The Zhitong Finance App learned that CICC released a research report saying that if the GAC Group (02238) plans a major asset restructuring, it is expected to become an important precedent for the integration of central car companies across regions, releasing a positive anti-domestic market signal, which is expected to warm up sentiment, but the details, effects, and impact of the restructuring on the improvement of the industry pattern remain to be seen.
According to the report, GAC and FAW Co., Ltd. signed an “Intent Agreement” on September 14 to purchase part of FAW's shares in an automotive joint venture by issuing shares and raise supporting capital. FAW will become GAC's second-largest and strategically influential shareholder. This transaction is expected to constitute a major asset restructuring and related transaction. It will not change the actual controller of GAC, nor will it constitute a restructuring and listing. Currently, core terms such as the title of the target, transaction ratio, and valuation have not been disclosed, and the final plan is still awaiting formal agreement and regulatory approval.
The bank pointed out that FAW's operating base is relatively stable. Hongqi has an independent luxury brand base, and joint venture brands contribute steady sales and profits, but there is still room for strengthening the scale of independent new energy, intelligent iteration, and the layout of the Southern market; GAC is in the phase of new energy transformation and profit building. The two parties' differentiated resource endowments complement each other strongly. If high-quality joint venture assets are injected into GAC, it is expected to improve its profit statement to a certain extent, while FAW can securitize some of its joint venture assets to expand the ecosystem with capital. In the medium to long term, we can expect further cooperation between the two sides in smart electronics research and development platforms, joint procurement cost reduction, North-South channel integration, and coordination of overseas and joint venture resources.