Placement shrink Great Wall "New Energy + car" Consequently

Posted on 10/26/2015 11:16:01 AM

It has been "focused" on the SUV Great Wall Motor recently released constantly "reset car project" signal, but the main funding for the development of new energy cars, but before raising began Difficult.
Recently, Great Wall Motor issued "on the adjustment of non-public offering of A shares issue price and issue number of bulletin" to use the non-public offering (listed companies to meet the requirements of a minority of non-public offering specific investors, also known as private placement ) issue price and the number of A shares are to be adjusted. Since July 11 disclosure of private placement to raise funds feasibility study report, this is the third release of the Great Wall automobile-related adjustment statement.
Great Wall Motor, the total funds raised from this private placement 16.8 billion yuan, "shrunk" to 12 billion yuan, but also to the adjustment of the issue price and quantity, whether through private placement Great Wall Automobile 12 billion yuan fund-raising success is a unknown number. But also for the development of the current SUV trapped, hope re-launch the car business through the Great Wall of new energy vehicles, the fund-raising results will undoubtedly have a major impact on the further development of the Great Wall.
"Shrink" behind
Since the private placement plan was finalized, the Great Wall car almost to this end, "a lot of trouble."
Early in the July 11 release of "Great Wall Motor sixth Earnings Release Fifth Board of Supervisors" in this private placement issue price of not less than 43.41 yuan per share, the number of issued not over 38,700.76 million, total an amount not more than 16.8 billion yuan. Although this fund-raising total has been questioned too, but the Great Wall Motor chairman Wei Jianjun in the "China Business" reporter, said: "targeted financing of 16.8 billion yuan is not the Great Leap Forward, Great Wall Motor to seize the opportunity to invest. Our strategy is to short in talent, a lot of investment projects. "
However, on August 29, Great Wall Motor has once again issued a public notice, the upper limit of the number of issued shares down to 27,643.40. This directly led to a substantial "shrink" plans to raise capital by 16.8 billion yuan dropped to 12 billion yuan.
For this adjustment, Great Wall Motor reasons given is "combined with the recent changes in the securities market, to raise funds to meet the demand", while the background of this period are: Great Wall Motor's share price fell to 20 yuan from 40 yuan.
In the case of investor confidence in the setback, even 12 billion yuan private placement is also outdated, way Great Wall Motor recently implemented in the share capital of pleasing investors based private placement to increase the probability to achieve. Cao Crane believes that the Great Wall this year's sales growth of narrow and volatile capital markets make the Great Wall shares fell seriously affect investor confidence. This is the Great Wall to be the real reason for the price of three additional investigation.
Strategic Realignment
"The investment projects are focusing on the company's main business and strategic upgrades directions for new energy vehicles, intelligent vehicles and their key components R & D, testing and production." Wei Jianjun representation.
According to Great Wall Motor in July 11 issued "the feasibility study report on the use of funds of non-public offering of A shares to raise" funds raised from this private placement will be used on the five projects, namely new energy vehicles R & D projects 5.08 billion yuan, with an annual output of 500,000 units of new energy smart transmitter projects 4 billion yuan, an annual output of 500,000 units of new energy vehicles, motors and motor controllers item 1.7 billion yuan, an annual output of 1 million units of new energy automobile power battery system Item 1 billion yuan, 5.02 billion yuan of intelligent vehicle research and development projects, the total needs 16.8 billion yuan.
"For the past two years, Great Wall Motors has been the main focus will be placed on the SUV products, or even suspend the car business, and this time to raise a lot of capital investment on new energy vehicles and intelligent automotive business, it can be said that under the new situation , with some of the strategic transformation of intent. "National Securities auto industry analyst Cao Crane chief told reporters," However, the issuance of this from a single directional 'initial' phase of view, is not very smooth. "
Statistics show that the total actual investment of the five projects planned for 17.061 billion yuan, that is, in accordance with the original plan, the Great Wall cars in the private placement completed on the basis of only about 261 million yuan and then come up with funds. After The total funds raised in the private placement program "shrink" to 12 billion yuan, 5.061 billion yuan funding gap could rise.
In this regard, the Great Wall car side said: "insufficient funds raised in part by the company's own funds or through other financing methods to solve."
Initial setback
In accordance with the original plan, Great Wall Motor to take this chance to force in the second half of this year, the new energy vehicles R & D results into products, and is expected to be launched in 2016 for the taxi and the individual market pure electric cars. In addition, medium-sized SUV Great Wall Motor will launch hybrid and plug-in models, plans launched in the second half of 2017.
As a private placement to raise funds accounted for nearly 80% of the use of planned projects, new energy strategy is clearly the Great Wall car "strategy to upgrade" the core content, in a certain sense is the main constituent of the Great Wall cars strategy adjustment. But Great Wall Motor announced a new energy strategy, but also said, "will force the car business, and access to new energy vehicles planning", announced that its car product line development effort are: conventional fuel new energy cars.
According to Wei Jianjun argument, focusing SUV is still the Great Wall Motor unswerving strategic policy, but all energy on SUV models only strategy within a period of time. After the Hover SUV to achieve substantive results, Great Wall Motor completely free hand to develop other businesses. This is perhaps paving the way for the Great Wall again force the car business.
As a result, industry analysts believe that in the SUV market growth has been narrowing in the background, the increasingly fierce market competition may have let the Great Wall Motor realized that the car is still the automobile market mainstream products, simply rely on SUV models, in the long run lack of development after the inevitable force. Thus, Great Wall Motor will choose to restart the car business, and skillfully combine it with a new energy strategy, so that its car business is not only able to use a private placement to raise funds to some extent, but also to further enrich the product matrix .
Indeed, according to Great Wall Motor, official data showed, from January to September, the cumulative sales of Great Wall Motor 586,700, an increase of 15.37%; of which, SUV sales volume cumulative 479,000, an increase of 38.35%; cumulative sales of 32,900 cars units, down 49.22 percent. It is not difficult to see, the Great Wall car sales growth slowed, actually more of a drag car products subject.
"Great Wall Motors if a comprehensive strategy adjustments, including a renewed focus on the car business, may be able to allow investors more confidence in its prospects for development. But the present situation, the Great Wall Motor want to raise 12 billion yuan through private placement funding strategic adjustment is not easy to open first, the current capital market situation is bound to increase the difficulty of the present private placement; secondly, the total funds raised Great Wall Motor is too high, probably because of the private placement program can not be implemented; and finally, Great Wall Motor Strategic adjusted several times in the past two years, will to some extent increase uncertainty for investors. "Cao Crane analysis said," This means that, even after the plan 'shrink', Great Wall Motors may not be able to do so to raise 12 billion Yuan funds, regardless of what form make up the shortfall, will affect the next strategic adjustment. "

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