Great Wall Motor surges 22pc on plan to list A shares in Shanghai
Shares of Hong Kong-listed Great Wall Motor surged 22.28 per cent to HK$13.94 yesterday after announcing it had applied to the China Securities Regulatory Commission for permission to issue A shares on the Shanghai stock exchange.
Hebei-based Great Wall, the country's largest maker of pick-up trucks and sport-utility vehicles, said it planned to raise 9.6 billion yuan to fund research and development on SUVs and passenger cars.
Part of that money will be raised by issuing about 122 million shares on the mainland market. The company did not provide a time frame for the stock issue.
The company yesterday said that proceeds from the stock sale would be used to build a plant capable of making 100,000 automatic transmissions a year.
Great Wall also wanted to use the money to fund the research and development of high-performance diesel engines and advanced SUVs and sedans.
It also said that if the proposed A share issue was not sufficient to finance the new projects, the shortfall would be covered by the company's internal resources or bank loans.
The company in June said it would spend up to 10 billion yuan on expansion over the next three years, of which almost three billion yuan would be used to increase passenger car production capacity to diversify the company's offerings.
It planned to spend the remaining seven billion in the next three years on research and development, including vehicle components.
Mainland carmakers are stepping up the manufacture own-brand cars, a goal outlined in government's 11th five-year plan.
Hu Maoyuan, chairman of SAIC Motor Corp, said yesterday the output of Shanghai Auto's self-branded cars should exceed 600,000 units by 2010.
The company, the country's largest carmaker, launched its first Shanghai Auto-branded car, the Roewe 750, in January, targeting the mid-range market.