Recently, heavy news came out in the market. Legend Rui Holding Group is considering splitting its automobile business and listing it in Hong Kong, with an estimated market value of about 50 billion yuan. This dynamic has not only brought a new turn for Chery’s listing, but also aroused widespread concern in the entire automobile industry.

As one of the few automobile group companies in China that have not yet landed in the capital market, Chery’s listing process can be described as twists and turns. Then, can this spin-off listing become a key leap for Chery to realize its dream of listing?

The road to listing is full of twists and turns

Since its establishment in 1997, Chery Holding Co., Ltd. has developed from a single automobile manufacturer into a comprehensive enterprise covering automobile, finance, real estate, service, intelligence and parts manufacturing, and its business footprint covers more than 80 countries and regions around the world. However, despite remarkable achievements in business scale and market share, Chery’s road to listing is extremely difficult.

Chery automobile has been preparing for the IPO for nearly 20 years since the listing plan was first announced in 2004. At that time, Anhui Province actively promoted the listing of Chery and implemented the share reform. However, despite its outstanding performance, Chery’s initial listing attempt finally failed due to factors such as unclear equity relationship with SAIC.

Around 2006, JAC was in trouble. As the two major automobile manufacturers in Anhui Province, it was once reported in the market that Chery and JAC might merge and go public and cross-hold shares, which brought JAC the hope of getting out of trouble. But unfortunately, Chery failed to be the savior of Jianghuai. With the approval of Jianghuai car project, it successfully saved itself, and the rumors of merger with Chery also vanished.

Since then, Chery has repeatedly suffered setbacks on the road to listing. In 2015, Chery Huiyin, its joint venture company, failed to hit Hong Kong stocks and A shares. In 2016, Chery New Energy tried to achieve "backdoor listing" through conch profiles, but it also failed to do so. As an old-fashioned independent brand car company, Chery’s repeated failures are undoubtedly regrettable. However, Chery has not given up, but has been actively preparing for listing.

In 2020, Chery introduced Qingdao Wudaokou Capital; In 2022, Luxshare became a new strategic investor of Chery. According to the latest plan, Chery plans to complete the A-share IPO by 2025. Two years ago, Yin Tongyue, Party Secretary and Chairman of Chery Holding Company, made it clear that in order to broaden the financing channels, it was hoped that Chery Automobile could successfully go public before 2025, so as to promote the company’s new round of transformation.

The main purpose of enterprise listing is financing. Chery’s capital demand has always been well known to the industry. Yin Tongyue once admitted that Chery’s early capital investment was limited, and it has not been listed, and it has not issued bonds in the capital market in recent years. Therefore, in the process of rapid development, Chery’s capital demand mainly depends on bank financing. Landing in the capital market will not only help Chery to establish a long-term capital replenishment channel, but also activate its equity incentive mechanism. From the initial listing plan in 2004 to the completion of the capital increase and share expansion project in 2019, Chery’s listing road has been tried many times, but it failed for various reasons. Now, with the news of the spin-off and listing of the automobile business, Chery has once again taken a solid step towards the capital market.

Multiple considerations behind the valuation of 50 billion yuan

As early as the end of last year, there were rumors that Chery Automobile was preparing to go public this year, and the listing place was initially designated as the mainland, with a valuation as high as 150 billion yuan. However, the valuation of this IPO in Hong Kong has been adjusted to 50 billion yuan, which is significantly reduced compared with previous rumors. Behind this change, there are multiple factors such as the uncertainty of the global automobile market, the fierce competition of the new energy automobile industry and the fluctuation of the Hong Kong stock market.

Under the background of global supply chain bottleneck, rising raw material prices and increasingly fierce market competition, the profitability of auto companies is facing severe challenges, and investors are becoming more cautious about the valuation expectations of auto companies. At the same time, the competition in the new energy automobile industry is becoming more and more fierce, which makes investors conservative about the future growth potential of Chery Automobile. In addition, the overall poor performance of the Hong Kong stock market, especially the fluctuations in technology stocks and new energy vehicles, also affected Chery’s valuation.

Nevertheless, the spin-off listing is still of great significance to Chery. Through direct financing in the capital market, Chery can obtain more funds for R&D and market expansion, especially in frontier areas such as new energy vehicles and smart driving. At the same time, listing will also help attract strategic investors and partners and inject more resources and support into the company’s long-term development.

In order to have a deeper understanding of the prospect of Chery’s spin-off and listing, "Auto Talk" interviewed a number of industry experts and analysts. They generally believe that the spin-off and listing will help Chery to focus more on the main automobile industry and improve its operational efficiency and market competitiveness. Through listing, Chery can more clearly define the strategic objectives and market positioning of the automobile business, and optimize the resource allocation and management system.

However, some analysts have warned that Chery needs to pay close attention to the changes in the market environment and competitive situation, and formulate practical strategic planning and marketing strategies. In addition, before the spin-off, Chery needs to strengthen its internal management and enhance its brand image to ensure the long-term and stable development of the company.

According to Yin Tongyue, chairman of Chery Holding Group Co., Ltd., Chery will be split and listed in the future, and will be laid out in many fields such as new energy, artificial intelligence, mobile travel service and core components. Through the spin-off, Chery can build a multi-sector listed company cluster, realize the diversification and coordinated development of its business, and thus enhance its overall competitiveness and anti-risk ability.

Generally speaking, the news that Chery intends to spin off its auto business and go public has brought new hopes and opportunities for the company’s future development. Despite many challenges and uncertainties, Chery has not given up its dream of going public. Through the spin-off, Chery is expected to improve the efficiency of capital operation and financing ability, focus on the main automobile industry and enhance brand value and market competitiveness, conform to the development trend of the automobile industry and seize market opportunities.

　　▲ "Small Eight-story" located in Mengbo, northern Myanmar

　　In the downtown area of Mengbo, the Wa State in northern Myanmar, the "Xiaoba Floor" is an unremarkable street-facing building, but it is an electric fraud park where thousands of people once lived, and there are supermarkets, dormitories and office areas … … There is a security guard at the door with a gun.

　　Recently, Nanchong Public Security Bureau in Sichuan cracked the "4.01" mega-telecommunication network fraud case jointly supervised by the Ministry of Public Security and the Supreme People’s Procuratorate, destroyed 21 fraud gangs and arrested 1,090 suspects, involving a total amount of 62.47 million yuan. The police found out that the above-mentioned gangs and suspects were mainly concentrated in the "Little Eight Floor" in Mengbo, Wa State, Myanmar, and the "Sanliandong" and "Caigang shed" in Mengping.

　　“‘ Small eight floors ’ It was rented by Lan Moumou, and he rented it to other fraud gangs while running his own fraud company. " Liu Hao, director of the Anti-Fraud Center of the Public Security Bureau of Yilong County, Nanchong City, told Red Star News that there were more than 10 electric fraud companies in the "Little Eight Floor", and Lan Moumou also had a "shareholding" operation in the electric fraud company in the "Sanliandong".

　　It is reported that the investigation of the "4.01" mega-transnational electric fraud case lasted for more than two years, and nine district and county public security (sub-) bureaus of Nanchong Public Security Bureau participated in the battle, and the procuratorial organs also intervened in the joint case in advance. The breakthrough of "4.01" case originated from a case of "two cards" (mobile phone card and bank card) in early 2011.

　　Liu Hao said that among the complicated clues, Nanchong police not only found out the black production chain of electric fraud parks such as "Xiaoba Floor", "Sanlian Building" and "Caigang shed", but also grasped the clues of more than 30 other electric fraud gangs, which have been handed over to the public security departments at higher levels.

　　▲ Nanchong police arrested the suspect.

　　The format of "small eight floors" in northern Myanmar;

　　Concentrate on more than 10 home appliance fraud companies

　　In fact, it is an electric fraud park.

　　On February 19, 2021, Yilong County Public Security Bureau checked the clues of "two cards" according to the deployment of superiors. With the deepening of the investigation, the money laundering gang and the electric fraud company behind it were traced. In the same year, Yingshan County Public Security Bureau and Peng ‘an County Public Security Bureau of Nanchong City cracked "Zhang and others were suspected of telecommunication network fraud" and "Zhao and others were suspected of telecommunication network fraud" respectively. The chain terminals of several cases all point to the fraud gangs established by Lan Moumou in Mengping and Mengbo, Wa State in northern Myanmar.

　　In view of the seriousness of the case, in January 2022, after reporting to the superior for approval, Nanchong City Public Security Bureau set up a task force and a headquarters to co-ordinate the nine district and county public security (sub-) bureaus to participate in the investigation.

　　According to the cross-checked clues, the police found out that Lan Moumou was from Fujian. He had an activity track in Yunnan in 2019, and there was no news since then. The suspect in the case confirmed that the "small eight floors" in Mengbo, Wa State in northern Myanmar were rented by Lan Moumou from the local people. In addition to running his own electric fraud company, he also subletted the floor to other electric fraud gangs.

　　"Little Eight-story", "Three-story Building" and "Caigang shed" are all names given by the police according to the characteristics of the places involved. "The fact is that there are electric fraud parks." Liu Hao told the Red Star journalist that Lan Moumou had the largest self-operated company in the "Little Eight-story", which once reached 300 to 400 people, and there were no fewer than 10 electric fraud companies, large and small.

　　"Little Eight-story" is an eight-story building facing the street. The ground floor is a supermarket, the second and third floors are office areas, and the upper floors are dormitories. Liu Hao introduced that Lan Moumou not only collects the rent from other electric fraud companies, but also enjoys the billing commission from other companies. Because of his large business volume, he works closely with money laundering gangs and also provides money laundering intermediary business to other electronic fraud companies.

　　Lan Moumou does not often appear in the "small eight floors", and the daily management business is handed over to his fellow villager Lin. According to the confession of the suspect in the case, Lan Moumou also invested in an electric fraud company in "Sanliandong" in Mengping.

　　Also in the "Little Eight Floor", Bear and Kurogane are also the bosses of the electric fraud company, both of whom are from Fujian. A number of company executives confirmed that in addition to its own "sole proprietorship", Bear also owns 50% of the shares of Kurogane Company.

　　The manager of Big Bear Company is called Big Bear. After Xiong Da arrived at the case, he confessed that when Xiong was down and out in his hometown in Fujian, he helped him with all his strength. Later, Bear went to North Myanmar and came back as a "rich man", buying a house and a luxury car for his relatives. In order to report Xiong Da’s "grace of dripping water", Xiong invited him to Myanmar North Management Company.

　　Electric fraud personnel in the park:

　　It is almost impossible to escape.

　　Constantly looking for "the next victim"

　　In the electric fraud park, everyone becomes another person. Their identity cards were confiscated and they were not allowed to contact their families. They entered the world of lies and even their own names were erased. They only had a temporary title: Big Bear, Big Bear, Kurogane, Qiqi, Zhang Wei … …

　　"They have all kinds of fraud methods, different words, some for the elderly, some for women, and some for men … … There is a brush list, a pig killing plate, and a naked chat extortion … …” Qiao Jun, instructor of the 1st Squadron of Criminal Investigation Brigade of Public Security Bureau of Jialing District, Nanchong City, said that according to incomplete statistics, there are at least more than 10 kinds of electronic fraud means in the "small eight floors".

　　Qiao Jun contacted a female victim in Beijing according to the clues given by the suspect. The woman was cheated by tens of thousands of yuan in the deception of "killing pig plates", but she did not report the case due to family reasons. The suspects confessed that they should add a certain number of "customers" to the dating network and social software every day, and then strike up a conversation, add them as friends, and cultivate feelings … … Working for more than 10 hours every day, constantly looking for the "next victim", dare not stop.

　　Liu Hao told Red Star News that there is a strict reward and punishment mechanism in the electric fraud park, with commission for billing and reward for good performance, but if the task is not completed, it means severe punishment, such as starvation, corporal punishment, beating and closing the dog cage … …

　　The gate is guarded by security guards with guns, and the swindlers at the bottom can’t go out at will. They eat, drink and sleep in this building. Managers and grass-roots employees are equipped with badges, and the color of badges means freedom to enter and leave the building, but general middle managers also need to find the "boss" to open an access slip.

　　It is even more impossible to escape. Even if you escape, the company will soon use the local umbrella forces and issue a "reward" announcement to arrest people. When you are caught back, you will often be beaten badly.

　　"The electric fraud park is like a black hole." Many suspects said that they were introduced by friends at first, or they were cheated by "high salary" when looking for a job online, and then they crossed the border and plunged into the electric fraud park. While engaging in fraud activities, they also lost their freedom … …

　　The prosecution intervened in advance:

　　Knock out 21 fraud gangs

　　The police went to many provinces and arrested 1090 people.

　　Qiao Jun was deeply impressed by a female suspect named Qiqi. She met a boyfriend from Chongqing in an electric fraud den in northern Myanmar. After they came back, they had planned to get married and "live a down-to-earth life". However, the justice of the sky was restored, and the couple were finally arrested by the police. On the way back from the escort, Qiao Jun heard the girl get a call from her prospective mother-in-law and asked when they would go back for dinner.

　　This female suspect named Qiqi cooperated more during the trial and honestly explained many questions. Qiao Jun said that during the trial, such suspects are rare, and many suspects will try their best to erase their criminal acts, saying that they sell barbecues, drive taxis and have haircuts there … … But the interrogator knew clearly, "There is no such thing as so much work in that small place in Mengbo."

　　In the face of a large amount of evidence held by the police, the suspect can only be honest in the end. Qiao Jun said that many suspects and victims were "screened out", and they were "screened" one by one through time points, fraud platforms, associated bank cards, and the existence time of their dens, and then cross-checked according to the suspects’ accounts, and finally the criminal facts were fixed one by one.

　　Liu Hao told Red Star News reporter that there was no victim to report the case at first, and the facts of the crime were unclear at first. In addition, the location of the crime was in northern Myanmar, and it was impossible to collect fixed on-site evidence and tools for committing crimes, which made it extremely difficult to handle the case. The early intervention of procuratorial organs has greatly helped the police to find and fix evidence in a targeted manner.

　　With the concerted efforts of Nanchong police and procuratorial organs, the case-handling personnel finally locked the identity information of more than 2,000 suspects in buildings such as "Little Eight-story Building", "Three-story Building" and "Caigang shed", and identified 21 fraud gangs of different sizes and unrelated.

　　From the beginning of 2022 to the middle of 2023, Nanchong police carried out several rounds of arrests in 23 provinces including Fujian, Sichuan, Guizhou, Yunnan and Zhejiang, and arrested 1090 suspects. Under the overall planning of Nanchong City Procuratorate, the procuratorates of all districts and counties in Nanchong City intervened in the case investigation in advance, and quickly arrested and prosecuted. At present, nearly 1,000 people involved in the case have been tried and closed.

　　At the same time, in the process of handling this case, Nanchong police have also mastered the clues of more than 30 other electric fraud gangs, and these clues have been handed over to the higher public security departments.

　　Red Star journalist Yang Ling Wang Chao Photo courtesy of the police.