New Express News (Trainee Li Chuan, Intern Zhang Huizhong) – FAW Xiali (000927) announced on Monday that it will acquire 100% of the shares in FAW Huali (Tianjin) Automobile Co., Ltd. for just RMB 300,000. This move marks another step in FAW Group's ongoing efforts to streamline its operations by divesting non-core and underperforming assets. The acquisition comes just months after FAW Group completed the restructuring of its largest subsidiary, FAW Foam, which had suffered significant losses. On the same day, FAW Xiali’s stock opened at 8.10 yuan and closed at 8.59 yuan, hitting a high of 8.79 yuan, reflecting a 3.49% increase. The stock performance suggests investor confidence in the company’s strategic moves. The deal was finalized through a share transfer agreement signed between FAW Xiali and FAW Group on March 25. Under the terms, FAW Xiali will pay the full amount within five working days. FAW Huali, a wholly-owned subsidiary of FAW Group, has been struggling for years due to outdated models and poor market performance. Production of the "Happiness Messenger" and "Terui" models was halted in 2007, leading to a prolonged shutdown. According to an asset appraisal report, FAW Huali's net asset value is only RMB 242,500, while its accumulated losses exceed RMB 130 million, making it heavily insolvent. Following the acquisition, FAW Xiali plans to integrate the assets and invest in new vehicle production, aiming to launch a new generation of cars currently in development. Analysts believe that this transaction is part of FAW Group's broader strategy to prepare for a potential overall listing. With SAIC and Dongfeng already listed, FAW Group has been under pressure to catch up. Since announcing its plan for a full listing in March last year, FAW Group has faced challenges in consolidating its assets. The recent divestment of FAW Huali, along with the earlier restructuring of FAW Foam, reflects a clear effort to separate good assets from non-performing ones. In less than 100 days, FAW Group has taken another step toward simplifying its structure, signaling its intent to streamline operations and pave the way for a more efficient and competitive group-wide listing in the future.

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