A change in the ownership of a listed company has finally exposed the grudges and grudges of the domestic heavy-duty truck giants over the years to the public.
Last Friday, in order to dispel the concerns of investors, Wei Xuan, chairman of Weichai Power (2338.HK), which is in the midst of internal and external difficulties, publicly stated after the performance meeting held in Hong Kong that the company did not intend to raise funds in the A-share market. Or there is a plan to spin off the listing of the Hunan torch business.
A M & A "marriage" without blessings
When Tan Xuguang made this remark, it was just one year and one month from the acquisition of the Hunan Torch by Weichai Power. At that time, Weichai Power's share price in Hong Kong was 30 Hong Kong dollars, and as of last Friday, its share price has dropped to 19 Hong Kong dollars.
Insiders pointed out that although the driving force behind the drop in Weichai Power's share price was mainly due to investors' unfavorable views on the merger and acquisition of “marriage,†domestic and foreign investment banks headed by China Gold have successively published their analysis reports on the low Weichai Power. It was the trigger for the wave of selling.
In mid-January 2006, a research report by Tian Jindong, a China-based gold industry analyst, was widely circulated on the market. In this English-language research report titled "Weichai is Probably Will Lose Its Largest Customer," the analyst relentlessly pointed out that in 2006, Weichai may lose its largest customer, Sinotruk (000951.SZ). Therefore, "we will reduce engine sales forecast for Weichai for 2005 and 2006 by 2% and 18%, respectively."
After the report was reported, Weichai Power lost the market value of HK$528 million due to the stock price crash on the first day of January 13.
Mergers and Acquisitions Triggered by Parents and Subsidiaries
Soon, this wave of questioning continued to spread, and Morgan Stanley, Goldman Sachs, and others also issued ratings reports that weighed on Weichai Power's share price.
"This series of events is not a coincidence." An analyst expressed his opinion. In his opinion, China National Gold is an important partner of Sinotruk, not only its sponsor of the share reform, but also the entire overseas group of Sinotruk Group. Listed lead underwriters.
“At that time, the torch relay had disclosed the hurricane with Weichai Power at the news conference on share reform. The sponsors of Sinotruk published an unfavorable report at this time, which meant it was quite interesting,†said the analyst.
It is understood that Weichai Power and China National Heavy Duty Truck Group Sinotruk Group's "grudges" has a long history. Prior to the formal breakdown of the relationship on March 20, 2006, Weichai Power and Sinotruk Group were the parent companies. Sinotruk Group wholly owned Weichai Power, the parent company of Weichai Power. Judging from the equity relationship, Weichai Power is the “Sun†company of CNHTC.
“It is no longer a secret that there has been a grudge between the industry’s Weichai Power Manager Tan Xuguang and the family of China National Heavy Duty Truck Group Ma Chunji,†said one person familiar with the matter.
"Resistence" has long been buried
According to people familiar with the matter, the contradiction between Tan Xuguang and Ma Chunji has already begun as early as 2 years ago. In March 2004, after the successful listing of Weichai Power in Hong Kong, Tan Xuguang’s “independence†will become stronger and stronger.
“The goal of Ma Chunji is to rely on the two pillars of Sinotruk and Weichai Power to open up the upstream and downstream industrial chains and expand the heavy-duty automotive industry. Tan Xuguang, however, is unwilling to yield to people and wants to be independent and independent.†He also revealed that another important reason that ultimately caused the two people to become incompatible is that “Tan Xuguang wants to implement MBO.â€
It is precisely because of the above plan that when the Chinese group wanted to use the “shell†of Weichai Power to achieve the overall listing in Hong Kong at the beginning of 2005, it was rejected by Tan Xuguang and the contradictions between the two sides further deepened.
When Tan Xuguang acquired the torch of Hunan in August 2005 through its subsidiary Weichai Investment and indirectly controlled Shaanxi Heavy Duty Truck, the contradictions between the two sides have been made public.
“Shanxi CNHTC and Sinotruk were originally one company, which was a subordinate enterprise and later reorganized due to serious losses. It was divided into three parts: China National Heavy Duty Truck (Jinan), Shaanxi Heavy Duty Truck and Chongqing Heavy Duty Truck. Since then, these three have become competitors.†Zhang Hongji, a veteran of securities, described the origins.
It is understood that before Weichai Power acquired the Hunan Torch, it did not receive approval from Sinotruk Group. When Tan Xuguang “privately†acquired the Hunan Torch, and then controlled an important competitor of CNHTC Group, Shaanxi Heavy Duty Truck, its division was resistant to the ceremony. The heart is already clear.
This directly led to the subsequent breakdown of the relationship between the two parties. According to statistics, in January 2006, CNHTC stopped purchasing engines from Weichai Power, and the relationship between the two parties was completely broken. On March 20, 2006, the State-owned Assets Supervision and Administration Commission of Shandong formally released the equity relationship between the two companies.
Weichai Power Suffered Financial Crisis
"Independence needs to pay a price." Zhang Hongji pointed out that Weichai Power, which has been separated from China National Heavy Duty Truck Group, is now under heavy financial pressure.
First of all, before "independence", more than 40% of Weichai Power's contracts came from China National Heavy Duty Truck Group's procurement, which made Weichai Power face a dilemma of falling sales.
Secondly, the acquisition of the Hunan Torch from Huarong’s hands consumes a large amount of money from Weichai Power. According to the statistics, for the 28.12% stake in Hunan Torch (000549), “Weichai Department†paid a 620 million yuan price, and at the same time purchased Xinjiang Delong Affiliated Company with a book value of more than 400 million yuan in bonds, and the actual investment was equivalent to 1.023 billion yuan. yuan. This investment alone drove Huichai Power to spend HK$1.05 billion in Hong Kong IPO in March 2004.
In addition, according to industry sources, Tan Xuguang's engine park project, which he has been proud of, has not run as expected after investing nearly 3 billion yuan in huge amounts. As a result, the Weichai Department owed a large amount of construction funds and faced a series of legal issues.
Zhang Hongji also stated that Tan Xuguang’s heavy injection of indirect control of Shaanxi Heavy Gas may recapture the independence of Weichai Power. It is said that the local government of Shaanxi Shouqi does not want its leading company to be controlled by foreign capital. This is the biggest concern Tan Xuguang faces.
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