Cyrus did it again.
On November 27th, Cyrus Group Co., Ltd. (hereinafter referred to as “Selis”) announced that it would spend 8.
164 billion yuan to acquire a 100% stake in Longsheng New Energy Technology Co., Ltd. (hereinafter referred to as “Longsheng New Energy”) in Chongqing Liangjiang New District.
To achieve complete control of the Chongqing “super factory”.
Photo source: Selis announcement screenshot, the multiple benefits of acquiring a super factory, Selis has a long history of cooperation with Longsheng New Energy.
Longsheng New Energy is an important part of the Intelligent Network United New Energy vehicle Industry Park in Longxing New City, Liangjiang New District, Chongqing, and its core asset is the super factory that integrates intelligence and automation.
The factory uses an advanced “four-in-one” intelligent manufacturing architecture, is equipped with more than 3000 robots, can automate key processes at 100%, and has a comprehensive quality monitoring and traceability system.
Thanks to the efficient operation of this factory, Cyrus successfully launched a series of smart electric vehicles, and achieved a lot.
However, with the intensification of market competition and the rise of raw material costs and other reasons, Cyrus realized that in order to ensure the stability and sustainability of the supply chain, it is necessary to further strengthen the control of the production side.
Therefore, after careful consideration, Cyrus decided to formally include the super factory in its territory through the acquisition of Longsheng New Energy.
From the point of view of the industry, this move has enabled Cyrus to firmly grasp the production supply chain and ensure that every aspect of the product is under the control of the enterprise.
In the current market environment, Xiaomi, Weilai, Xiaopeng and other enterprises are facing the challenge of capacity bottleneck, which has seriously affected their production and delivery capacity.
By contrast, Cyrus ensures the stability and adequacy of production capacity by keeping a firm grip on the super factory, which is essential for the smooth completion of order delivery and meeting market demand.
According to media estimates, if Cyrus spent 8.
164 billion yuan to buy a super factory, based on the rental income of 91.
0857 million yuan of Longsheng New Energy in 2023, this money is theoretically enough to cover about a year’s rent.
if we refer to the rental income of 86.
3492 million yuan in the first half of 2024 (which is close to the level of the whole of last year), it is enough to cover a lease period of about 47 years.
From a simple price comparison, it seems that leasing is more economical in the short term.
However, after in-depth analysis, it is not difficult to find that the “bargain” of leasing is not unassailable.
On the one hand, the lease price is affected by the fluctuation of market demand and there is uncertainty.
In fact, judging from the changes in rental income of Longsheng New Energy from 2023 to the first half of 2024, the rent level has been on an upward trend, and the rent within half a year has almost reached the level of the whole of last year, and the possibility of further rent increase in the future can not be ignored.
This means that lease costs are likely to continue to rise in the long run, undermining the “cost-effectiveness” of leases.
On the other hand, leasing factories cannot form their own fixed assets and have to bear hundreds of millions of yuan in cash flow expenditure every year.
By contrast, the acquisition of a super factory will give Cyrus full control of the factory and build a more complete, pre-evolved and intelligent production system.
China International Capital Corporation pointed out in his research report that the acquisition of “super factory” by SEO will significantly improve the asset integrity and control of Cyrus’s important business.
After the completion of the transaction, Cyrus’s asset-liability ratio and operating cash flow are expected to be improved.
In addition, the acquisition of the super factory also provides an opportunity for Cyrus to deeply bind with Chongqing state-owned assets.
According to the report, Cyrus intends to purchase 100% equity of Chongqing Liangjiang New area Longsheng New Energy Technology Co., Ltd. by issuing shares in Chongqing Industrial Investment parent Fund Partnership, Chongqing Liangjiang New area Development and Investment Group Co., Ltd., and Chongqing Liangjiang New area Industrial Development Group Co., Ltd. The background of these three enterprises is Chongqing state-owned assets.
After the completion of the acquisition, Chongqing state-owned assets will therefore become an important shareholder of Cyrus.
This move will not only enhance Cyrus’s capital strength, but also further consolidate its industrial position in Chongqing, and bring it more policy support and resource tilt.
In addition, in terms of capital structure, after the acquisition of Longsheng New Energy, Cyrus will no longer have to pay super factory rent, which will significantly improve the company’s operating cash flow, optimize its capital structure and reduce its asset-liability ratio.
In addition to the acquisition of super factories, Selis has also carried out a number of important acquisitions and capital increases this year, further consolidating its position in the new energy vehicle market.
Among them, Selis Motor, a wholly-owned subsidiary of Cyrus, plans to buy Huawei’s 10% stake in Shenzhen Wangwang Intelligent Technology Co., Ltd., for 11.
5 billion yuan.
This initiative aims to deepen cooperation with Huawei, upgrade the strategic cooperation between the two sides to “business cooperation + equity cooperation” through equity ties, and jointly promote the development of the new energy vehicle industry.
Source: Selis, September 13, Selis also plans to increase its capital by 5 billion yuan with its own funds to enhance its capital strength, optimize its capital structure, reduce its asset-liability ratio and promote its sustainable and high-quality development.
On August 9, Cyrus also examined and passed the “motion on the acquisition of minority shareholders in the holding subsidiary”, proposing to acquire the 19.
355% stake held by Chongqing Jinxin equity investment fund partnership (limited partnership), with a transaction value of about 1.
329 billion yuan.
Upon completion of the deal, Cyrus’s stake in Selis will increase to 100 per cent, further consolidating control of the subsidiary.
On July 2, Cyrus bought 919 registered or pending text and graphics trademarks and 44 related design patents held by Huawei for 2.
5 billion yuan.
According to the third quarter report of 2024 released by Selis, the company achieved revenue of about 106.
627 billion yuan in the first three quarters, an increase of 539.
24% over the same period last year.
At the same time, the net profit attributed to the shareholders of the listed company is about 4.
038 billion yuan.
This eye-catching performance not only demonstrates Selis’s strong profitability, but also provides financial support for its large acquisitions and capital increase activities.
On the whole, Cyrus is gradually building a more complete, pre-evolved and intelligent production system through the acquisition of super factories and a series of other acquisition and capital increase activities, which undoubtedly lays a solid foundation for its future development.
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