Geely said to acquire 15.24% stake in CV maker Hualing Xingma Automobile
Shanghai (Gasgoo)- Geely, a Chinese highest-profile privately owned automaker, might acquire 15.24% stake in Hualing Xingma Automobile, an Anhui-based commercial vehicle manufacturer listed on Shanghai Stock Exchange, a local media outlet revealed on June 3.
Responding to a request from the media outlet, people from Geely Commercial Vehicles disclosed that both parties have made contacts in regard to this, while the final result should be subject to an official announcement.
(Photo source: Hualing Xingma Automobile)
Located in Ma'anshan, Anhui province, Hualing Xingma Automobile is one of China's important R&D and production bases of heavy-duty trucks, heavy-duty special vehicles and relevant core parts, according to its self-introduction. It specializes in manufacturing the complete vehicles, chassis, powertrains and axles of heavy-duty vehicles, heavy-duty special vehicles, new energy CVs, buses and pertinent components.
The rumor stemmed from an announcement released on May 22 by the CV maker, which said its shareholder Anhui Xingma Automobile Group Co.,Ltd. and wholly-owned subsidiary Ma'anshan Huashen Building Materials Industry Co.,Ltd. intended to transfer a total of 84,680,905 shares they hold in Hualing Xingma Automobile, representing 15.24% of the latter’s share capital.
Ma'anshan Municipal government serves the actual controllers for both transferors, according to the business data service platform Qixinbao. Affected by the changeable demands from the downstream and the fierce competition and limited growth room of the industry where it belongs to, Hualing Xingma is struggled with unfavorable finance condition, higher debt-to-asset ratio and the restriction on expanding the scale of assets and businesses. Hence, it attempts to introduce a powerful strategic partner who will be able to support Hualing Xingma in capital, management and business, so as to improve its business size and profitability, the CV maker stated then.
For the first quarter of 2020, Hualing Xingma saw its revenue plunge 44.15% to 1,070,472,500 yuan ($150,652,000) and posted a net loss of 109,682,900 yuan ($15,436,124), according to the aforesaid announcement.
If the rumor was confirmed, Geely would pile on more strength to its CV business unit. The Zhejiang-based company launched its new energy CV brand in 2016, and formally tapped the CV domain by buying out the stakes in Dongfeng Nanchong Automobile Co.,Ltd. with 407 million yuan ($57,276,000) in March of the same year. Currently, Geely New Energy Commercial Vehicle Group (GCV) possesses two core sub-brands—LEVC and Yuan Cheng Auto, and has been committed to the development of new energy clean commercial vehicles.
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