Dongfeng Motor Transfers 80% of Real Estate Company's Shares

At the beginning of December, news of FAW, Dongfeng and Chang’an signing the strategic cooperation framework agreement once again brought the three automobile central enterprises to the people's attention. Compared to Changan and FAW, which are frequent actions this year, Dongfeng seems to be slightly low-key.

However, the "Securities Daily" reporter recently learned from the Shanghai United Assets and Equity Exchange that at present, Dongfeng Motor intends to sell about 87.2 billion yuan of its 100% controlled Dongfeng Motor Real Estate Co., Ltd. (hereinafter referred to as Dongfeng Real Estate) 80% equity.

Combined with the previous action of transferring 85% equity of Dongfeng Industrial and advancing the internal "three-for-one, one-industry" reform, the process of divesting the non-core business of Dongfeng Motor is gradually advancing.

In response, analysts who declined to be named told reporters that such an approach would allow Dongfeng Motor to “play lightly” and use a more market-oriented approach to activate the company. In his view, “the main business is doing well, state-owned assets. It is natural to preserve and increase value."

872 million yuan in the transfer of shares

On December 1, Dongfeng Motors listed 80% equity of Dongfeng Real Estate and the listing price was approximately 872 million yuan.

According to the project information, Dongfeng Real Estate is 100% owned by Dongfeng Motor Company. In 2016, its operating income was 337 million yuan and its net profit was 414.82 million yuan. As of October 30, its operating revenue for 2017 was 109 million yuan and its net profit was 8,906,400 yuan.

In the column of major creditor's rights and debts, it indicates that as of the valuation date, Dongfeng Real Estate has borrowed RMB 170 million from Dongfeng Motor Finance Co., Ltd. to Dongfeng Motor Co., Ltd. with an interest rate of 4.35% per annum. The loan period is from May 17th, 2017 to May 16, 2018.

In addition, Dongfeng Real Estate still owes RMB 129 million in internal borrowings from Dongfeng Motor Company, and RMB 41.88 million in maintenance funds collected and paid for by Dongfeng Motor Company’s Shiyan Management Department, totaling RMB 170 million.

It is worth noting that according to the transfer conditions of the project, the subject company’s creditor’s rights and debts will continue to be inherited by the target company after the transfer, and the target company after the transfer will repay the above-mentioned total of 340 million yuan of debt and corresponding interest before the end of May 2018. .

At the same time, according to the transfer information, there are 3 training buildings on the Wukai Guoyong (2015) No. 72 plot in the target company's electric vehicle project, involving 48 sets of small property houses that have been allocated to employees, and the entrusting party according to local real estate market conditions. According to calculations, the compensation for temporary relocation is RMB 72,738,400. This assessment has been deducted according to the amount estimated by the company.

In addition, Wuhan Dongfeng Phoenix is ​​a housing project with a ceiling price of 4,000 yuan per square meter for the residential building; the sales target for the project is only Dongfeng Motor Company employees; 60,000 square meters are allocated for construction (two The single condominiums with the total amount of the concession contract shall be submitted to Dongfeng Motor Company without charge; 12 class kindergartens shall be provided and transferred to the Administrative Committee of the Wuhan Economic and Technological Development Zone free of charge after completion.

The "Securities Daily" reporter found in the official website of the world room, the current average price of second-hand housing Dongfeng Phoenix project is 8638 yuan / square meter, the price in November rose 2.18%.

In this regard, the company mentioned that the development of the first phase of the project has resulted in a loss. If the company continues to develop in accordance with the current construction cost and double-limited land use conditions, the project will expand losses, so the company has suspended development. Subsequent Phoenix project development companies will negotiate with the Planning Bureau on double-constrained conditions. It is currently impossible to determine whether the double limit can be canceled, or the amount of the land price that needs to be paid for by the double limit will be cancelled.

Focus on the main industry

In fact, under the background of the deepening reform of central enterprises, the process of divesting non-core businesses of Dongfeng Motor is gradually advancing.

As early as June 25 this year, Dongfeng Electric Vehicle Co., Ltd., a subsidiary of Dongfeng Motor, signed an asset transfer agreement with Dongfeng Real Estate. To transfer its investment property and land use rights in Wuhan Wuhan Economic and Technological Development Zone at a price of RMB 204 million. The company stated that the proceeds will be used as its main business R&D and investment to supplement liquidity.

At the same time, the board of directors of Dongfeng Motor pointed out that the above transactions can help affiliated companies to diversify non-core assets and investments, centralize resources and funds, and concentrate on the main business of electric vehicles.

Subsequently, on September 20 this year, Dongfeng Motor approved the transfer of 85% equity of Dongfeng Industrial Co., Ltd. (hereinafter referred to as Dongfeng Industry). It is understood that Dongfeng Industry is a collective-ownership enterprise established by Dongfeng Corporation to solve the employment problem of the family members of Dongfeng workers.

In this regard, Zhu Boshan, a research expert on state-owned assets, said that Dongfeng Motor's transfer of Dongfeng Industrial belongs to the scope of state-owned asset reform, or it has a demonstration effect on how China will deploy collectively owned enterprises.

At that time, according to Yan Yanfeng, chairman of the Dongfeng Motor Company and secretary of the Party Committee, the collective transfer and reform of the “three supply and one industry” (water supply, power supply, heating, and property management functions) were also progressed very quickly.

The reporter noted that on November 13th, Dongfeng had already considered and approved the transfer plan, it plans to transfer Dongfeng Water Services Company to Capital Group without compensation, and transferred the Dongfeng Motor Company's power department to the national power grid free of charge, and the Dongfeng Motor Company's thermal power plant will be free. Transferred to Beijing Energy Group.

At the same time, at the end of November, Dongfeng signed a framework agreement with China Resources Group Co., Ltd. to formally initiate the separation and transfer of Dongfeng Property Management.

In response, the above-mentioned analysts stated that under the guiding ideology of divesting bad assets, doing a good job in the main business, and guaranteeing the maintenance and appreciation of state-owned assets and other central enterprises, the separation of hospitals, utilities, and other institutions and companies by central enterprises has become an inevitable choice. It will not only reduce the burden on the "SOE-run society", optimize the allocation of social resources, but also help state-owned enterprises to focus on their main business.

He said that by peeling off the auxiliary business and focusing on the main business, it also provided the conditions for Dongfeng Motor to go light.