Guangzhou Automobile Group Co, one of China's top automakers,
said it will revive its plan for an initial public offering (IPO)
to help it meet the capital demand and develop its own vehicle
brand.
"We have begun the preparation for a listing this year," Zeng
Qinghong, general manager of the group, said on the sidelines of
the Fifth Session of the 10th National People's Congress in
Beijing. But he refused to disclose where the company planned to be
listed.
It's not the first time for the group - which is also the
Chinese partner of Japan's Honda Motor and Toyota Motor - to moot
the listing idea.
Shanghai Securities News had earlier reported Zeng as
saying the group would "definitely go public in 2006, preferring an
overseas listing and will very likely list in Hong Kong". He was
then at the helm of Guangzhou Honda Automobile Co, a 50-50 joint
venture between Guangzhou Automobile and Honda Motor.
In July 2005, the China Securities Regulatory Commission had
allowed Guangzhou Automobile to enter the tutorship period for
IPO.
This week, Zeng said there was not enough preparation for the
listing last year. But "now it's time for us to sell shares as well
as develop our own range of vehicles".
Zeng also promised that Guangzhou Automobile will launch its
own-brand concept car this year and introduce a series of cars in
the mid-to-high-range segment by 2010.
"Our group is targeting a total sales volume of 500,000 units
and a revenue of over 100 billion yuan this year, and double that
figure in 2010."
The group's resurrection of the IPO plan comes close on the
heels of Shanghai Automotive Co's share flotation in December to
fund own-brand cars and expansion in the world's second-largest
auto market.
Song Bingshen, an analyst with CITIC China Securities in
Beijing, said Guangzhou Automobile "will probably be listed on the
mainland in view of the booming market, maybe in the first half of
next year. But the group may also go public in Hong Kong as its
investment holding company Denway Motors Limited has a presence
there".
"IPO may ease the capital pressure on Guangzhou Automobile's
capacity expansion. But I think it might go the H-share way first,"
said Han Yinhua, an analyst with Industrial Securities in Shanghai.
"But it will definitely regress to A shares someday, both because
of the booming mainland economy as well as the growing prosperity
of the A-share market."
(China Daily March 9, 2007)