In the expansive landscape of China's automotive industry, Chery Automobile stands out as a renowned playerThis company captured the spotlight with its immensely popular QQ model, which reached global audiences and became a symbol of affordable cars in the early 2000sHowever, despite its achievements, Chery has intriguingly remained one of the few major domestic car manufacturers that have not gone public, leading many to question why the company has chosen this moment to pursue an IPO (Initial Public Offering).

Reports from the Blue Whale News indicate that Chery’s management has confirmed plans for an IPO set for 2025, though details regarding the stock exchange—whether it will target Hong Kong’s stock market—remain under wrapsAmidst this, Chery Holding Group, the parent company, has recently welcomed investments from firms like Qingdao City Investment Group, IDG Capital, and Huoyan Investment, marking a significant development in its journey toward becoming a publicly traded entity.

Furthermore, a shareholder restructuring at Chery Holding saw three firms from Qingdao City Investment emerge as new stakeholders, likely signaling a strategic move to facilitate Chery's IPO

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Historically, Chery has toyed with the idea of going public since 2004 but saw its plans thwarted multiple times due to market conditions, including the global financial crisis and fluctuations in its own financial performanceDespite aiming to begin its IPO process as early as 2004, the company only began focusing on injecting capital through advantageous segments in the past few years.

The road to IPO has been tortuous for CheryIn September 2024, at the “Yaoguang 2025 Chery Technology Day,” Chairman Yin Tongyue publicly reaffirmed the company’s commitment to completing its IPO before the year's endSuch a move is projected to not only strengthen Chery’s capital reserves but also invigorate its equity incentive mechanisms for employees.

Recent figures reveal a bullish outlook for Chery, reporting sales of 2.6039 million vehicles in 2024—a 38.4% increase over the previous year, with exports exceeding 1.14 million units, solidifying its position as the leading Chinese brand in the global automotive export market for 22 consecutive years.

Chery’s previous attempts to initiate an IPO, which include various strategies like shell acquisitions and cross-shareholding with other automakers, have ultimately fizzled due to various internal and external factors

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With experienced executives like former Deputy General Manager Lu Jianhui announcing cries for funding as high as 30 billion CNY in the years leading up to 2015, it's clear that Chery has grappled with financial constraints, often looking to an IPO as a remedy.

Chery’s last major push for an IPO faced setbacks due to the 2008 financial crisis, precipitating significant financial losses and a complete halt to its IPO endeavorsThe company’s challenges reflect broader industry dynamics, with complex equity structures and issues around achieving consistent profitability proving to be significant barriers to initial public offerings in China.

Despite these historical hurdles, recent developments indicate a shiftChery's operational performance has witnessed marked improvement, with rising sales and favorable financing terms from banks indicating a more solid foundation for a successful IPO

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The influx of new investment through strategic partnerships with firms such as Qingdao City Investment is seen as a crucial step toward achieving public market aspirations.

Market conditions for the domestic auto industry have also changed significantly over the yearsFollowing a remarkable evolution of Chinese automotive brands, many have now found their footing and are mounting serious competition against established foreign brands that once dominated the market landscapeThe tides have shifted dramatically as consumers increasingly embrace domestic brands, with innovative technological advancements and improved product quality becoming the hallmarks of success.

Especially in sectors like electric vehicles (EVs), companies like BYD have emerged as international leaders, pushing boundaries in battery technology and gaining substantial market share both domestically and abroad

Rising players like Nio, Xpeng, and Li Auto have also revolutionized the EV segment by leveraging cutting-edge technology and unique business models, thus galvanizing the market further.

Amidst this backdrop of fierce competition, securing sufficient capital has become ever more crucial for car manufacturers to invest in research and development, expand production capabilities, and enhance marketingFor Chery, the upcoming IPO signals a pivotal opportunity to rally public investment, allowing for a reinvigorated competitive stance in the burgeoning automotive market.

Industry examples abound; for instance, Geely—one of Chery's contemporaries—has successfully listed multiple subsidiaries, thereby raising significant capital to bolster its various initiativesGeely effectively utilized public markets to finance technological advancements and acquisitions, such as its noted purchase of Volvo, enhancing its footprint within the global automotive realm.

Chery, while boasting a diverse product lineup and a legacy of innovation—evident in its proprietary engine technologies—must recognize its capital limitations in comparison to the likes of Geely

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The historical reliance on internal funding channels and limited access to broader financial markets has constrained Chery’s growth potential, necessitating a pivot toward strengthening its capital base through an IPO.

As the Chinese stock market, particularly the A-share and Hong Kong exchanges, exhibits increasing acceptance of automotive brands, especially in the green energy domain, the timing for Chery’s public offering seems ripeThe wave of interest driven by global environmental concerns and the shift toward sustainable transportation further cultivates a nurturing environment for prospective investors.

In conclusion, while Chery's moment to go public appears to have arrived, the road ahead is paved with notable challengesTo truly captivate the imagination of investors, Chery must articulate a compelling narrative that outlines its ambitions, illustrates its capacity for innovation, and highlights its strategic market positioning