** Insufficient power is still waiting for the overall listing of FAW

Although it belongs to the top secret of the group, the overall listing process of FAW Group remains a concern.

On June 13, two listed companies under FAW Group issued a clarification announcement on the overall listing. On the same day, some media said that the establishment plan of FAW Group Co., Ltd. has been approved by the SASAC and submitted to the NDRC for record.

The establishment of a joint-stock company is a prelude to the overall listing. From the composition of the stock company, it is often possible to infer the overall listing plan and even the time to market.

However, Dr. Wang Xiaoming of the Research Department of Industrial Economics of the Development Research Center of the State Council previously told reporters that under the background of good overall efficiency of the auto industry, FAW Group has sufficient cash flow and profits, therefore, the financing power of listing is not very strong. However, from the perspective of sustainable development in the future, the listing has great significance for the transformation of old state-owned enterprises, perfecting the system, perfecting the governance structure, and moving toward internationalization in the future.

The position of the insiders of FAW also confirmed Wang Xiaoming's viewpoint from another side. Li Jun, the deputy chief engineer and director of the technical center of FAW Group, said publicly: “Money is not a problem. FAW's current funding is sufficient. Now, the biggest bottleneck in our task is time.”

As there is no public information, FAW Group has no official data on profits last year, but compared with Dongfeng and SAIC Group, FAW Group's profitability is indeed better, due to the overall profits of its joint ventures such as FAW-Volkswagen, FAW Mazda and FAW Toyota climbing. The cash flow contributed to FAW Group should not be underestimated. According to media reports, in 2009, FAW Group had topped the “Fortune Champion” of domestic auto enterprises with a profit of 17.8 billion yuan.

Therefore, people in the industry believe that financing from the capital market is not the main driving force for the listing of FAW. Changing the existing company system and introducing a modern enterprise system is the main purpose of FAW listing.

Dong Yang, secretary general of the China Association of Automobile Manufacturers, once expressed his deep feelings to reporters that FAW listing is a need to restructure old state-owned enterprises.

According to media reports, in order to avoid competition between listed companies and their parent companies, most of the group's assets, including FAW-Volkswagen, FAW Audi's core premium assets, will be injected into listed companies, while FAW Cars (000800.SZ) and FAW Xiali ( 000927.SZ), Qiming Information (002232.SZ) and FAW Fuwei (600742.SH), all four listed subsidiaries will be canceled after the merger.

At present, the preferred option for the overall listing of FAW Group is repurchasing. From last year to now, this idea has been the preferred option of FAW Group.

In July last year, FAW Car and FAW Xiali announced that it would establish a new joint-stock company. From the announcement, it can be seen that the overall IPO listing of FAW Group is more likely.

“The advantage of IPO is that it is convenient for financing and it is easy to raise huge amounts of capital. However, when the capital market is in poor condition, it is not a good choice. In addition, the IPO application process is relatively time-consuming.” Cao He, analyst of National Securities Auto Industry, told this newspaper .

Regardless of which plan was eventually adopted to complete the listing, FAW's long listing process has finally taken a step forward. Since the announcement of the subsidiary’s announcement of the proposed establishment of the joint-stock company in July last year, many strategic initiatives within FAW Group have also released signals that the overall listing of the Group has accelerated.

At the beginning of this year, FAW has stepped up its efforts to separate its main and auxiliary businesses and test water sales. Almost at the same time, the senior management position of FAW Group was fully frozen. Since the end of last year, the brand strategy of the unified logo of FAW's independent products was formally implemented. In the future, autonomous cars other than the Hongqi sedan will be debuted with the image of “Eagle Standard” and a new front grille. All kinds of initiatives are preparing for the overall listing.

Although it has a wealth of listed company resources, FAW Group is the only one of the four largest automobile groups in the country that has not yet been listed as a whole. Whether from the perspective of market competition or from the perspective of fulfilling the political tasks undertaken by the central enterprises, FAW Group has completed the overall market trend. Imperative.

It is the “ruling program” of Xu Jianyi, the head of FAW Group, to seek to improve the modern enterprise system through listing and further consolidate the strength of independent brands. After taking over FAW from the end of 2007, Xu Jianyi began to promote internal reforms such as the separation between the main and auxiliary companies. He has realized that if FAW Group, which has turned its ship in trouble, will not be able to break through the system’s barriers as soon as possible, it may be lagging behind in competition with SAW, Dongfeng, Chang’an and GAC and other state-owned large-scale automobile groups.

To a certain extent, the significance of FAW's overall listing is just here. It is more hopeful to regain the throne of the "leader" of the car through the change of corporate mechanism through listing.