DONGFENG GROUP(HK:00489) Jing Ji Guan Cha Wang·2025-08-19 11:28Core Viewpoint - Dongfeng Motor is divesting assets, including a 50% stake in Dongfeng Honda Engine Company, to accelerate its transition towards new energy vehicles and optimize its asset portfolio [2][3]. Group 1: Asset Sale Details - Dongfeng Motor is selling a 50% stake in Dongfeng Honda Engine Company, currently in the pre-listing phase, with a deadline for bids set for September 12 [2]. - The engine company was established in May 1998, has a registered capital of approximately $122 million (about 873 million RMB), and employs 827 people [2]. - The engine company reported revenues of 9.566 billion RMB and a net loss of 228 million RMB for 2024, while in the first half of 2025, it achieved revenues of 3.807 billion RMB and a net profit of 371 million RMB [2]. Group 2: Strategic Rationale - The divestment is part of Dongfeng Motor's strategy to optimize fixed assets and incorporate new energy assets and technologies [3]. - Dongfeng Motor has previously sold its Wuhan Yunfeng factory for 723 million RMB to its subsidiary, Lantu Automotive, indicating a broader trend of asset optimization [3]. - The company is focusing on reducing and selling off joint venture brand assets while expanding its new energy brand portfolio [3]. Group 3: Market Context - Dongfeng Nissan has seen a decline in sales from over 1 million units in 2021 to around 600,000 units in 2024, leading to underutilization of production capacity [5]. - Dongfeng Honda's production capacity utilization was reported at 55.46% for 2024, which is better than Dongfeng Nissan's 43% [5]. - The engine company, with an annual production capacity of 480,000 engine assemblies, is viewed as a burden in the context of the accelerating transition to new energy vehicles [5].