China Specialist, Auto and Industrial Specialist

Victoria Li

20 years experience as sell side analyst focusing on China's Industrial and Auto sectors

Equity Bottom-Up

<p>Local media reports that Beijing Automotive Group (BAG), parent company of the listed company, announced at beginning of September that it will consolidate its assets of local brands passenger vehicles -  which are operated by BAIC (1958.HK) and BAIC Bluepark New Energy Technology (600733.CH). It is interesting that no announcement is made by these two listed companies about this so far and the available information is blurry.</p><p>However, this restructure could make dramatic effect on BAIC.  Our two scenarios are based only on available public information. Our conclusion is that BAIC might benefit immediately by having 25% increase on its annual net profit in scenario one. In the second scenario (which has the higher possibly of coming through in our view) it would gain no real benefit in short term, and limited benefit in long term.</p>

Local media reports that Beijing Automotive Group (BAG), parent company of the listed company, announced at beginning of September that it will consolidate its assets of local brands passenger vehicles -  which are operated by BAIC (1958.HK) and BAIC Bluepark New Energy Technology (600733.CH). It is interesting that no announcement is made by these two listed companies about this so far and the available information is blurry.However, this restructure could make dramatic effect on BAIC.  Our two scenarios are based only on available public information. Our conclusion is that BAIC might benefit immediately by having 25% increase on its annual net profit in scenario one. In the second scenario (which has the higher possibly of coming through in our view) it would gain no real benefit in short term, and limited benefit in long term.

BAIC (1958.HK): Business Restructuring Opportunities

Baic Motor Corp Ltd H

BAIC (1958.HK): Business Restructuring Opportunities