Joyson Electronics sold shares in Joyson Qunying 51 to further focus on the company’s strategy and forward-looking direction

On the evening of November 26, Ningbo Joysheng Electronics Co., Ltd. (hereinafter referred to as "Joyson Electronics") announced that on November 24, the company entered into an agreement with Guangdong Xiangshan Weighing Instrument Group Co., Ltd. (hereinafter referred to as "Joyson Electronics"). Xiangshan Shares" signed the "Share Transfer Agreement" and the "Performance Commitment and Compensation Agreement", stipulating that Xiangshan Shares will pay cash to the company to purchase Ningbo Joyson Qunying Automotive Systems Co., Ltd. (hereinafter referred to as "Joyson Qunying") held by it. ") 51 shares, the total transaction amount is 2.04 billion yuan.

Image source: Screenshot of Joyson Electronic Announcement

According to the announcement, Joyson Qunying was established in November 2001 , with a registered capital of 993 million yuan, the shareholder structure is Joyson Electronics holding 71.85 shares, Ningbo Joyson Technology Co., Ltd. holding 23.95 shares; Ningbo Junhao Enterprise Management Consulting Partnership (Limited Partnership) holding 2.32 shares, Ningbo Junxiang Investment Management Partnership (Limited partnership) Shareholding 1.89.

Looking back at the entire development history of Joyson Electronics, according to the official timeline given by Joyson Electronics, in March 2019, Joyson Electronics, a subsidiary of Joyson Electronics, Automotive Electronics merged with Germany's Qunying to form the new Joyson Qunying Automotive Systems Company.

Among them, the former has R&D and production bases in Ningbo, Wuhan, Chengdu, Changchun, Nanjing and other places, and its core products cover air management. Systems, engine air intake systems, washing systems, rearview mirrors, fuel filler doors and other high-end functional products have successively become excellent partners of global automobile manufacturers such as BMW, Daimler, Volkswagen, General Motors, Ford, and PSA.

The latter is a global high-end automotive interior parts assembly supplier (QUIN? GMBH) acquired by Joyson Electronics in 2014. It is headquartered in Stuttgart, Germany, and has operations in China, Romania, Mexico, Poland and other countries. It has a production base and provides products for high-end users such as Mercedes-Benz, BMW, and Audi in the fields of real wood, aluminum decoration, and carbon fiber.

Joyson Qunying’s global base layout; Image source: Screenshot of Joyson Qunying’s official website

The merger of the two supports Joyson Electronic Function Division to become more powerful. At present, this division covers high-voltage charging and distribution units, turbocharged intake and exhaust systems, body cleaning systems, and air. Management systems and other high-end interior parts, most of the product market shares rank among the top in the Chinese market.

According to Joyson Electronics’ financial report, in 2019, Joyson Qunying was attributable to shareholders of the parent company. The profit was 142 million yuan, accounting for 15.11% of Joyson Electronics’ net profit attributable to shareholders of the listed company; in the first nine months of 2020, Joyson Qunying’s net profit attributable to shareholders of the parent company was 125 million yuan, while in the same period, the parent company Joyson Electronics was listed The company's shareholders' net profit is -282 million yuan. It is not difficult to see the contribution of Joyson Qunying to Joyson Electronics' profits.

If this is the case, why is Joyson selling a subsidiary with a profit of hundreds of millions a year? Electronics pointed out in the purpose of the transaction that through years of development, the company has become a top supplier in the global automotive safety and automotive electronics fields. In the future, the company will focus more on its main business directions such as active and passive safety, autonomous driving, Internet of Vehicles, and smart cockpits. Increase resource investment in lidar, domain controllers, 5G-V2X, new energy vehicle electronic control management technology, etc., and establish a new global R&D center in Shanghai to promote further upgrading of global business.

Joyson Qunying, the asset owner of this transaction, is mainly engaged in business related to automotive functional parts. It has been developing well in recent years and still has a lot of room for development. However, the resource support received from Joyson Electronics is limited. Through this transaction, Joyson Electronics can further focus high-quality resources on the company's strategy and forward-looking direction, which will also help Joyson Qunying obtain more resource support to achieve rapid development.

At the same time, according to this transaction plan, the company authorizes Joyson Qunying to continue to use the company's related brands for free in accordance with the "Brand License Agreement" in the next three years, and transition to its establishment of independent brands.

In addition, when the two parties signed the "Share Transfer Agreement", they also signed the "Performance Commitment and Compensation Agreement" and made the following main agreements on performance commitment and compensation matters: The agreed performance commitment period shall be the completion of the implementation of this transaction. For the next three consecutive fiscal years, namely 2021, 2022 and 2023; Joyson Electronics promises that the target company will deduct non-net profits cumulatively not less than 900 million yuan during the performance commitment period. If the performance commitment is not fulfilled, Joyson Electronics will make corresponding compensation.

Joyson Electronics said that through years of development, the company has become a top supplier in the global automotive safety and automotive electronics fields. In the future, the company will focus more on active and passive safety, Internet of Vehicles, smart cockpits, autonomous driving, etc. Main business direction, resource layout and development. Through this transaction, Joyson Electronics can further focus high-quality resources on the company's strategic direction, which will also help Joyson Qunying obtain more resource support to achieve rapid development.

This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.