Huatai Motor and JD Capital reached a strategic cooperation
2018-01-30
On January 19th, Huatai Motor Group Co., Ltd (short: Huatai Motor), the earliest domestic independent vehicle company to enter the new energy vehicle industry, signed a strategic cooperation with Kunwu Jiuding Investment Management Co., Ltd, a wholly-owned subsidiary of A-share listed Kunwu Jiuding Investment Holding Co., Ltd. (JD Capital, 600053.SH), which created a myth in the investment industry. This cooperation will help Huatai Motors to further improve the new energy vehicle industry chain and carry out investment and mergers of industry targets with core technology competitiveness and independent intellectual property rights, and dose not exclude the possibility of independent listing of Huatai’s new energy vehicle segment.
Zhang Xiugen, Chairman of the Board of Directors of Huatai Holding Group and Huatai Motor Group; Wang Weifu, Chief Financial Officer of Huatai Holding Group; Gu Xiaodong, Partner, and Senior Vice President; Ge Aijing, General Manager of Industrial Capital Department of JD Capital attended the signing ceremony.
Cooperation involving capital markets and other aspects
According to the strategic cooperation framework agreement signed between Huatai Motor and JD Capital, the two parties will cooperate in the new energy vehicle industry chain, capital operation, financial participation, and investment, etc.
Firstly, the two sides will explore M&A in the upstream and downstream of the new energy vehicle industry chain, leverage JD Capital’s industry understanding and project resources in key components such as new energy vehicle batteries, motors, and electric controls, surrounding advantageous industrial subjects and brands of Huatai Motor Group, with science and technology leading and innovation-driven development direction, set up M&A funds to carry out investment and mergers in industry targets with core technology competitiveness and independent intellectual property rights.
Secondly, both sides carry out capital operations around the capital market, take advantage of Huatai Motor’s industrial resources in the domestic automobile field， combined with JD Capital’s rich operational experiment in asset restructuring and financial investment, explore investment and financial cooperation at all levels of Huatai Motor Group, and continuously consolidate and continuously strengthen the overall advantages of Huatai Motor Group.
At last, both sides agreed to play their respective advantageous project resources, explore cooperation in equity investment, dig the investment value brought by resource docking and industrial synergy, and seek financial investment income.
Huatai Motor layout new energy industry chain
Huatai Motor, China’s earliest independent vehicle enterprise to enter the new energy vehicle industry, has core technology and independent intellectual property rights in the “three electric technologies” of electric control, electric motor, and battery integration.
Huatai Motor’s new energy products have been at the forefront of the market. In addition to the nation’s first pure electric SUV Huatai XEV260, Huatai new energy vehicles also have new energy models such as iEV230, EV160B, EV160R, and the sales of pure electric models have exceeded 1500 units in a single month. Huatai New Energy has developed six complete vehicle platforms, including small electric vehicles,sedans,SUVs、 MPV、 buses and electric logistics vehicles.
In the next three years, more than ten new vehicles will be put on the market in the field of new energy alone, including hybrid new energy models that will be taken off in 2018. Huatai Motor will complete the listing of a fully self-developed MVP pure electric vehicle.
In addition to the reserve of core technology in new energy vehicles, Huatai’s layout in the fields of public travel and finance also strongly supports for Huatai’s new energy vehicle consumption.
Huatai Motor’s online car platform “Xuanxuan Travel” has followed the national policy of “energy saving and emission reduction, green environment protection” since its inception. Meanwhile, all the vehicles invested are new energy vehicles. It is reported that Huatai will also put 500,000 new energy vehicles in dozens of cities across the country in the next few years to expand the business scope of Xuanxuan Travel while effectively driving the sales of Huatai’s new energy vehicles.
After the subsidies for new energy vehicles are withdrawn, consumer pressure will increase. In response, Huatai has established Huaitai Motor Finance Co., Ltd. to provide different financial solutions for different products. In the context of the rising cost of new energy vehicle consumption in 2018, Huatai’s financial leverage will be a key element in leveraging consumption.
“The myth of investment industry” JD Capital gives capital wings to Huatai
Huatai Motor and Dawning Group for the transfer of Dawning shares, the handover is steadily proceeding when the controlling shareholder of Dawning shares will change to Huaitai Motor, so why Huatai Motor signs a strategic cooperation framework agreement with JD Capital at this time?
The reporter learned that JD Capital, the first private equity investment and management institution listed on the main board in China, It is professional institution focusing on equity investment and management registered with the National Development and Reform Commission and the China Securities Investment Fund Association. JD Capital was selected as one of the “Top 10 Private Equity Institutions in China” for eight consecutive years and was awarded “Best PE Institution in China” four times in 2011,2012,2015, and 2016.
In the first three quarters of 2017, a total of ten participating projects of JD Capital Holdings in the fund under its management were approved by the China Securities Regulatory Commission for IPO, earning a cumulative total of 5.355 billion yuan, of which several projects, such as Oupai Door, Juewei Duck and Jiudian Pharmaceutical, earned about ten times. The investment in these ten companies was generally made around 2012, and although the return may be as high as ten times, the shares have to be held firmly for five years, which shows that JD Capital is a patient long-term investor.
The 19th Party Congress report pointed out that deepening the reform of the financial system, enhancing the ability of financial services to the real economy, increasing the proportion of direct financing, and promoting the healthy development of the multi-level capital market. At present, Huatai Motor has basically formed “Large Industry Chain” including automatic transmission, engine, axle, SUV, car, pickup, bus, truck, etc. The next development of new energy vehicles is the top priority of Huatai’s work, and it should take the initiative, make all-out efforts to protect, and adopt a multi-pronged approach, which needs the escort of capital operation connoisseurs like JD Capital.
Through the sincere cooperation between Huatai Motor and JD Capital, the two sides will grasp the opportunity of the national new energy vehicle industry and give full play to Huatai Motor’s ability to integrate auto industry resources, as well as the advantages of its business network and production bases in many places in China. Cooperating with JD Capital's professional ability in the field of equity investment, rich project resources and investment experience in the field of advanced manufacturing and high-end equipment investment, we will establish an all-round and three-dimensional strategic partnership from the height of the strategic layout of both groups to achieve the goal of complementary advantages, mutual benefit, and joint development.