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Chang'an Automobile Co Ltd, the Chinese mini van maker listed in Shenzhen, yesterday announced a new share issue plan, scheduled for tomorrow, to facilitate its expansion.
The company, based in Southwest China's Chongqing Municipality, plans to issue at most 150 million shares at the Shenzhen Stock Exchange to raise 1.1 billion yuan (US$133 million), Chang'an said in a statement to China Daily.
The money will be mainly spent on "the project for the CM8 multi-purpose vehicle (MPV), expansion in other places and upgrading of mini van mould technology."
Following the new share issue, Chang'an will build a 100,000-unit production capacity in Chongqing for its own-developed CM8, which will be launched later this year, the company said.
The move will increase Chang'an's annual production capacity in Chongqing from 200,000 vehicles to 300,000 units.
The company's joint venture with Ford Motor, which has a plant in Chongqing, will team up with Japan's Mazda Motor - 33.4 per cent owned by the US auto giant - to construct a new 200,000-unit car plant in Nanjing, capital city of East China's Jiangsu Province.
The company, which launched an initial public offering in Shenzhen in 1997, was the best performing automaker in the domestic stock markets during the first half of this year.
Its net profits rose by 4.36 per cent year-on-year to 799 million yuan (US$96.5 million) in the period with earnings of 0.54 yuan (US$0.065) per share.
The company reported 10.14 billion yuan (US$1.22 billion) in sales from January to June this year, jumping 39.65 per cent.
It sold 248,810 vehicles during the period, up 27.46 per cent.
Chang'an will launch other own-developed MPVs, sports utility vehicles and recreational vehicles after the CM8, company officials said.
The company operates a joint car venture with Japan's Suzuki Motor in Chongqing with an annual production capacity of 200,000 units.
Chang'an also has two plants in North China's Hebei Province and Jiangsu Province with annual capacity of 100,000 and 150,000 vehicles respectively producing mini vehicles and light-duty trucks.
Analysts say the new share issue is part of efforts by the company's parent Chang'an Motor Corp to reinforce its newly-acquired position as China's third largest automaker after First Automotive Works Corp in northeastern Jilin Province and Shanghai Automotive Industry Corp.
Chang'an Motor's sales surged by 34.21 per cent year-on-year to 271,700 vehicles in the first six months of this year, dwarfing Dongfeng Motor Corp based in Central China's Hubei Province.
The parent firm has set an ambitious goal to increase its annual sales to 3 million vehicles by 2020, including 200,000 units for export.
It aims to sell 1.5 million vehicle annually by 2010, up from 500,000 units expected this year.
Chang'an Motor sold more than 410,000 vehicles last year.
The Chang'an-Ford joint venture is now producing the Fiesta compact sedan and Mondeo mid-sized sedan in Chongqing.
Ford has vowed to introduce vehicles of its affiliate brands, including Mazda, Volvo, Lincoln, Land Rover and Jaguar, into the joint venture's two plants to swiftly expand in China, the world's fastest-growing car market.
Chang'an Automobile closed at 8.41 yuan (US$1.01) per share yesterday, up 8 per cent.
Source: China Daily
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