(Yicai Global) March 29 -- Shares of China's Sinomach Automobile rose after a portfolio company of the state-owned importer of Volkswagen and Buick vehicles was said to be close to selling equity to ride-hailing giant Didi Chuxing.
Sinomach Auto's stock price [SHA: 600335] moved up 3.7 percent to close at CNY9.65 (USD1.40) after jumping 10 percent intraday today and yesterday.
Sinomach Zhijun Automotive, a Jiangxi province-based new energy vehicle manufacturer that has paused production for six months, is almost ready to secure an investment from the Chinese ride-sharing giant, financial media outlet Daily Economic News reported yesterday, citing a local official. Sinomach Auto is the largest shareholder of the NEV firm with its 40 percent stake, according to public information.
Sinomach Zhijun is in business talks with several potential investors but no final results have been achieved, the car distributor said in a statement yesterday, adding that it has disclosed all the necessary facts.
Reuters reported in June 2022 that Didi Chuxing aims to acquire more than CNY1 billion (USD150 million) of equity in Sinomach Zhijun from minority shareholders and inject new capital into the firm.
Sinomach Auto, a subsidiary of state-owned tool manufacturing giant China National Machinery Industry, has boosted its gains despite falling sales as in the first three quarters of last year, net profit rose 31 percent to CNY247.2 million (USD35.9 million) from a year ago, and revenue declined by 11 percent to CNY28.1 billion (USD4.1 billion), according to its latest financial report.
Editor: Emmi Laine, Xiao Yi