(Yicai Global) Dec. 6 -- The stock price of Jiangxi Special Electric Motor, also known as Jiangte Motor, dropped after the specialty motor maker said it plans to sell its unprofitable new energy vehicle unit to a government-backed investment firm and will focus on battery raw materials and motor production.
The company's shares [SHE:002176] fell 2.4 percent today to close at CNY3.25 (US 46 cents) each. Jiangte Motor has slumped 45 percent so far this year and is not far above a 52-week low of CNY3.06 reached in the middle of last month.
Jiangte Motor will sell Jiangsu Joylong Automobile for CNY513 million (USD73.3 million) to a company under the city government of Yangzhou in Jiangsu province, it said in a statement yesterday. That is over 80 percent less than what the firm paid for it four years ago.
Jiangte Motor has expanded its lithium compounds, hydroxide and cathode materials output in recent years but its loss-making NEV business has held back overall growth. This year's NEV subsidy cuts also have not helped the lesser-known carmaker to increase its market share.
Joylong Auto would put pressure on Jiangte Motor's cash flow in the next few years so it decided to sell the unit at a discounted price, the Yichun, Jiangxi province-based company said. The divestment will make a big dent in this year's earnings, it added.
Joylong Auto has a total annual capacity of 150,000 units, including passenger cars, buses, and logistics vehicles.
Editor: Emmi Laine