Asset plan drives SAIC shares up
By Jin Jing |
April 7, 2011, Thursday
|
Print Edition
Print Edition
SHARES of SAIC Motor Co edged up yesterday after its parent, Shanghai Automotive Industry Corp (Group), announced a plan to inject assets into the listed unit as part of a group consolidation.
The Chinese partner of General Motors Corp and Volkswagen will receive auto assets valued at 28.6 billion yuan (US$4.4 billion) from its parent through issuing 1.73 billion shares at 16.5 yuan, according to its statement filed to the Shanghai Stock Exchange yesterday.
The assets to be injected include parts making, trade and service in addition to new-energy car operations, the statement added.
SAIC Group will increase its stake in SAIC Motor from 72.95 percent to 77.21 percent.
"The restructuring allows SAIC to reach the higher end of the industrial chain and will improve efficiency," said Wang De'an, an analyst at Pingan Securities Co. "It paves the way to boost development of self-branded cars and new energy vehicles, which will drive profitability and competitiveness in the long term."
Shares of SAIC Motor gained 0.16 percent to 18.48 yuan yesterday.
Its shares and those of Huayu Automotive Systems Co, another affiliate of the group, had been suspended since February 14. SAIC Motor will take over its parent's interest in Huayu Automotive under the proposal.
Shanghai-based SAIC is the nation's biggest auto maker. Last year, it sold 3.58 million vehicles, an annual rise of 31.5 percent.
Its 2010 net profit more than doubled to 13.7 billion yuan from that in 2009.
Chen Hong, president of SAIC, earlier said the auto maker still aims to sell 4 million units this year and estimated the overall market to grow 10 percent.
The Chinese partner of General Motors Corp and Volkswagen will receive auto assets valued at 28.6 billion yuan (US$4.4 billion) from its parent through issuing 1.73 billion shares at 16.5 yuan, according to its statement filed to the Shanghai Stock Exchange yesterday.
The assets to be injected include parts making, trade and service in addition to new-energy car operations, the statement added.
SAIC Group will increase its stake in SAIC Motor from 72.95 percent to 77.21 percent.
"The restructuring allows SAIC to reach the higher end of the industrial chain and will improve efficiency," said Wang De'an, an analyst at Pingan Securities Co. "It paves the way to boost development of self-branded cars and new energy vehicles, which will drive profitability and competitiveness in the long term."
Shares of SAIC Motor gained 0.16 percent to 18.48 yuan yesterday.
Its shares and those of Huayu Automotive Systems Co, another affiliate of the group, had been suspended since February 14. SAIC Motor will take over its parent's interest in Huayu Automotive under the proposal.
Shanghai-based SAIC is the nation's biggest auto maker. Last year, it sold 3.58 million vehicles, an annual rise of 31.5 percent.
Its 2010 net profit more than doubled to 13.7 billion yuan from that in 2009.
Chen Hong, president of SAIC, earlier said the auto maker still aims to sell 4 million units this year and estimated the overall market to grow 10 percent.
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