy. Introducing more strategic investors into the market is the next main plan of Wuling New Energy.
It is reported that the "Liugong Mixed Reform Model" is the emulation object of Wuling New Energy. In December 2021, Guangxi LiuGong Group Co., Ltd. (hereinafter referred to as LiuGong Group, 000528) signed a capital increase and equity transfer agreement with 7 strategic investors regarding Guangxi LiuGong Group Machinery Co., Ltd. (hereinafter referred to as LiuGong Limited), raising a total of 3.415 billion yuan, while the company's key employees entered LiuGong Limited with a capital increase of 223 million. The resulting new shareholding structure is: LiuGong Group holds 51% of the shares, external investors hold 45.8%, and employees hold 3.2%.
Wuling New Energy looks like it is trying to follow the same path. According to the announcement of the capital increase, in addition to Wuling Motors, Guangxi Automobile and Wuling Industry will inject 2.906 billion yuan in cash or non-cash in three installments, the three parties will also set up an employee share shareholding platform to implement the employee share plan according to the capital contribution of no more than 4% of the total share capital of Wuling New Energy.
After the completion of this round of capital increase, Wuling New Energy will be held by Guangxi Automobile, Wuling Automobile and Wuling Industry 70%, 13.37% and 13.13% respectively. It is worth noting that in the announcement in December 2021, Wuling Motors stated: "Within 365 days after the completion of the capital contribution, Wuling Motors may choose to further subscribe for the new equity interests of Wuling New Energy Company, increase its shareholding ratio to more than 50%, or become the controlling shareholder of Wuling New Energy Company." "This makes Wuling New Energy's war investment plan have a variety of possibilities."
Subtle interaction with SAIC-GM-Wuling
To this day, in addition to the backdoor listing of Wuling Motors, local auto practitioners in Liuzhou are also full of interest in the restructuring of Wuling New Energy, and the focus of attention is the balance of forces behind it.
As a "fragrant feast", The new identity of Wuling New Energy as a "foreign-invested enterprise" and the competitive relationship with SAIC-GM-Wuling also give it more imagination to introduce the war investment plan.
"I heard that in the internal imagination, it is possible to import one or two cars from SAIC-GM-Wuling," said a source close to SAIC-GM-Wuling. This also makes it possible for Wuling New Energy's strategic investment plan to be linked to SAIC-GM-Wuling.
Wuling New Energy, as a platform for the whole new energy industry chain built by Guangxi Automobile Group, has greatly weakened the space for SAIC-GM-Wuling to set up a separate new energy subsidiary, and in fact, the complex joint venture equity structure also determines that it is difficult for SAIC-GM-Wuling to realize this idea.
In addition, the Economic Observer reporter learned that Shenyang, chairman of SAIC-GM-Wuling, was approved to extend his term for three years after the retirement period arrived, and he is about to step down after two years. At present, there are many speculations in the Liuzhou automotive industry about Shenyang's departure from office and the strategic changes of SAIC-GM-Wuling in the future. The interaction between SAIC-GM-Wuling and Wuling New Energy in the new energy business is considered to be one of the variables.
As the executive director and legal representative of Wuling New Energy, Yuan Zhijun's role in this big game has also been paid attention to again. As a senior executive of Wuling, Yuan Zhijun currently holds important positions in 7 enterprises, including vice chairman of Guangxi Automobile Group, director of SAIC-GM-Wuling, director and president of Wuling Industry, and executive director and legal person of Beijing Lingyun Technology. He is also the Chairman of the Board of Directors of Wuling Motors, a listed company. But its most familiar resume is related to SAIC-GM-Wuling.
Yuan Zhijun joined Wuling Automobile Group in 1987 and has held various positions, holding various positions in SAIC-GM-Wuling since February 2003 and deputy general manager of SAIC-GM-Wuling Automobile in 2009. It is equivalent to the beginning of saic-GM-Wuling's establishment, which is the right-hand man under Shenyang.
As the number one of SAIC-GM-Wuling who has been at the helm for 20 years since its establishment, will Shenyang turn to a new automotive platform with a new identity or new capital after leaving office? Will he be with Yuan Zhijun again? It is also one of the speculations within the Liuzhou automotive industry.
It is reported that at present, there is still a dispute within Wuling New Energy about the allocation of resources and the development path, and there is no relevant news about the research and development strength and platform resources of new energy passenger vehicles. At the same time, the development of SAIC-GM-Wuling is also considered a bottleneck that is difficult to break.
In 2021, SAIC-GM-Wuling new energy vehicle sales reached 450,000 units, and the star product MINI EV accounted for 420,000 vehicles. At present, SAIC-GM-Wuling has five new energy models, three are MINI EV and its extension, and two are Wuling Nano EV and Baojun KiWi EV, all of which belong to the electric microcar series. However, as we all know, MINI EV is not a "printing machine" for SAIC-GM-Wuling, but an "integral machine" with small profits or even losses.
In March 2022, SAIC-GM-Wuling released the "two million, five billion" new energy strategy, with the goal of reaching one million new energy vehicle sales in 2023. On April 28, at the pre-sale communication meeting of SAIC-GM-Wuling Global Silver Label's third model, the home MPV Wuling Jiachen, saic-GM-Wuling replied to the question of "whether new energy models will be launched in more market segments", SAIC-GM-Wuling replied to the Economic Observer reporter with an answer that was slightly equal to nothing - "will be decided according to user needs".
Although the strategy script has not been released for a long time, SAIC-GM-Wuling is bound to be reluctant to draw a prison in new energy. As the legal person of Wuling New Energy, Yuan Zhijun also does not hide his confidence in small new energy vehicles and his optimistic expectations for the prospects of Wuling New Energy.
In December 2021, Yuan Zhijun said in an interview with Sina Finance that "small new energy vehicles comply with the overall requirements of energy conservation and emission reduction, and will occupy a place in China's new energy vehicle market", he did not explain whether this is from the perspective of suppliers or the position of OEMs. He also declared that "in the future, Wuling Automobile will use Wuling New Energy Company as the bearing platform to obtain more new energy vehicle business resources from Guangxi Automobile Group and achieve in-depth integration and focus of resources." "To the outside world, hesitation is full of subtext.
At present, in the WeChat public account search "Wuling New Energy", the first "Wuling New Energy" is SAIC-GM-Wuling's new energy official micro, followed by a large number of Wuling new energy flagship stores and directly operated stores of the official micro, and then there is the certification body for "Liuzhou Wuling New Energy Automobile Co., Ltd." The public account "Wuling New Energy Vehicle", the content under which is still blank.
However, on April 2, 2022, Wuling New Energy announced the winning bid results for the construction project of the new energy marketing information system, which means that the construction of its marketing system has been started. It also means that after 20 years, with the help of the new energy track, another round of restructuring of Wuling automobile assets is about to usher in a climax.