Wuling New Energy restructuring into the countdown: or completed at the end of June, the future will impact the ChiNext board?

Per reporter: Li Xing Per editor: Pei Jianru

After 5 months, the restructuring of a new company established due to asset integration, Liuzhou Wuling New Energy Automobile Co., Ltd. (hereinafter referred to as Wuling New Energy), has entered the countdown.

On May 6, a person approaching Wuling Motors (00305. HK) insider revealed in a telephone interview with the "Daily Economic News" reporter that the company will issue a circular on the capital increase of Wuling New Energy and the notice of the special general meeting of shareholders before May 11, and all aspects of the work are being intensively docked in the past few days. "Within 15 working days of the issuance of the Circular, the Company will hold an independent general meeting of shareholders and, if all goes well, it is expected that the relevant restructuring agreement will come into force at the end of June." The above-mentioned people close to Wuling Motors said.

On March 31, Wuling Motors issued a 36-page announcement to the public, "Discloseable Transactions, Connected Transactions and Continuing Connected Transactions for the Capital Increase of Wuling New Energy" (hereinafter referred to as the "Capital Increase Announcement"), which showed that according to the asset restructuring and the intention to invest in Wuling New Energy reached in December last year, Wuling Automobile, (i.e. Guangxi Automobile Group Co., Ltd.), Wuling Industry (i.e. Liuzhou Wuling Automobile Industry Co., Ltd.) and Wuling New Energy Sifang formally entered into a capital increase agreement.

Image source: Wuling Automobile announcement

Wuling Automobile said that the company intends to invest in Wuling New Energy, on the basis of the existing commercial vehicle main business, to build a new energy vehicle business sector, and comprehensively develop and develop the new energy vehicle business.

The "Capital Increase Announcement" disclosed the latest restructuring of Wuling New Energy, business transaction model, production capacity planning, etc. "The company plans to let Wuling New Energy achieve independent listing in the future, or land on the ChiNext board." A person familiar with the matter, who did not want to be named, told reporters in a WeChat interview.

Entered the passenger car field and sought to complete the listing independently

"Before the completion of the asset restructuring, Wuling New Energy was wholly owned by Guangxi Automobile." The relevant staff of Wuling Automobile said in a telephone interview with reporters that only after the relevant restructuring agreement fully takes effect, the equity of Wuling New Energy will change and be jointly held by Wuling Automobile, Guangxi Automobile and Wuling Industry.

According to Qixinbao data, Wuling New Energy was established on June 4, 2021, with Yuan Zhijun, president of Guangxi Automobile Group and chairman of the board of directors of Wuling Automobile, as the legal representative, with a registered capital of 700 million yuan and 100% shareholding by Guangxi Automobile.

On the evening of December 1 last year, Wuling Motors issued the "Letter of Intent on Asset Restructuring and Investment in Wuling New Energy" (hereinafter referred to as the "Letter of Intent"), saying that the company and Guangxi Automobile, Wuling Industry and Wuling New Energy entered into a letter of intent on proposing asset restructuring and investment in Wuling New Energy, aiming to use Wuling New Energy as a platform to integrate all the resources of the Group and focus on the field of new energy vehicles.

Image source: Wuling Automobile announcement

According to the requirements of the capital increase agreement, Wuling Automobile, Guangxi Automobile and Wuling Industry will increase the capital of Wuling New Energy by about 2.906 billion yuan in three phases. The joint venture parties (Wuling Automobile, Guangxi Automobile, Wuling Industry) will set up an employee share shareholding platform to implement the employee share plan at a capital contribution of not more than 4% of the total share capital of Wuling New Energy.

According to the "Capital Increase Announcement", after the completion of the capital increase, Wuling New Energy will be transformed into a foreign-invested enterprise, jointly owned by Guangxi Automobile, Wuling Automobile and Wuling Industry, holding 70%, 13.37% and 13.13% of the shares respectively.

According to the capital increase agreement, the new energy vehicle business and assets originally operated by Wuling Industries were transferred to Wuling New Energy to realize the restructuring of Wuling Motors' new energy business. "Although Wuling New Energy has not yet completed the restructuring, in fact it has already begun to operate." The above-mentioned Wuling New Energy related staff revealed to reporters that at present, The new energy logistics vehicle business of Wuling Industry has been transferred to Wuling New Energy and started sales.

The above-mentioned Wuling New Energy related staff explained to reporters that Wuling New Energy undertakes the new energy vehicle business of the group, that is, from the identity of a project group under the group to an independent company.

It is worth noting that in addition to carrying the heavy responsibility of Wuling's independent business integration and new energy vehicle business expansion, Wuling New Energy has also been placed high hopes of independent listing by the three major shareholders. "In the long run, it is definitely hoped that it can have the ability to operate independently and then enter the capital market." The above-mentioned people close to Wuling Motors said.

The above-mentioned person familiar with the matter, who did not want to be named, admitted that after the company (that is, Wuling New Energy) completed its independent listing, it can obtain more sources of funds to better support its subsequent development.

It is reported that with the completion of the restructuring of Wuling New Energy, the company's vehicle business will gradually expand from the commercial vehicle field to the passenger car segments. "However, at present, the company has not yet launched new energy passenger car products." The above-mentioned Wuling New Energy related staff said that this year, Wuling New Energy will still focus on the field of commercial vehicles.

To achieve the sales target of more than 200,000 vehicles

The final agreement signed by the relevant parties clearly states that Wuling New Energy plans to integrate the assets required for the research and development, manufacturing and sales of new energy vehicles, focusing on the development and creation of cost-effective pure electric and plug-in hybrid new energy vehicles, as well as other new energy intelligent travel products.

At the 2021 annual performance exchange meeting of Wuling Automobile held on April 7, Huang Jianzhu, securities director of Guangxi Automobile Group, said that Wuling New Energy is the highest quality asset of new energy in Guangxi Automobile Group, and an automotive technology company dedicated to creating cost-effective pure electric, plug-in hybrid (i.e. plug-in hybrid) new energy intelligent travel products with market-oriented operation and reorganization.

In terms of commercial vehicle business, in 2021, in addition to accelerating the research and development of G200, G050 new platform and other series of products, Wuling Automobile will also quickly build a mature new energy vehicle sales system, with a total of more than 130 marketing outlets, covering 27 provinces and municipalities directly under the central government.

The reporter learned from the above-mentioned insiders close to Wuling Motors that after the completion of the restructuring, the first new energy passenger car launched by Wuling New Energy will be a plug-in hybrid version. "Plug-in hybrid models will be the main products of Wuling New Energy." The relevant person in charge of Wuling Automobile explained that at the Shanghai Auto Show last year, Wuling Industry (a subsidiary of Wuling Automobile) released the self-developed front-mounted rear-drive hybrid system - Lingqing, which reduced fuel consumption by more than 30%.

However, for the rumors that Wuling New Energy will launch a new energy passenger car in September this year, the above-mentioned insiders said that the news was wrong. "The new passenger car will certainly not be launched in September." The relevant person in charge of Wuling Automobile said that when it will be released needs to be finalized according to the company's overall development situation and all aspects of preparation.

The "Daily Economic News" reporter learned from Wuling New Energy insiders that at present, the future development plan of Wuling New Energy is still in the initial stage of program formation and has not yet been finally adopted. "The sales targets initially mentioned by Wuling New Energy are: more than 80,000 vehicles in the first three years (that is, 2022-2024) and more than 200,000 vehicles in the second three years (that is, 2025-2027)." The above-mentioned person familiar with the matter, who did not want to be named, revealed to reporters.

Image source: Wuling Automobile announcement

The Capital Increase Announcement also clarifies that from 2022 to 2024, Wuling New Energy's target production capacity will be 20,600 units, 55,000 units and 85,000 units, respectively.

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