By ZHOU Shuqi
Chery Automobile is reportedly gearing up for a renewed IPO attempt, with plans to list on the A-share market by 2025. Given the current state of IPO approvals, it's far from certain whether Chery can pull it off this time.
Analysts point out that, from the company’s perspective, now is a relatively good time for Chery to restart its IPO, as its finances and sales look positive.
This year, Chery has sold approximately 1.7 million vehicles, close to fifty percent more than last year’s total. Revenue for the first three quarters was 213 billion yuan (US$30 billion), again surpassing the full-year total for last year.
However, from a capital market perspective, the timing may not be the best.
The overall market environment is unfavorable. Regulatory scrutiny has increased and the difficulty of going public is high, and the company’s valuation may not be ideal.
Chery needs to expand its financing channels, but an IPO is only one way to do that. Historically, Chery’s funding has come from banks. Listing of promising subsidiaries may help Chery secure funds for its transition to new energy and prepare for the intense competition in the EV industry.
Chery is one of the few complete vehicle manufacturers in China that has not yet gone public but began trying as early as 2004. The IPO plan was shelved at the end of that year. Later, influenced by the global financial crisis and operational difficulties, the company attempted an IPO several times without success.
Around 2015, Chery Holdings decided to take its more advantageous sectors to the capital market by listing its subsidiary companies within its system. Chery New Energy and Chery Huiyin applied for IPOs, but these good intentions met the same end as all previous attempts.
In 2020, Chery overhauled its ownership structure, bringing in the Wudaokou New Energy, to expedite the IPO process.
At the time, a Chery spokesman said: “The purpose of Chery’s capital increase and share expansion is to reduce financial costs and seek an IPO. Chery aims to change its mechanism and enter the capital market through mixed ownership.”
