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The fighting finally ended
In the same company as the enterprises in Shandong Province, the equity dispute between China Heavy Duty Truck Group Co., Ltd. (abbreviated as China National Heavy Duty Truck) and Weifang Diesel Engine Factory (referred to as Weichai Factory) reached the peak at the end of last year. At that time, Sinotruk held 100% of the Weichai plant, and Weichai Factory was the controlling shareholder of Weichai Power (2338.HK), a Hong Kong-listed company. Therefore, the Weichai plant has always wanted to separate from China National Heavy Duty Truck Co., Ltd. Sinotruk is not willing to let go of the Weichai plant, and hopes to be tied with Weichai Power to achieve the overall listing of Sinotruk in Hong Kong.
On March 20, 2006, the Shandong State-owned Assets Supervision and Administration Commission issued a document stating that the 100% Weichai plant equity held by China National Heavy Duty Truck was transferred to the direct ownership of Shandong Provincial State-owned Assets Supervision and Administration Commission. 100% equity of the company. The move announced that the long-term dispute over the one-year-long ownership of China National Heavy Duty Truck and Weichai Power Plant has finally come to an end.
Once China National Heavy Duty Truck and Weichai Power Plant, which were once formed with a planned economy, joined hands to complete the goal of realizing the country’s independent manufacturing of heavy trucks, they are now diverging for their own interests. The two companies are actively building their respective industrial development chains.
Gratuitous transfer of Weichai factory shares
In a document issued on March 20, the Shandong State-owned Assets Supervision and Administration Commission pointed out that in order to support the listing of China National Heavy Duty Trucks Red Chips and resolve the issue of competition between China National Heavy Duty Truck and Weichai Power Plant in heavy-duty truck diesel engines and heavy trucks, the Shandong Provincial SASAC Approved the transfer of all the property rights of Weichai Factory held by China National Heavy Duty Truck to the immediate possession of the Shandong State-owned Assets Supervision and Administration Commission. Weichai plant formally separated from China National Heavy Duty Truck.
Before the transfer, the equities ratio structure is that the Shandong State-owned Assets Supervision and Administration Commission holds a 100% stake in Sinotruk and China National Heavy Duty Truck holds a 100% stake in Weichai. After the equity transfer is completed, the Shandong State-owned Assets Supervision and Administration Commission will directly receive the entire shareholding of the Weichai plant held by the former China National Heavy Duty Truck, which means that the Shandong State-owned Assets Supervision and Administration Commission currently holds a 100% stake in the Weichai plant. At the same time, Weichai Factory holds a 23.53% stake in Weichai Power. After being completely separated from the Weichai Department, China National Heavy Duty Truck Co., Ltd.'s original content of "China National Heavy Duty Power holds Hong Kong listed company as Weichai Power" and other related content will be erased.
According to an information source who came into contact with the equity transfer program, although the Shandong State-owned Assets Supervision and Administration Commission promulgated a document on March 20 to announce the separation of Sinotruk and Weichai Factory, it was actually back in 2006 New Year's Day. Cleared by the manager, but not publicly announced. As of the time of press release, the details of the equity transfer have not yet been announced to the outside world.
Regarding the concerns of the external Weichai plant from the "costs" of China National Heavy Duty Truck, the above sources told reporters that the equity transfer is within the normal scope of the transfer of state-owned assets, Weichai plant did not carry out any "compensation of China National Heavy Duty Truck" “Because the two companies are currently wholly-owned subsidiaries of the Shandong State-owned Assets Supervision and Administration Commission, and they are state-owned assets.
The reporter was informed that at present, there are only a few accounts left between China National Heavy Duty Trucks and Weichai Power Plant that have not been sorted out, including the sales of engine owed by China National Heavy Duty Truck to Weichai, and the profits that Weichai Plant should turn in as a subsidiary. . Sources said that these issues still need to be coordinated by the Shandong Provincial State-owned Assets Supervision and Administration Commission. "It will take a while to solve the problem. As for the specific amount, I will not disclose it."
The cost of breaking up
The split between China National Heavy Duty Truck and Weichai Power Plant is the result of intensified contradictions between the two sides. It will be difficult to predict what kind of situation will be created after the breakup. However, some market signals have become clues. At present, both parties are actively building an independent truck industry chain.
After Weichai Power formally stopped supplying engines to Sinotruk last December, Weichai Power's shares had experienced a downturn, and currently the truck engines produced by Weichai Power are still in decline.
Prior to the formal separation, Sinotruk has been the largest customer of Weichai Power. It annually purchases 50,000 sets of Weichai engines, which accounts for nearly 40% of Weichai's engine sales and purchases of about 2 billion yuan. According to China National Heavy Duty Truck, its sales target for 2006 is 60,000 vehicles. For Weichai Power, this year's situation will be very difficult.
Judging from the current situation of China's heavy truck market, FAW's liberation uses the Xichai engine. Dongfeng uses the Dongfeng Cummins engine. This means that currently the top three companies in the domestic heavy truck market do not use Weichai engines. The negative impact of splitting on Weichai power is difficult to eliminate in a short time.
For Sinotruk, the negative impact also exists.
Although China National Heavy Duty Truck Zhangqiu Engine Plant has been put into production, China National Heavy Duty Truck has paid a huge price for the new Zhangqiu engine plant. According to report, China National Heavy Duty Truck invested RMB 1 billion in this project, and its planned production capacity is 30,000 to 50,000 units. Informed sources said that if there is no conflict with the Weichai plant, then Sinotruck may not spend so much manpower and financial resources to set up an engine plant.
In September 2005, Weichai Power acquired the 28% equity of Hunan Torch through its holding company Weichai Investment, thus becoming the controlling shareholder of Hunan Torch. At the same time, Weichai Power has made Weichai Power because of Hunan Torch Holdings Shaanxi Heavy Duty Truck and Shaanxi Fast Gear. Shaanxi Natural Gas and Shanxi Fast Gear naturally arrived in a camp, and Weichai Power and Shaanxi Zhongqi formed a strategic alliance. According to sources from Shaanxi Zhongqi, since last year, Weichai Power and Shaanxi Heavy Duty Truck have held several joint meetings. The topics are focused on how to jointly open up the market and suppress opponents. Obviously, its main rival is China National Heavy Duty Truck.
China National Heavy Duty Truck's engine plant is already in the initial stage of production, while its Hangzhou engine plant can produce 5,000 engines per month and it is self-sufficient. China National Heavy Duty Truck is also forming its own truck industry chain and hopes to use the complete truck industry chain to achieve its listing in Hong Kong.
The two big trucks of China National Heavy Duty Truck and Weichai Group formed in the opposition have begun to show a trend of confrontation in the market.
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