Li Shufu Embraces New Driving Forces? Geely'S $300 Million Stake In The Stock Market Has Become "Suspicious".

In recent years, Geely has been keen on buying and selling. Recently, there is news that Geely will invest $300 million in the stock market, and is expected to become the third largest shareholder.

It is said that the price of Geely's stake in the stock market should not be higher than the price of the convertible bond issued by Wei Zai. It can be calculated that Geely will hold about 97 million 720 thousand shares of stock, accounting for about 8.5% of the total share capital after the increase, which is only inferior to Li Bin, chairman of Wei Lai automobile and Tencent.

As of press release, the investment has not yet landed, and rumors have not received a positive response from both sides. Whether it is Wei Lai or Geely, it is said that "no comment" or "announcement is the criterion".

When the news came out, it immediately fermented in the car circle. Many media also followed up quickly, but whether Geely really wanted to invest was still uncertain. On the one hand, Geely, who has been generous for many times, is often left behind by dove. This reasonable and unreasonable investment has become Schrodinger's cat.

In the past week, the automobile industry media has divided into two distinct branches of Geely investment. One is that it is "fixed, there are not many variables", and the second is that it is "false news" from the perspective of the law of industrial investment.

In the past year, Wei Lai has repeatedly discussed and reached cooperation with the management, including the local government funds represented by Beijing Yizhuang GP and the industrial funds represented by GAC, but these investments either died or progress slowly, which made the outside world more naturally "vigilant" for the financial news.

In fact, there has been a long story about Geely's stake in the stock market. In early January, there were media reports that Geely was competing with GAC and SAIC. Later, Guangzhou Automobile Group issued a notice on the exchange, admits that it might be a good investment, but Geely did not respond to any response.

In February 23rd and twenty-first Century, the economic report reporter learned from the insider that Geely is still interested in investment. Especially after the failure of the acquisition of Aston Martin, Geely needs new projects to improve the strategic layout. Although it is not a particularly desirable target from the company's management level, Geely is quite interested in the high-end platform.

Obviously, there is no shortage of reasons for entering the stock market, but the key is whether the best interests can be achieved at the right price. This is the focus of repeated trade-offs with many of Li Bin's negotiators.

For Wei Lai, it is very important to achieve the intention, but more importantly, the money must be paid and no bag is lost. These people told reporters that the situation is changing rapidly. Whether Geely will vote is not easy to say. However, it is expected that there will be progress in the March when fortune comes.

Miss Aston Martin first

In twenty-first Century, the economic news reporter was told that Geely's recent acquisition of Aston Martin's "failure" has contributed to its investment.

At the end of last year, foreign media exposed Aston Martin's negotiations with potential investors and assessed financing and various financing options. At that time, the British luxury car manufacturer was in a state of continuous loss and had been hoping to "win" its fortune and finally wait for the opportunity.

However, this business has not been made at last. A Canadian businessman named Lawrence Strol became the new owner of Aston Martin.

According to data released by the media, St Rolle bought 16.7% shares with 182 million pounds, while the Geely scheme was 200 million pounds to acquire 19.9% shares, compared with Geely's price of about 8%.

Wei Lai's models are not comparable with Aston Martin's models, but basically they are Geely's projects in the same period. The reporter realized that Geely did not consider investing heavily. But after losing Aston Martin, Geely's attitude changed.

It is reported that since the middle of last year, Li Shufu has talked with Li Bin about investment and stock issues many times, but the two sides have not reached a consensus. On the one hand, Wei Lai was not so eager to raise funds at that time. He also had chips, and there were many investors at the same time. On the other hand, Li Shufu did not have enough incentive to invest. He himself was not optimistic about Internet making.

Li Shufu has repeatedly criticized the "new driving force" in public. At the 2015 World Internet Conference in Wuzhen, he once said that the Internet car making is "no body soul". At the Third International Automobile Safety Summit in 2016, he also bluntly denounced that "some enterprises" made cars to "encircle money in the capital market". During the 2018 Beijing motor show, he once again said, "Internet Co car building is always fooling around." The people.

There is also a rumour that Li Shufu had also said bluntly: "you can't do that."

But last year, the style of painting began to change. At the Shanghai motor show in 2019, Li Shufu visited the ideal car booth of the new car making force, and thumbs up to the founder of the ideal automobile, Li Xiang, saying, "you are fast enough." On the same day, Yang Xueliang, vice president of Geely Automobile, shared photos of this scene on micro-blog. Then Li Xiang himself also forwarded it, saying that Li Shufu's visit and praise were "enough for me to make a lifetime of cattle".

This is seen as a turning point in Li Shufu's embrace of the Internet. After that, he began to get in touch with Li Bin. However, during the Shanghai motor show, Li Shufu was also scheduled to visit the Wei Lai exhibition hall. But Li Bin thought that it was not appropriate to meet at the booth, so the two people had only been around for about a year or so.

What is the value of investment?

From the perspective of Geely, participation in investment has its rationality. The person familiar with the matter told the twenty-first Century economic news reporter that Li Shufu was not interested in the company before, but he had always been interested in its high-end platform.

Geely Holding Group has a number of pure electric vehicle brands, including Geely's new energy's geometry, Volvo and Geely's Polestar. But geometric brand positioning is not as good as high-end, and Volvo and polar star are more complicated.

Although Geely has held Volvo for a long time, Volvo has been operating independently. Geely has only two board seats and has only recently begun to integrate. According to the announcement issued by Geely Automobile in February 10th, the company is carrying out a preliminary discussion with Volvo's management to explore the possibility of restructuring the two companies' business combinations.

"The platform of polar star is also redeveloped. It is uncertain whether the market can accept it." According to the people familiar with the matter, Wei Lai is not a perfect company, but its brand recognition is acceptable. "The main problem is the production and cost control. The demand side is no problem."

According to Geely's consistent style, it is not unusual to invest more in a single place. Compared with the investment of Aston Martin's 200 million pounds, the capital needed to buy shares is less, and it does not create pressure on Geely.

In addition, Geely investment is expected to enhance its valuation level in the capital market. In recent years, Geely has not performed well in the two tier market since its rapid decline in 2018. It is still recovering from around 15 Hong Kong dollars per share, with a P / E ratio of only 10.

"Geely does not have to invest heavily, but it will have the opportunity to gain support from the two tier market after it has been invested." The people familiar with the matter believe that it can further consolidate Geely's position in China's auto industry.

However, apart from theoretical analysis, there are many practical considerations about Geely's participation in the stock market, such as the extent of participation in investment, cooperation and management changes.

Because Wei Lai is in a state of loss at present, it is difficult to obtain profits from purely financial investment. However, the analysis of strategic investment is also straight forward. Judging from the current product system, Geely has no need to support such an enterprise for a long time. After all, brands such as Geely, Volvo and smart have formed a relatively complete new energy vehicle ecosystem.

Some investors believe that if the amount of funds exceeds 1 billion US dollars, holding the car will probably have some value for Geely.

However, a person close to Geely pointed out: "if the price is low, it is not a good choice to make an investment, but if you want to be an absolute big shareholder, it is not necessarily the best choice."

But he also said that the integration is mainly based on what resources each of them can provide. If both sides can reach agreement and structure is reasonable, there is such possibility. "Wei Lai's platform technology and vehicle models are not enough to support the current development, but Geely's pure electric platform can share with Wei Lai, and the cost will be reduced after the platform's advantages are brought into play."

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