The reduction in the shareholder’s shareholding in Jinbei Automobile implies significant asset integration of Brilliance Automotive Group
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On January 29, Jinbei Automobile announced that it had announced the shareholder reduction of shares, and Shenhua Holdings, which is also a listed company, ended its closing on January 27 and reduced the 8.98 million shares of Jinbei Automobile through the secondary market, which accounted for 0.78% of the total share capital. After this reduction, Shenhua Holdings holds 5428 shares of Jinbei Automobile, holding a ratio of 4.97%.
According to statistics, in January 2010, a total of 257 major shareholders of listed companies reduced their holdings, involving a total of 306.982 billion shares, with a market value of 35.71 billion yuan, and only 43 holdings.
Shenhua Holdings can reduce its holdings to only 7.28 million shares
Jinbei Automobile is the largest automobile production enterprise in Liaoning Province, and is also a large domestic light bus manufacturer.
Both Jinbei Automobile and Shenhua Holdings are the A-share listed companies of the Brilliance Automotive Group, and Brilliance Automotive Group also holds the Hong Kong-listed company Brilliance China. Shenhua Holdings has previously been the fourth largest shareholder of Jinbei Auto, and all the Jinbei Automobile shares have been listed and circulated since August 15, 2008.
In early 2009, Shenhua Holdings still held 78 million shares of Jinbei Automobile . After several reductions in the secondary market, Shenhua Holdings has now reduced the number of 23,720,000 shares of Jinbei Automobile.
According to the public announcement on shareholder pledges announced on September 11, 2009, Shenhua Holdings has pledged 47 million shares of its Jinbei Automobile shares it holds. In other words, Shenhua Holdings currently holds 5428 million shares of Jinbei Auto, leaving only 7.28 million shares available for reduction. All kinds of signs also show that Shenhua Holdings has not given up its intention to reduce its holding of Gold Cup cars.
On January 19, the announcement of the pre-addition of the performance announced by Shenhua Holdings showed that the net profit attributable to shareholders of the listed company in 2009 is expected to increase by more than 200% over the same period of last year. Shenhua Holdings’ net profit attributable to shareholders of listed companies in 2008 was RMB 3.035 billion. According to the disclosure by Shenhua Holdings, the reasons for the increase in performance include: “In 2009, the company sold some of the Gold Cup auto circulating shares and obtained higher investment returns.â€
Shenhua Holding’s equity interest in the sale of Gold Cup Motor Co., Ltd. has obtained higher investment returns, but market participants believe that this reduction may be behind the brewing of the capital operation of the Brilliance Automotive Group.
There are certain overlaps in business between Jinbei Auto , Shenhua Holdings and Brilliance China. The integration of the three companies and their overall listing have been the focus of the market.
Chairman of the Brilliance Automotive Group and Chairman of Jinbei Automobile, Yu Yumin, once stated that all three listed companies have spare parts, and that there are some adjustments and integrations necessary in terms of planning and management. However, it is not a matter of urgency for the company to adjust this item. Originally, it wanted to do this but it eventually gave up.
Withdrawal of large-value provision for preparation in 2009
Currently, Jinbei Automobile's 2009 annual report has not yet been disclosed, but market participants have already estimated that Jinbei Automobile's 2009 annual report data will “do not look good.â€
This can be seen in the 2009 Gold Cup semi-annual report. Jinbei Automobile semi-annual report showed that in the first half of the year, Jinbei Automobile achieved a net profit of -204 million yuan, a year-on-year decrease of 372%; basic earnings per share -0.187 yuan, a year-on-year decrease of 371.01%; net assets per share of 0.21 yuan, a year-on-year decrease of 47.10%. The return on net assets was -0.89%, a decrease of 10.75 percentage points from the end of the previous year.
Jinbei Automobile disclosed that its loss in the first half of 2009 was due to a loss of 189 million yuan in the investment in the associated company’s Brilliance Jinbei Investment and an increase in investment losses of the company.
At the same time, Jinbei Automobile will make provision for impairment of RMB1.6428 billion in 2009.
On October 39, 2009, Brilliance Jinbei transferred the assets, liabilities, contracts, and personnel of the Brilliance China Cup business to Brilliance Group to improve the operating profitability and sustainable development capabilities of Brilliance Jinbei .
Affected by this matter, Jinbei Automobile, which holds a 39.1% stake in Shenyang Jinbei Automobile, announced on October 31, 2009 that the company will make a provision of approximately RMB1.6428 billion for impairment and increase the amount of losses for Jinbei Automobile in 2009 accordingly.
According to the analysis, although the spin-off of the China business has an impact on the performance of Jinbei Automobile in the short term, it will be a "lightening burden for Jinbei Automobile in the long run."
Bing Yumin, chairman of Brilliance Automotive Group and chairman of Jinbei Automobile, also stated that although the business scope of Jinbei Automobile has been reduced after the business of the Chinese car was dismantled, the future profitability will be improved. Because Brilliance Automotive Group intends to expand commercial vehicles, including special vehicles, and Jinbei Automobile's main business is commercial vehicles.