BYD is stepping up its expansion. July 18, BYD sales company vice president Wang Jun, confirmed to reporters, BYD is working with the US Sunshine Bus company acquisitions negotiations, if the takeover is successful, BYD will build the country's third largest automobile production base in Changsha.
"BYD is brewing an amazing business plan, sensation will be no less than Buffett's shareholding that year, and the acquisition of the United States Sanxiang passenger car is just the tip of the iceberg of this plan." BYD relevant sources revealed.
At the same time, BYD also intends to restart the A-share plan and will submit a listing application to the Shenzhen Stock Exchange. Upon approval by the relevant authorities, BYD will allocate and issue up to 100 million A shares to the market through public issuance and allotment of new shares or other forms approved by the China Securities Regulatory Commission. The nominal value of each share will be RMB 1 and the amount of financing will be At least about 100 million yuan.
According to an announcement issued by BYD on July 16, the company's board of directors has already agreed to the A share issuance plan, but this decision has yet to be approved at the extraordinary general meeting to be held on September 21.
Getting involved in new energy buses
The Hunan Sanxiang Bus, which has a history of 54 years, was acquired by Midea Group in 2005. However, due to lack of funds and technology, the plant has been idled for eight months.
However, this lost bus factory has an infinite treasure in the eyes of BYD. If the acquisition is successful, BYD can not only directly obtain the Sanxiang's passenger vehicle production catalog, and realize the extension of the product line to the commercial vehicle sector. It can also integrate its own new energy technologies with its own implementation and cater to national incentive policies for new energy buses. And get government purchase orders.
“If the successful acquisition of the Sanxiang Bus project in the United States, we will establish a new production base in Changsha.†Wang Jianwei disclosed that BYD has formulated a clear product plan and development plan for Changsha Base and is ready to put into production a new product, currently in Shenzhen. The models produced in Xi’an and Xi’an will continue to be produced in the two places. “Specific details must be confirmed before projects are released.â€
However, according to Changsha Municipal Economic Commission’s “Changsha City's Industrial Investment Promotion in the First Half of the Year†document, Midea’s passenger car is about to enter into a transfer agreement with BYD. Subsequently, BYD’s new energy bus project will be settled in Changsha and a domestic first-class new energy passenger car plant will be built. The industrial base for parts and components has a total investment of over 2 billion yuan and an output value of more than 10 billion yuan.
Industry insiders believe that for BYD, which already has mature electric vehicle technology, leveraging national policies and starting from government procurement are undoubtedly the best choices. At present, the government's new energy incentive policies are pushing new energy buses. It has become an inevitable choice for BYD to enter the field of new energy bus manufacturing.
“At present, BYD's dual-mode electric vehicle F3 DM is purchased by the government. In addition to the Shenzhen government, the Hong Kong SAR government has also purchased two vehicles. In June, F3DM sales totaled 19 vehicles.†Wang Jianwei said that in the second half of this year, F3DM will begin to explore the personal user market, "but we are still very cautious about sales."
In contrast, new energy passenger cars will have more market space than new energy cars. In the demonstration project of the "10 cities, 1,000 vehicles" new energy passenger vehicle vigorously promoted by the country, the government will also give high financial subsidies to demonstration buses. Among them, the subsidy standard for pure electric buses is 500,000 yuan.
At present, the development goal of Shenzhen New Energy Vehicle is to strive to fully adopt new energy vehicles by 2015. As a local new energy vehicle company in Shenzhen, BYD also received a purchase order for 1,000 electric buses in Shenzhen in advance, which means BYD. If you are involved in the field of new energy buses, you will receive government subsidies of at least 6 billion yuan.
This is quite attractive to BYD. Although BYD has power battery technology, it suffers from the inability to build up its passenger car production capacity in the short term and obtains a list of passenger vehicles from the National Development and Reform Commission.
However, once the successful Sanxiang Bus acquisition project of the United States is successful, all these difficulties will be solved. In addition, BYD is able to obtain land for this purpose and achieve rapid expansion of production capacity. Wang Jianhao disclosed that with the current growth trend of BYD, Shenzhen's production capacity will soon be filled up. "In the future, land is the most difficult to sustain."
Radical expansion
According to the plan, BYD will double its sales this year, reaching 400,000 vehicles. Wang Jianhao disclosed that in the first half of this year, BYD continued its rapid growth and sold a total of 176,800 vehicles, which represented a year-on-year increase of 176%. “Completing the full-year target is not a problem.â€
By contrast, BYD’s capacity expansion plan is more radical. Currently, in addition to actively purchasing the capacity of Sanxiang in the United States, BYD is also rapidly advancing the expansion of its existing production base. According to relevant sources from BYD, after the completion of expansion, Xi'an Base and Shenzhen Base will reach a production capacity of 400,000 cars, respectively, and the total production capacity will exceed 800,000.
In addition to new energy vehicles and commercial vehicles, BYD will continue to make a difference in the fuel-car segment in the second half of the year. According to the plan, in the second half of the year, BYD will intensively introduce 5 new models such as the S8 , G3, L3, S6 and M6 . Running, mid-size sedan, SUV and MPV and other market segments.
The radical expansion strategy requires a lot of funding as support. However, BYD's 2008 annual report shows that although BYD's auto sales increased by 77% year-on-year to 8.646 billion yuan, its secondary rechargeable battery business sales fell by 13% due to the global financial crisis. With a growth rate of up to 67% in development costs, the overall net profit attributable to shareholders of the parent company decreased by 37% year-on-year.
As of the end of 2008, BYD held cash and cash equivalents in the hands of about 1.7 billion yuan, but by the end of 2007, this figure was about 5.5 billion yuan, a decline of nearly 70%.
In addition, in September last year, "stock God" Buffett's share of BYD's 1.8 billion Hong Kong dollar has not yet reached the account. "This also requires the approval of relevant departments. It is expected that the results will be produced by the end of September this year. After the approval is passed, we will deliver the amount of money," Wang Jianhao said.
With the rebound of the A-share market this year, BYD, who hopes to seek more financing channels to develop new energy vehicles, began to look for opportunities to return A shares from H shares.
In fact, in January last year, BYD began to look for opportunities to seek listing on the A-share market. In March of the same year, the plan was approved by the shareholders meeting, but due to the poor performance of the 2008 A-shares market and the strict approval of the relevant regulatory authorities. The impact of judicial disputes and other multiple factors, BYD failed to complete the plan to issue A shares on schedule.
“The approval passed by the shareholders’ meeting last year expired on March 19 this year. The restart of the BYD’s A-share issuance plan needs to regain the approval of the shareholders. It is expected that there will be results by the end of September,†Wang Jianhao said.
According to reports, the funds raised by BYD's issuance of A-shares will be mainly used to allocate funds for BYD's lithium-ion battery production, automotive R&D, expansion of automotive products, auto parts and solar cell projects, and its 2008 A-share fundraising use. The biggest difference is that solar cells have replaced LED light bars and camera module projects.
As for the recent rumors of BYD A shares raising funds to build subway locomotives, Wang Jianyi made a clear response and there was absolutely no such thing.
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