On December 30, 2011, the unveiling ceremony of SAIC’s "annual vehicle sales exceeding 4 million vehicles and overall listing" was held in Shanghai World Expo Center.
SAIC is the second listed company directly controlled by Shanghai State-owned Assets Supervision and Administration Commission after Shanghai Port Group (600018).According to the goal set by the reform of state-owned enterprises in Shanghai, during the "Twelfth Five-Year Plan" period, more than 90% of the municipal industrial groups in Shanghai will be listed as a whole or their core assets.
According to the overall listing plan of SAIC, the original SAIC group included 16 companies related to spare parts supply business, automobile service trade business and new energy automobile business, with a total estimated net assets of RMB 29,118,756,830.05, all of which entered the listed companies, achieving more than 99% assets listing.
In order to reflect the changes in the company’s assets and scale after the completion of the transaction, the abbreviation of Shanghai Automobile Company was changed to "SAIC", and the full name and securities code remained unchanged.
Through this reorganization, the parts business and service trade sector entered the new SAIC, which extended the business industrial chain of listed companies upstream and downstream. "This is to enable the company to open up new and broader profit space and enhance the medium and long-term competitiveness and risk resistance of listed companies." Gu Feng, chief financial officer of SAIC, said.
Wang Liusheng, a senior analyst of China Merchants Securities (600999), commented on this: "The Shanghai State-owned Assets Supervision and Administration Commission is directly holding shares, and the mechanism of Shanghai’s automobile securitization rate will be more flexible."
As institutions are generally optimistic about SAIC’s overall prospects after listing, "Shanghai Auto" has shown an upward trend for two consecutive trading days. On December 30, 2011, Shanghai Auto closed at 14.14 yuan, up 1.87% on that day.
The reorganization of Shanghai Auto is the first step of Shanghai’s large-scale state-owned securitization plan. "SAIC’s model will become one of the reference templates for the overall listing of Shanghai state-owned assets in the future." An insider of Shanghai SASAC told reporters.
The overall listing of Shanghai Auto is very rapid. From the suspension of trading in February last year to the reorganization of the audit Committee meeting on August 2 last year, it took only half a year for SAIC to go public all day. Because of the outstanding achievements in restructuring, on December 20th last year, SAIC also won the typical M&A case award issued by Shanghai Stock Exchange.
There are three main modes of direct holding of state-owned assets in Shanghai. One mode is to hold the group’s "empty shell", that is, the group still retains its business, but all its business enters the listed company; Second, the state-owned platform controlled by state-owned assets controls listed companies; The third mode is the cancellation of the group, which is directly controlled by Shanghai SASAC. The third mode is adopted by SAIC. At present, SAIC has been "empty shell", and the assets of the group will be gradually handed over to the Shanghai State-owned Assets Supervision and Administration Commission, and finally it will be truly de-collectivized.
"Relatively speaking, our assets are relatively clear and the parties to the integration plan are more acceptable." Gu Feng told reporters that there were not many technical problems in the whole listing process.
Profit focus: from vehicle manufacturing to service trade
"At the beginning of SAIC’s overall listing, three principles were determined, namely, integrating business, improving system and safeguarding shareholders’ rights and interests". Gu Feng revealed that a total of 16 companies entered the listed company this time, including independent parts supply business, automobile service trade business and new energy automobile related business.
"Before that, the focus of Shanghai Auto was mainly on the manufacturing link in the middle of the industrial chain. Through this restructuring, the parts business and service trade sectors have entered Shanghai Auto, which will extend the business industry chain of Shanghai Auto upstream and downstream, which will open up new and broader profit space for the company. " Gu Feng told reporters.
The service and trade department is a very important asset of the former SAIC, involving automobile sales, automobile finance, automobile rental, logistics, used car management and other business fields. Previously, it has been listed as an important part of core business and core competitiveness by SAIC in response to the transformation requirements of Shanghai and the development trend of the world automobile industry.
In 2010, the operating income of SAIC’s service trade business exceeded 40 billion yuan, an increase of 230% over the end of the Tenth Five-Year Plan, a profit increase of 635%, and a return on net assets from 1.7% to 14%.
Shen Yin Wanguo’s latest report also pointed out that the profit of the service trade business injected this time was 1.1 billion yuan, accounting for only 6.7% of the total amount after the reorganization, and there is much room for growth in the future.
The key components of Huayu Automobile, such as drive motor, electric steering gear, electronic air conditioner, etc., will be injected into listed companies together, which will play a synergistic effect with the new energy businesses such as Jiexin and Jieneng under Shanghai Automobile. The new energy automobile business will be unified on the platform of Shanghai Automobile, which will help SAIC to integrate the key new energy technologies accumulated by the Group with the whole vehicle and parts business. After cultivation and development, it is expected to become a new profit growth point in the future.
How to supervise state-owned assets is the key to the market outlook.
As all the business of the Group entered the listed company, the company adjusted its administrative organization to meet the needs of the company’s operation and management after reorganization. The reporter learned that the adjusted administrative organization includes thirteen departments and three rooms. At the same time, in order to meet the needs of the company’s business development after reorganization, a new branch, Shanghai Automotive Group Co., Ltd. Training Center, was established, specializing in business-related training.
SAIC listed as a whole: SASAC took over the assets of the group.
The newly added functional departments are mainly Service Trade Division, Asset Management Department and Safety Supervision Department. At the same time, the personnel integration of SAIC is also in progress, waiting for the final approval of the board of directors and the shareholders’ meeting. The overall idea is that the leadership of the former SAIC and SAIC Motor will be merged into one.
In December 2006, SAIC Motor acquired the whole equity, key parts and auto finance assets of the group through private placement, and realized the first round of "whole listing" of SAIC Motor. Because Shanghai Automobile hopes to have a higher concentration of business, it chose the whole vehicle and parts closely related to the whole vehicle to go public. In August 2008, SAIC listed some of its spare parts assets by borrowing the bus shares of Shanghai Jiushi Holdings, and renamed it "Huayu Automobile" (600741.SH).
This overall listing, SAIC still retains the independence of Huayu Automobile, and the status of Huayu Automobile’s independent listing remains unchanged, but the shareholder has changed from the original SAIC to the new SAIC.
After SAIC went public as a whole, for SASAC, due to the direct management through SASAC or the platform company of SASAC, the intermediate links were reduced, and the shareholders’ equity income was also greater. In addition, as the largest vehicle manufacturer in China, the overall listing of Shanghai Automobile can also be used for reference by other state-owned automobile listed companies.
"For the SASAC, the identity has changed, from the original state-owned asset manager to the shareholder of the state-owned listed company. After the SASAC directly holds shares, how to abandon the inherent state-owned management model and manage it according to the modern enterprise system is still a topic worthy of study."The industry believes that. (Text/Yu Lingling)
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