Trading halted for Shanghai-listed shares

SAIC Motor Halts Shares Pending Sale of New Stock

June 19 (Bloomberg) -- SAIC Motor Corp., China’s largest domestic carmaker, said trading in its Shanghai-listed shares will be halted June 21 pending an announcement about a share placement to be reviewed by its board within a week.

China, which surpassed the U.S. as the world’s largest vehicle market last year, is encouraging domestic automakers to develop their own brands and alternative-energy technology to compete with global rivals including Ford Motor Co. and Toyota Motor Co. SAIC, which owns the British Rover and MG sports-car brands, debuted its E1 electric concept car at the Beijing auto show in April.

“Fundraising is of great importance to SAIC right now as it needs to develop next-generation models for its Roewe and MG brands,” John Zeng, a Shanghai-based analyst with IHS Global Insight, said in a phone interview today. “It is also in talks with General Motors to buy next-generation technology for the Buick LaCrosse and it needs money to build a plant in Wuxi after the LDV purchase in the U.K.”

MG Cars

SAIC re-branded Rover cars in China as Roewe after taking over the design rights in 2005. It plans to start making MG brand cars at its plant in the U.K. by the end of this year, spokeswoman Zhu Xiangjun said in January.

The company said in October it planned to buy equipment from LDV Group Ltd. and move some tooling to China after the U.K. vanmaker collapsed and was sold to Eco Concept Ltd.

The Shanghai-based company aims to sell more than 3 million vehicles this year, and achieve sales of 245 billion yuan ($36 billion) compared with 140 billion yuan in 2009, according to a filing to the Shanghai stock exchange on April 1. SAIC’s May sales rose 26 percent from a year earlier to 289,239 units, the automaker said on June 7.

Most of SAIC’s vehicles are made with its partners GM and VW. The company aims to sell 180,000 of its own brand vehicles this year, President Chen Hong said in March.

The automaker’s shares have dropped 40.1 percent to 12.05 yuan since the beginning of this year compared with a 23 percent decline in the benchmark Shanghai Composite Index. They fell 3.8 percent yesterday.

Shanghai Automotive directed additional size or nearly 10 billion refinancing

According to "21st Century Business Herald" quoted informed sources, the Shanghai Automotive (600104?. SH) is a non-public offering plan "financing amount up to nearly 100 million yuan."

Additional issues in organizing orientation, Shanghai Automotive has been suspended since June 21, company said in the June 25 announcement related issues, to apply for restoration.

"Shanghai Automotive's main purpose of this round of re-financing is still to develop their own brands and new energy vehicles." Shanghai Automotive to informed sources said, after the acquisition of Nanjing Auto, MG has already invested more than 40 million, while the follow-up to invest at least 6.0 billion to build the brand.

In a quoted statement, said Chen Hong, president Shanghai Automotive, SAIC faces more products and more projects, the overall comparison in terms of resource scarcity. Therefore we must consider how to improve resource utilization.

Of the sister of the MG brand, Roewe, Chen Hong said the "important thing is not size, but on the strong high-end value chain," which require technical innovations and require significant capital investment. In addition, SAIC also wants the network of its own brand lines as soon as possible to cover 34 cities.

December 19, 2007, Shanghai Automotive has released a total of 6,100,000,000 yuan warrants, as this period is SAIC shares falling, causing investors to abandon its rights. In early 2010, closing at January 7, only 3.92 million copies of " SAIC CWB1 "The successful exercise of warrants.

Last year, when the issue of warrants, the funds raised will be used for construction of two independent brands, mergers and acquisitions of passenger cars, Shanghai Automotive Technology Center R & D equipment investment, and commercial vehicles merger and acquisition projects including LDV. It is reported that, in addition to the original project financing, this will also add two new investment projects, mainly related to new energy-related, because the project increases, the Shanghai Automotive corresponding increase in the amount of financing, in last year's 61 billion, based on expected increased to nearly 10 billion yuan.

SAIC Aims to Raise 10 Billion Yuan in Share Sale

June 25 (Bloomberg) -- SAIC Motor Corp., China’s largest domestic carmaker, aims to raise as much as 10 billion yuan ($1.47 billion) in a private share placement to expand in the world’s biggest auto market by developing own-brand vehicles.

The company will sell as many as 900 million yuan- denominated A shares, and its parent company, Shanghai Automotive Industry Corp. (Group), agreed to buy at least 10 percent of the shares for 1 billion yuan or more, the automaker said in a statement late yesterday to the Shanghai stock exchange.

Producing more of its own-brand vehicles may help Shanghai-based SAIC reduce dependence on ventures with General Motors Co. and Volkswagen AG that account for most of its sales. China, which surpassed the U.S. in auto sales last year, is encouraging domestic automakers to develop their own brands and alternative-energy technology.

“SAIC may sell the most cars in China, but they’ve been relying on their ventures with overseas partners and haven’t developed their own brands,” said Liu Lixi, an analyst at Northeast Securities Co. “Their peers have been developing their own brands for the past decade.”

SAIC rose 1.9 percent to 12.28 yuan as of 10:26 a.m. in Shanghai. The shares resumed trading today after being suspended since June 18.

Sales Target

The carmaker aims to sell 180,000 of its own-brand vehicles this year, President Chen Hong said in March. By comparison, the company’s overall sales target is 3 million.

SAIC owns the British Rover and MG sports-car brands and renamed Rover cars in China as Roewe after taking over the design rights in 2005. It plans to start making MG cars at its plant in the U.K. by the end of this year, spokeswoman Zhu Xiangjun said in January.

SAIC aims to boost revenue to 245 billion yuan this year from 140 billion yuan in 2009, according to a filing to the Shanghai stock exchange on April 1.

The company’s vehicle sales rose 26 percent from a year earlier to 289,239 in May, the automaker said on June 7. Demand in China for automobiles, including the Buick Excelle compact sedans SAIC makes with GM and Sunshine minivans produced by its SAIC-GM-Wuling unit, helped the Chinese automaker boost first-quarter profit more than fourfold to 2.88 billion yuan.

“Fundraising is of great importance to SAIC right now as it needs to develop next-generation models for its Roewe and MG brands,” John Zeng, a Shanghai-based analyst at IHS Global Insight, said in a phone interview on June 19.

Capital increase convertion SAIC 55 billion enrich the brand

Recently, Shanghai automobile in the stop plate 5 days after the publication of the notice of said company financing to non-publicly issued not more than 9 million A shares. This issue of shares of the issuing price not lower than $ 11.47/unit. This also means that SAIC plans through non-disclosure of the issue of new shares for no more than RMB 100 million (US $ 14.7 million), and the proceeds of the financing will be used to enhance the competitiveness of the company's proprietary brand cars and new energy vehicle research and development capabilities.

　　This reporter has learned that all the funds collected, will be used for its own brand passenger car investment projects, proprietary brand commercial vehicle investment projects, dual-clutch automatic transmission Assembly project, technical center construction phase of the project. Where to invest its own brand of 35.06 million passenger car project (phase II), in order to invest own brand 20.25 million passenger vehicle research and development projects; to 11.785 billion for own brand commercial vehicle investment projects; to 5.965 billion for dual-clutch automatic transmission Assembly projects; to 26.94 billion for the construction phase of the project Technical Center. The total amount of funds needed to 106.86 billion, raised funds to be invested amount is 100 million Yuan.

　　In the joint ventures with GM and Volkswagen after many years of cooperation with SAIC, in recent years the focus has turned to the MG and Roewe, represented by SAIC brand, and gradually from red to the today's balance of payments. J.D. Power data showed that as at 31 May of the first five months of this year, soaring Roewe car sales reached to 89%, exceeding earlier 49941 national car sales growth of 53%. Shanghai automobile may total sales automotive 289239 units, an increase of 26.1%.

SAIC independent development financing is the blood


SAIC concept car — leaves


　　In the merger and reorganization and autonomous development funding pressures, SAIC has been selected as the independent development financing. Recently, the reporter learned from the SAIC, SAIC in the next few years will further enhance innovation and local community development capabilities, to promote innovation and new energy-saving development of traditional products, 2014 SAIC group only in the own brand-building on the accumulated investment will reach $ 17 billion.

　　Previously, Shanghai Automotive announcement that the company 2010 annual non-publicly issued A share plan to issue shares to A share of the total funds raised less than $ 10 billion into its own brand passenger car, commercial vehicle construction, clutch parts, etc.

　　It is understood that this raised funds will be used for its own brand passenger cars 60.471 billion of investment projects, commercial vehicle brands 11.785 billion of investment projects, the dual-clutch automatic transmission Assembly project 6.565 billion and technical center construction phase of the project, a total of $ 28.040 raise $ 10 billion.

　　In fact, in the face of increasing the size of the Chinese automobile market and the competitive environment of intense and complex, even well-established domestic automobile Enterprise merger and reorganization of SAIC is also and autonomous development of the financial pressure on frustration.

　　Shanghai Auto show to previous annual reports, SAIC will plan to invest $ 5 billion for the merger and reorganization, and subsequently, SAIC has also formed a project group, intends to shared Kunming yunnei power co., Ltd. of car diesel engine business. But Shanghai Automotive announcement soon, we promise in the next 3 months on cloud dynamic no significant assets reorganization plan.

　　SAIC-an insiders told reporters that "at present and dynamic cooperation within the cloud is limited to the diesel engine business, SAIC is now facing products and projects, the overall resources is relatively scarce".

　　Industry analysts believe that SAIC in 50 billion of costs, which are used for passenger vehicles up to a maximum of 30 billion yuan, commercial vehicle up to $ 2 billion. While the cloud within the power of the net assets is 25 billion, SAIC even if funds are also far exceed the original budget.

　　At the same time, a person close to SAIC told reporters that SAIC brand this year plans to achieve 100% growth. Current SAIC has been initially set up its own brand of global research and development framework, therefore autonomous development fund demand natural pressure is not small.

　　In independent innovation of SAIC revealed plans for the next few years, every year at least 10 billion investment for its own brand-building.

　　Concern is, in the collection of funds of the investment project in its own brand passenger car investment projects, technical center construction phase of the project will cost more, the project intends to invest funds at 55.31 billion and $ 26.94 billion.

　　Statistics show that the first five months of this year, the cumulative sales vehicles SAIC 148.7 million units, including independent brand car sales accumulated 63915, despite increased momentum, but always with the future implementation of year sales of 50 million falls far short of the goal.

　　In accordance with SAIC plans, new Shanghai Automotive Technology Center fully completed first stage project, phase II project is to speed up the building. In research and development teams, SAIC brand within five years of research and development team of scale will reach more than 3000 people, equipped with simultaneous 2-3 new product development, 10-12 small and medium-sized remodel project development, 10% of the existing product maintenance of technological capabilities. In the last month, the SAIC group has established the Birmingham bridge MG UK design center as SAIC's global headquarters is responsible for the design, brand design mg models and research and development.

　　The industry believes that with respect to passenger cars and buying resources dwindle, SAIC in brand development strategy will primarily rely on "itself". Invest huge sums of money to further enhance the ability of research and development of brands and brand influence, is a solid upgrade brand impact and feasibility of market share.

At the same time, a person close to SAIC told reporters that SAIC brand this year plans to achieve 100% growth. Current SAIC has been initially set up its own brand of global research and development framework, therefore autonomous development fund demand natural pressure is not small.

Concern is, in the collection of funds of the investment project in its own brand passenger car investment projects, technical center construction phase of the project will cost more, the project intends to invest funds at 55.31 billion and $ 26.94 billion.

patpending wrote:I wonder what the risks are to SAIC's plans?

Image: SAIC overseas marketing strategy planning SAIC Group Vice President, recently reiterated zhoulang - "the second half of this year, MG6 will enter the European market." Shanghai Automotive CEO Chen Hong recently SAIC group internal brand planning meeting that will take place at the end of the year in the UK at SAIC Chang Qiao (Longbridge) MG6 car factory, which is expected in the first quarter of 2011 on the market. The industry generally believe that the current stage, for proprietary brand of frustrated, the European market is not paradise. Brilliance auto, Great Wall automobile, Land Breeze and the Lifan brand after several years of promoting, still not started.

SAIC, led the European prospects, MG6 looks promising. Although MG brand left England descent, but after a loss has been changed hands, until after the sale, brands and products force has more than half of European males, reunification is the consumers agree that is a great challenge.