New energy vehicles continue to be favored by the capital. On January 24, Evergrande motor (0708, HK) issued an announcement to sell 952 million new shares to six investors, attracting a total of HK $26 billion, which is one of the largest equity financing in the history of new energy automobile industry.
It is worth mentioning that the fixed increase has won the support of Chen Hua, chairman of Shenzhen real estate tycoon Kingkey group, Huang guangmiao, chairman of Zhongzhou group, and Chen Kaiyun, wife of Hong Kong tycoon Liu Luanxiong. This is the second capital increase of Evergrande in half a year. The previous capital increase introduced shareholders including Tencent, Sequoia Capital and didi travel.
HK $26 billion
On January 24, Evergrande Motor said that it would sell 952 million new shares to six investors at an average closing price of 8% in the previous five trading days, attracting a total of HK $26 billion. The investors voluntarily locked in for 12 months. As of January 22, Evergrande motor closed at HK $29.9 per share.
It is reported that the subscription fund-raising will be used for Hengda’s new energy vehicle industry technology research and development, production investment, debt repayment and general enterprise purposes.
Evergrande said that the successful private placement fully reflects the investors’ high recognition of the company’s operation and management ability and business development level after comprehensive research, as well as their confidence in the development prospect of its new energy vehicle industry. At the same time, it will greatly enhance the capital strength, help the new energy vehicle industry to accelerate development, and realize the strategic goal of becoming the largest and strongest new energy vehicle group in the world as soon as possible.
According to the Chinese reporter of the securities company, Evergrande automobile, formerly known as Evergrande health, began to lay out the new energy vehicle industry in 2018, and officially renamed Evergrande automobile in August 2020, covering the whole industry chain of new energy vehicles such as power battery, powertrain, advanced vehicle manufacturing, automobile sales and smart charging.
On August 3, 2020, hengchi released its first six models, covering all levels and models from a to d. On August 7, 2020, Evergrande’s production bases in Shanghai and Guangzhou will be unveiled. At the beginning of December 2020, Hengda new energy vehicle hengchi 1 will start road test, mass production is imminent, and it is planned to achieve 1 million production and sales by 2025. In order to successfully realize the sales of new energy vehicles, Evergrande group has cooperated with 152 intermediary agencies to launch RV Bao, focusing on real estate and automobile transactions, paving the way for hengchi automobile sales.
It is worth mentioning that Evergrande group will increase its holdings 17 times in December 2020, involving more than HK $3 billion in capital, and its shareholding ratio will directly rise from 73.5% to 74.95%.
This time, about 9.75% of the total number of shares issued after the expansion were subscribed to six investors, and the shareholding ratio of Evergrande group decreased from 74.95% to 67.64%.
Shenzhen and Hong Kong
The board of directors of Evergrande Motor Co., Ltd. believes that raising equity funds by increasing subscription items can expand the shareholder base, enhance the capital base and enhance the financial status and net asset base, so as to promote long-term development and growth.
Despite the popularity of new energy vehicles, in recent years, Evergrande, which was born later, faces many competitors.
A reporter from China securities company noticed that behind Evergrande’s HK $26 billion real money and silver, in addition to the capital’s favor for new energy vehicles, Xu Jiayin’s circle of friends played an important role.
According to the announcement, the six strategic investors include four companies and two individuals, namely Chengyu Holding Co., Ltd., Shangyu Co., Ltd., heyirong International Trade Co., Ltd., Cuilin Global Investment Co., Ltd., Chen Kaiyun and Liu Minghui. The four institutions have subscribed for HK $5 billion respectively, and the two individuals have subscribed for HK $3 billion respectively, totaling HK $26 billion.
Many of the six strategic investors of Evergrande auto are old friends of Xu Jiayin’s real estate industry.
For example, among the individual investors, Chen Kaiyun (nicknamed “Gambi”) is the wife of Xu Jiayin’s good friend, Hong Kong tycoon Liu Luanxiong. At present, Liu Luanxiong’s family holds about 9% of the equity of China Evergrande. Gambi personally invested HK $3 billion to support Evergrande.
The actual controller behind Chengyu Holding Co., Ltd. is Chen Hua, the chairman of Kingkey group. Chen Hua is the founder of Kingkey group. Kingkey group, founded in 1994 and headquartered in Shenzhen, is a comprehensive enterprise integrating real estate development, business operation, financial investment, technology intelligence and other core business sectors.
The real controller behind Shangyu Co., Ltd. is Huang guangmiao, the founder of Zhongzhou group. Zhongzhou group is a large comprehensive group enterprise, whose business fields include real estate development and operation, industrial park construction and business incubation.
Yirong International Trading Co., Ltd., wholly owned by Wang Kaiguo, is mainly engaged in trade and investment. Wang Kaiguo focuses on bulk trade, private equity and open market investment.
Cuilin Global Investment Co., Ltd. is wholly owned by Wang Zhongming, who is now the chairman of Cuilin group. Previously, Evergrande Bingquan and other industries were sold to the related parties of Cuilin group.
Liu Minghui, the last individual investor, is the chairman of China Gas (00384, HK), a Hong Kong listed company. He also contributed HK $3 billion to participate in the fixed increase.
In addition, Evergrande motor had a capital increase on September 15, 2020. It raised about HK $4 billion by rights issue, with a price of HK $22.65 per share. It introduced Tencent, Sequoia Capital, Yunfeng fund and didi travel as shareholders. The funds raised were used for new energy vehicle business development. At that time, the entry of Tencent, Sequoia and other well-known investors was interpreted by the industry as representing capital’s optimistic attitude towards new energy vehicles.