FAW mulls over China A share market listing

It is reported that FAW Group plans to integrate its listed subsidiaries under the name of "FAW Shares", and is expected to be listed in China's A-share market in August, with no less than 100 billion yuan worth of capital stock. It is expected to be listed the same way as Dongfeng Automobile (0489.HK), which excludes foreign assets of the joint ventures. However, there has been no confirmation from FAW so far.

FAW Group currently has four listed companies in the domestic and Hong Kong stock market. The speculation has boosted the share prices of FAW Xiali, FAW Sihuan, and FAW Car in the stock market.

According to analysts, the Group has earlier planned to be listed on the Hong Kong share market in order to gain global recognition. However, due to foreign investor’s lack of knowledge on the Chinese auto industry and Chinese auto manufacturers, the offered share price was expected to be relatively low. Add that to the complexity of listing a domestic company on the Hong Kong Stock market, an IPO in China's A-share market seems like a more rational option for FAW.

FAW Group currently has 30 wholly-owned subsidiaries and 18 holding subsidiaries, which includes FAW Automotive Co., FAW Car Co., Tianjin FAW Xiali Automobile Co., Ltd., FAW Sihuan Automobile Co. Ltd. and two JVs: FAW-Volkswagen Automotive Co. and Tianjin FAW Toyota Motor Co., Ltd. The group has a total asset of 109.85 billion yuan.

FAW Group is the largest automobile company in China, and has two foreign partners: VW and Toyota. At present, Volkswagen (China) and Toyota (China) have no comments on the issue. It is unknown that whether the foreign assets of the two joint ventures will be included in the listing.

There have been romours that the Group is likely to acquire some assets of its three listed branches, FAW Car (000800), FAW Sihuan (600742) and FAW Xiali (000927).