Xu Heyi's retreat into Wang Jinyu's regret and leave Futian's high-level upheaval has been foreshadowed two years ago?

On November 3, Foton Motor issued several announcements in a row, announcing that Wang Jinyu, who had been in charge of Futian for more than 20 years, had resigned because of illness. At the same time, Xu Heyi, chairman of the controlling group Beiqi Group, had also resigned as chairman of Foton. Both leaders resigned at the same time. For a time, the industry was scratching their heads. The first reaction was to follow the two trains of thought. First, the relationship between Beiqi and Futian's long-term restrictions and counter-restrictions, and the two competing forces of Xu Heyi and Wang Jinyu. In the past, the second is a worrying Baowo, Wang Jinyu into a passive.

However, the fact is that the “industry competition” promises signed by the industry two years ago that have been forgotten by the industry have long been buried under this personnel shake. On October 29, 2015, Foton Motor had issued an announcement and announced the launch of the sedan business. At the same time, it announced the agreement reached between the two parties on the possible competition with the Beiqi Group, which is a subsidiary of BAIC Motor Corporation, in the same industry competition. A Beifang Group or Beiqi Group will entrust a third party to acquire the Foton sedan business, or acquire the entire Foton Motor. Afterwards, Foton developed a high profile. There is no comment on this commitment letter.

On October 16 this year, after nearly three years of listing in Hong Kong, Beijing Auto (Beiqi Hong Kong listed company) issued an announcement announcing the launch of the A-share listing plan. This means that Beijing Auto Group will face the situation of controlling two A-share listed car companies, and all of them are engaged in the passenger vehicle business. “The existence of listed company Foton Motor determines that as long as Beiqi returns to A-shares, it will inevitably face competition with the industry. If the issue is not resolved, the SFC will definitely not approve the A-share IPO application, said Cao He, chairman of Zhongrong Venture Capital Management (Beijing) Co., Ltd. After Beiqi Co., Ltd. announced the launch of the A-share listing, how Beijing Auto Group adjusted the role of Futian Automobile under the management of Wang Jinyu became the most critical link.

Obviously, no matter from which perspective, the agreement two years ago reached the time of performance. There are only two choices, "Either BAIC shares will be listed on the shell of Futian or Futian will be included in the new listed company of Beiqi," said Cao He, which is not what Wang Jinyu would like to accept. Therefore, Wang Jinyu, who was unable to resist the general trend, chose Xu Huiyi to withdraw from Fukuda and hand over the baton that had been in charge for more than 20 years.

Xu Heyi's progress

Regarding Xu Heyi’s resignation, the insiders of the Beijing Automotive Industry Group stated that it was not sudden. “The SASAC has demanded that the top leaders of the SOE Group should not be too many of the top leaders of their subsidiaries.” Prior to that, Xu Heyi was the head of almost all subsidiaries of BAIC Group. “Xu Heyi's resignation is well understood,” said Cao He. However, his identity conflict is mainly because Xu Heyi is currently the Chairman of Beijing Auto, which is listed in Hong Kong, and the Chairman of Foton Motors listed on the Mainland, and BAIC has announced it soon. Returning to A shares, Xu Heyi will serve as chairman of the two A-share listed car companies at the same time. This is not allowed by the SFC and is also one of the directions for the elimination of state-owned enterprise reform.

Of course, this is also the main reason that prompted Xu Heyi to step down as chairman of Foton Motor. However, for the upcoming Beiqi A-share listing, this is obviously a withdrawal. This year, after planning for nearly five years, BAIC has finally started the specific timetable for returning to A-shares. On the evening of October 16, Beijing Auto's Hong Kong-listed company Beijing Auto (1958HK) announced that it plans to issue initial public offerings of A shares and to list on the Shanghai Stock Exchange.

Analysts pointed out that the initial financing (IPO) in the H-share listing or overseas markets is relatively easy, and it is difficult to refinance, so returning to the A-share market becomes a better choice. This is also considered to be the main reason why BAIC returned to A shares. "To break the stalemate, Xu Heyi is also retreating and completing the overall situation of Beiqi," an analyst pointed out.

However, less than 20 days after the announcement of the news, it was apparently not coincidental that Wang Jinyu handed over Fukuda management rights at the same time. “Individual factors are not likely to dominate, and it is very likely that the Beijing SASAC is leading,” a number of industry sources interviewed by the Economic Observer reported. As far as Wang Jinyu is concerned, it is obviously an excuse to “retreat”.

Since Futian was brought from Shandong to Beijing in 1996, to become a commercial vehicle leader, and now to be a commercial and transportation company, Wang Jinyu, who is in charge of Futian for more than 20 years, has been getting closer to building a full-fledged Foton Motor Group. It was precisely because of the strong sense of independence of the “small group” and the persistence of the “moths and flames” type dream of passenger cars that was part of Beijing Auto Group’s affiliation. Wang Jinyu was forced into the end of his active resignation. Industry insiders expect that the secretary of the Party Committee of Futian Automobile, which Wang Jinyu has also retained, may also step down later.

Before this time, there were always rumors of Wang Jinyu and Xu Heyi, but in the end both parties chose to live in harmony. Therefore, Wang Jinyu’s withdrawal from the bureau by illness was speculated to be a decision that was under pressure and unwilling. The source of the pressure is the tripartite cooperation of Beiqi Co., Ltd.'s return to A-shares and Baowo's trouble, and Futian’s promise to acquire it two years ago.

Are passenger cars troubled?

When Xu Heyi withdrew from Futian, it was when Wang Jinyu left office. As time went back two years ago, all this seems to have been doomed. On October 29, 2015, Foton Motor announced the announcement of the "Proposal on Developing Cars and Resolving the Competition in the Same Industry" (hereinafter referred to as the "Proposal"), announcing that it will explore the profit growth point and expand the car business. However, because the controlling shareholder Beiqi Group's other listed company, Beiqi, is also engaged in the sedan business, the two parties have set a solution to the competition in the same industry and the subsequent capital operation of BAIC.

The plan is: When the business development of both parties needs to eliminate the competition in the same industry, or when the regulatory authorities require the settlement of the competition in the same industry, BAIC has the right to take at least four measures: 1. Beiqi Motor Co., Ltd. to purchase the Foton automobile sedans business; Consolidation of Foton Motor; 3. Other entities designated by BAIC Group implement the first and second items; 4. Other appropriate measures taken by BAIC Group and other entities designated by it.

Foton Motor Co., Ltd. promised to compete in the same industry. The acquisition of its sedans business by Beiqi Co., Ltd. or the acquisition of Foton Motor Co., Ltd. became the preferred solution. Now, with the launch of Beijing Auto's plan to return to A shares, competition in the industry has become the first problem to be solved. From the perspective of the B shares of the A shares listed on the stock market, including the long-lived backdoor Fukuda, as well as separate IPO two routes, but now, the former is unlikely. If the latter is implemented, in order to eliminate peer competition, Foton Motors is faced with being injected into a new listed company, becoming a subsidiary of Beiqi Co., Ltd., and the outcome of the shell resource being sold is definitely unacceptable to Wang Jinyu. “Beiqi even acquired the Foton passenger car business from Foton, forming a passenger vehicle listed company under the Beijing Automotive Group and a commercial vehicle listed company. However, all of them are BAIC Group’s holdings, all of which are listed on the A-share market. The Commission has been able to pass this closure." Cao Crane said.

On the other hand, although the performance of Foton's passenger vehicle segment, Baowo Zhongdao, was not a threat to BAIC's passenger vehicle business, it also consumed a lot of money. Due to Wang Jinyu's persistence, after Futian spent a lot of capital on Baowo, its development inevitably required more capital input from BAIC. At the same time, as the largest shareholder of BAIC Group and the second largest shareholder, Beijing’s state-owned capital management The interests of the center are also at risk of damage. According to sources from Baowo, starting from the start of the revival of the Baowo brand in 2005, Foton has invested more than RMB 10 billion in 10 years.

A few days ago, Futian's news about the sale of Baowo suddenly came out, and it became a response to the same-sex competition agreement of the same year.

Due to Wang Jinyu's relatively independent management structure in Foton, Beijing Auto Foton is also only a contributor, and it is unable to provide management and decision-making. On the way to Beijing Capital Group’s move to the capital market, this kind of fictitious parent-subsidiary company relationship also determines the integration of Futian sooner or later.

If we say that two years ago, the dream of the car had forced Futian and Beiqi into a negotiation table. This time, Wang Jinyu pushed himself out of the game. According to industry analysts, Gong Yueqiong, the successor of Zhang Xiyong, who succeeded Xu Youyi and Wang Jinyu in the same birth of Futian, to replace Wang Jinyu, was also considered a compromise between the two parties (Beiqi and Futian). For Wang Jinyu, who is only 54 years old, the industry generally believes that he will not rule out returning to Shandong to set up a separate stove and do another business.