Valin Xingma Stops Acquisition of New Chufeng and Terminates Major Asset Reorganization

In order to support the local auto industry, Maanshan City, Anhui Province, intends to transfer the equity of its holding company, Valin Xingma Automobile (Group) Co., Ltd. (abbreviated to Hualing Xingma, 600375.SH), and to introduce strategic cooperation. By. The transferee can rely on the platform of the listed company, but it needs to commit to injecting commercial vehicle assets.

Valin Xingma issued an announcement on the evening of August 2 that the board meeting of the company decided to terminate the major assets reorganization, that is to terminate the acquisition of commercial vehicle assets. The transfer of the original state-controlled shareholder shares will not be affected by this, and it is currently in the approval process of the State-owned Assets Supervision and Administration Commission of the State Council.

Valin Xingma is registered in Maanshan, Anhui Province and is a major local car company. It mainly develops, manufactures and sells heavy trucks, special vehicles and auto parts. Maanshan City, a state-owned enterprise, Anhui Xingma Automobile Group Co., Ltd. (referred to as Xingma Group) is the controlling shareholder of listed companies. The Xingma Group and its subsidiary Maanshan Huashen Building Material Industry Co., Ltd. (Huashen Building Materials) held a total of 15.24% equity, and the actual controller of the listed company was the Maanshan government.

Valin Xingma previously suffered from poor operating of its main business. In 2014 and 2015, it suffered losses for two consecutive years. In April 2016, it was issued a delisting risk warning. In 2016, the company injects approximately RMB 360 million into Maanshan government's subsidy. The company realized a net profit of 75.44 million yuan, turning losses into profits, and removed the cap this year. The stock abbreviation changed from “*ST Xingma” to “Huailing Xingma”. .

Valin Xingma has ceased trading since March 2 this year. On June 26 of this year, Xingma Group and Huashen Building Materials agreed to transfer the state-owned equity to the central government China Hengtian Group Co., Ltd. (referred to as the Hengtian Group) through a public solicitation of transferees, with a total of approximately 84.68 million shares transferred. 600 million yuan. As a result, the controlling shareholder of Hualing Xingma listed company was changed from Xingma Group to Hengtian Group, and the actual controller was changed from Maanshan Municipal People's Government to State-owned Assets Supervision and Administration Commission of the State Council.

The two parties also plan to install the Hubei New Chufeng Automobile Co., Ltd., a subsidiary of the Hengtian Group (“Xinchu Feng”), into the listed company. New Chufeng was established in 2007 and its main revenue comes from sales of new energy commercial vehicles. According to the official website, as of now, Hengtian New Chufeng has 23 models selected in the 2017 recommended list of new energy vehicle promotion and application models, involving pure electric vans, pure electric buses, pure electric sales vehicles and so on.

On June 30, 2017, Valin Xingma signed a framework agreement with Hengtian Group, Hengtian Automobile Group Co., Ltd., a wholly-owned subsidiary of Hengtian Group, Suizhou City Investment Group Co., Ltd. and Suizhou Zengdu Urban Development Investment Co., Ltd. The company will purchase 100% of the shares of Xinchufeng by paying cash and/or issuing shares.

According to the original plan, in addition to the equity transfer, New Chu Feng also needs to complete preparations for capital increase and divestiture of assets. In June 2017, the Hengtian Group made cash and debt-to-equity swaps for New Chufeng Motor. The stripping of GINAF's mining truck business is still in progress.

However, at present, this reorganization has been terminated, and the reason for the change of plan is the “operating end”. On December 30 last year, the Ministry of Finance and other four ministries issued the Notice on Adjusting the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles, which stipulates that new energy vehicles purchased by non-individual users should apply for subsidies, and the accumulated mileage must reach 30,000 kilometers. Except for special vehicles, the subsidy standards and technical requirements shall be implemented in accordance with the vehicle's annual driving license. (For details, please refer to “New Energy Vehicle Subsidy Adjustment Program announced to prevent fraudulent compensation”)

The aforementioned policy adjustments have caused a wave of waves, which means that whether the country’s subsidy is issued is related to whether the operator has reached “30,000 kilometers”. At present, the new Chu Feng has not announced the specific business scale. According to public information, on March 7th this year, Hengtian Group and China's Watermar New Energy Automobile Industry Innovation Alliance formally signed an agreement to jointly promote the sales of 20,000 Voltima-powered electric commercial vehicles to the market. Chu Feng will purchase 20,000 sets of power batteries from Shenzhen Waterma Battery Co., the core enterprise of the alliance.

Shenzhen Xinwo Yunli Automobile Co., Ltd. (abbreviated as Xinwo Yunli) is a core member of the aforementioned alliance. The actual operation of the company is currently facing challenges. In the main cities, there are some vehicles idle, according to the listed company Shaanxi Jianruiwo Energy Co., Ltd. ( The abbreviated Jianruiwoeng, 300116.SZ) disclosed that about 7,000 idle vehicles were used by Xinwolift and 8,000 were actually operated. The reason for the idleness is that the right-of-way policies and supporting facilities in various places are not timely followed up.

The same as the new Chu Feng as an automobile factory, and the alliance to produce electric commercial vehicles, as well as Dayun Motor Co., Ltd.. According to the 2016 annual report released by Universiade on April 21, 2016, the new energy electric vehicle produced by the Universiade achieved 5696 external sales, and the customers were all non-individual users. Considering the current operating conditions of the vehicles, for the sake of prudence, the income and profit realized by the company's new energy electric vehicle sales in 2016 will not be confirmed temporarily.

Valin Xingma also indicated in the termination announcement that the new Chufeng wind business conditions: New Chufeng Automobile's current new energy commercial vehicle product orders are in good condition, but the new energy automobile policy after the adjustment of the operation time is relatively short, the target The company's business development and operating performance still need time to further improve.

Valin Xingma said that the current conditions for promoting reorganization are not yet mature, so it was decided to terminate this major restructuring merger and acquisition. It is planned to apply for resumption of trading after an investor briefing is held.