State auto group is first to dual list

Liu Qi (left), a member of the Political Bureau of the CPC Central Committee, and Kenyan Prime Minister Raila Odinga unveil the company name plaque of Foton Motor Kenya Ltd at a founding ceremony in Nairobi on Monday. Chinese automaker Foton Motor also opened a US$50 million assembly plant in Nairobi on Monday to explore the market in Kenya and east Africa.

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GUANGZHOU Automobile Group Co will float its shares on the Shanghai Stock Exchange tomorrow as it completes the last stage of its dual-listing scheme.

Guangzhou Auto, the Chinese partner of Japan's Toyota Motor and Honda Motor, will issue 286 million shares at 9.09 yuan (US$1.44) each to merge with its subsidiary, GAC Changfeng which was delisted from the exchange on March 20, according to its filing to the bourse yesterday.

The float will see Guangzhou Auto becoming China's first state-owned auto group to list on both the mainland and Hong Kong markets.

After the listing, Guangzhou Auto will set up a 50-50 joint venture with Japan's Mitsubishi Motor to make vehicles domestically.

Industry analysts welcomed the move, with Huachuang Securities saying in a note that Guangzhou Auto would benefit as Chinese consumers preferred the mid-to-high range vehicles that it makes with its joint venture partners.

"As Toyota and Honda are on track to regain a faster growing momentum in China, Guangzhou Auto's competitiveness will also be boosted," the brokerage added.

Guangzhou Auto joined with Toyota to make Camry and Yaris models while Guangzhou Honda produces Accord and Fit cars.

Guangzhou Auto said its net profit fell to 4.27 billion yuan last year from 4.29 billion yuan in 2010 after the March earthquake in Japan disrupted core parts supply and industry-wide sales slowed down.

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