Top Ten Investment and Financing Events in China's Automotive Industry in 2017

With the advent of a new round of technological revolution, the auto industry has entered a period of transformation and upgrading that subverts tradition. The various changes that followed will have a profound impact on the investment and financing of the entire automotive industry. According to Jiazhidao Automobile Statistics, in the past 2017, the investment and financing market of China's auto industry showed a sustained growth trend. The number of investment events rose from 245 in 2016 to 276, a year-on-year increase of 12.7%. The total investment has soared from 270 billion yuan in 2016 to 578 billion yuan, an increase of 114%.

It is worth noting that the number of investment institutions in 2017 is also rising to 388, which is an increase of 74.8% from 222 in 2016. From the perspective of the entire amount of investment, the difference from previous years is that in 2017, the amount of investment exceeds 50% is the new business model, new model, and new energy. In the past, the proportion of the traditional automobile industry, which accounted for a large proportion of the total, has further reduced to less than 50%. In 2017, listed companies became the main force in the investment and financing of the automotive industry. These listed companies included not only the automobile segment but also the non-automotive segment such as China Merchants Bank and CITIC Securities.

Recently, the top ten investment and financing events in China's auto industry in 2017 were announced at the China Automotive Industry Trends and Investment Summit. The specific list is as follows:

1. Ningde Times established two joint ventures with SAIC and its valuation has exceeded 130 billion yuan

On June 19, 2017, SAIC Group and the Ningde Times held a groundbreaking ceremony for the industrialization cooperation project in Liyang, Changzhou, Jiangsu Province. The project plans to build a total capacity of 36G watts of power battery. The total investment of the first phase of the project is 10 billion yuan. It is planned to fully put into production by the end of 2018, and the first production capacity will be 18 Gw/hr. The two joint ventures SAIC and Ningde established in the era were SAIC Power Battery Co., Ltd. and SAIC Times Power Battery System Co., Ltd. respectively.

SAIC Motor has a registered capital of RMB 2 billion and is mainly engaged in the development, production, sales and after-sales service of lithium ion batteries and lithium polymer batteries. The registered capital of SAIC Times is RMB 300 million and it is mainly engaged in the development, production and sales of power battery systems.
According to the agreement between the two parties, the joint venture company will become a supplier to all the subordinate new energy automobile companies in the SAIC Group. This means that SAIC’s own brands and SAIC Motor’s joint ventures will all purchase power batteries from SAIC and Ningde’s joint ventures.

The Ningde era has surpassed BYD and has become the world's second-ranked power battery manufacturer. The company will soon be listed and the market advantage will be further expanded in 2018.

2. Many second-hand car companies such as used cars of melon seeds obtained large-scale financing

2017 is the year of financing for used car suppliers. In the first half of the year, Youxin, Che 300, Chejebao, Dazai, Yixin and Guazi all raised funds. In September, the US$200 million invested in Renren became the latter's strategic partner. At the end of October, every day, car auctions, used cars and large car search vehicles were used to raise funds. The annual financing of used car suppliers exceeded RMB 20 billion in 2017, and BAT, Didi, and other giants were present frequently. More than 10 billion yuan of funds are mainly invested in advertising campaigns, offline distribution, and business development.

In 2017, more than 80% of the investment in the used car market has flowed to several head enterprises such as seeds and seeds, indicating that the used car industry has entered a high-speed growth period, the industry layout is nearing completion, and early-stage business opportunities have converged.

3. Weilai continuously completed a huge amount of financing (1.6 billion US dollars), the new car ES8 began mass production this year

Among all the new forces, Li Bin's Wei Lai has the largest amount of financing, more than 1.7 billion U.S. dollars. There are as many as 56 investors behind the company, including: Li Bin, Chairman and CEO of Easycar, and Li Xiang, founder of Car Home. Chairman Liu Qiangdong, Tencent, Gaochun Capital and Shunwei Capital. Since its establishment, Weilai has successively won investments from dozens of well-known institutions such as Temasek, Baidu Capital, Sequoia, Hopu, Lenovo Group, Huaping, TPG, GIC, IDG, and Pleasant Capital. Up to now, the company’s valuation has exceeded US$20 billion.

Weilai is one of the largest venture capitalists in the new-build car industry, and it is also another typical case in which the capital is gambling on the future of the industry. Weilai Company will continue to expand financing to support its mass production and infrastructure construction work.

4. New Hotspots for Hydrogen Fuel Cells as Power Cells: The Furuit Hydrogen Energy Project has landed in the Zhangjiagang Free Trade Zone, with a total investment of over 300 million yuan; SAIC Motor Group has become the first vehicle company to complete the entire industrial chain of hydrogen fuel vehicles.

The Furui hydrogen storage energy project has landed in the Zhangjiagang Free Trade Zone. The project covers an area of ​​58 acres and a total construction area of ​​28,000 square meters, including production plants, office space, and guards. After the completion of the project, it will annually produce 50,000 high-pressure hydrogen storage bottles and 20,000 sets of hydrogen hydrogen automotive supply systems.

Following the commercial operation of hydrogen fuel cell vehicles for the first time in Foshan, Shanghai Automotive Group Co., Ltd. has also cooperated with Shanghai Chemical Industry Park recently and signed the "Strategic Cooperation between Shanghai Chemical Industry Park and SAIC Group at Shanghai Chemical Industry Park Management Committee. Framework Agreement". Both contracted parties will make full use of their advantageous resources, combine Shanghai's fuel cell vehicle industry development plan and smart interconnection industry planning, and jointly promote the commercialized operation of fuel cell vehicle products and conduct beneficial explorations to build Shanghai Chemical Industry Park into hydrogen energy. Demonstration base, and carry out various types of fuel cell vehicle demonstration operations and intelligent network of automotive demonstration operations.

After undergoing the commercialization of ice-breaking, fuel cells are increasingly becoming the “new investment boom” for various capitals.

5. Dichui Banking F-round total financing of RMB 9.5 billion before listing

The Djichu Travel Group has completed a new round of over 4 billion U.S. dollar equity financing. The new financing will be used for artificial intelligence (AI) technology development, internationalization, and ecological construction of new energy vehicles. Investors include Mubadala in Abu Dhabi and Softbank. Dripping was valued at more than US$50 billion and became one of the highest valuation startups in Asia. Including the latest financing, the current cash reserves of the deposits reached US$12 billion, which is higher than US$3.5 billion two years ago. Informed sources said that Didi is expected to be listed in 2018.

After the new round of financing has entered, the focus of Didi will be on the development of globalization, forward-looking technologies such as driverless driving.

6. Yixin Group completed 10.5 billion yuan in strategic investment and financing, and went to IPO in Hong Kong in November

After the Yixin Group obtained financing of 4 billion yuan on May 11, 2017, it submitted an IPO application on October 29, and the Yixin Group went public in Hong Kong on November 16. This news made the Internet automobile industry one of the Although the operating models of the platforms are different, the core interests are generally the same: trading and finance. If Yixin Group can successfully land the capital market with the first shares of auto finance, it means that other companies can also go through this path.

As the "first share" of new retail automobile, Yixin is expected to become an auto financing oligarch company. Its IPO success shows that "the new automobile retail" featuring "opening up online and offline, open communication between media and sales, financing and sales open" The outlook has been widely recognized in the capital market.

7. Baoneng Group invests RMB 6.61 billion in shares of Guanzhi Automobile and RMB 14 billion in new energy auto projects

View Model K-EV

Kenon Holdings, the parent company of Qoros Automotive, announced that Baoneng Group had purchased 51% of the shares of Guanzhi for RMB 6.63 billion and officially became the controlling shareholder of Guanzhi Auto. This signifies that Baoneng officially took over the concept of vision and took the first step in the automotive field, and also enabled the company to enter a new stage of development.

In March 2017, Baoneng Group registered and established Baoneng Automobile Co., Ltd. for RMB 1 billion; in October 2017, Baoneng Group signed a cooperation framework agreement with Hangzhou Fuyang District Government and Hangzhou Xintiandi Group, with a planned investment of RMB 14 billion. Construction of a new energy vehicle project with an annual production capacity of 300,000 vehicles. In December 2017, Baoneng Group started construction of a 30 billion new energy automobile industrial park invested in Guangzhou. The industrial park plans to produce 500,000 new energy vehicles and related facilities for the first time. project.

8. Bonbang Auto Service received RMB 400 million in Series A financing from PICC, CITIC Industry Fund, Yuantong Express, and Timing Automobile.

Bang Bang Auto Service is a comprehensive service platform for Internet trading in the automotive aftermarket. It links various resources in the auto parts industry chain, and cuts in and out of insurance accident car claims. It will create B2B auto distribution platform “drive safety” in advance to realize vehicle owners, insurance companies, and maintenance. Multi-party win-win for enterprises, parts suppliers, and operation service providers. Recently, Bangbang Auto Parts obtained PICC P&C Insurance, PICC Gold Insurance, CITIC Industry Fund, Qingwa Capital, Yuantong Express, Zhongmin Investment, Jingyou International Group, and Timing Automobile's 400 million yuan round A investment.

Large state-owned insurance groups are entering the aftermarket in the form of mixed ownership, and the timing of auto ownership indicates that the core role of data operators in the parts trading platform is becoming increasingly prominent.

9. Zheng Coal Machinery to Acquire Bosch Starter and Generator Business for 4.1 Billion Yuan

Zhengzhou Coal Mining Machinery Group Co., Ltd. and Chongde Investment Co., Ltd., a private equity firm, announced that the joint acquisition of the SG Holding, a well-known motor company under the German Bosch Group, has officially completed the delivery. It is understood that China Merchants Zhiyuan Capital's funds and Zheng Coal Machinery, Chongde Investment and other institutions formed a 100% stake in the acquisition of SG Holding. The transaction amounted to approximately RMB 4.1 billion (equivalent to EUR 545 million).

The acquisition of the transaction, the subject SG Holding, is a company established by the German Bosch Group to spin off the starter and generator business. Its main products include starters and generators for passenger cars and commercial vehicles, start-stop motors and 48V BRM energy recovery systems. It is the world's leading supplier of starters and generators for passenger cars and commercial vehicles. It maintains long-term relationships with world-renowned automakers such as Daimler, BMW and Volkswagen. SG Holding has a global production and sales base and direct sales to automakers around the world.

10. JAC and Volkswagen build a joint venture to produce new energy vehicles

In May 2017, the pure electric vehicle project jointly invested by JAC and VW in China was officially approved. According to the plan, after the joint venture is established, it will launch a brand new brand of new energy. The first product will be designated as SUV. The existing JAC platform will be used, and the subsequent models will be transformed into the public platform. According to Jianghuai Automobile insiders, the new car has entered the road test stage and is progressing smoothly. It will be formally introduced to the market in 2018.

JAC and Volkswagen are typical representatives of the new energy joint venture after the issuance of the double-integration policy, breaking the policy limit of not more than two Sino-foreign joint ventures.