BAIC Motor eyes Hong Kong IPO later this year

BAIC Motor Corporation Ltd, a subsidiary of China's leading automaker BAIC Group, is planning to get listed on the Hong Kong stock market in the second half of this year, media said late Tuesday, citing the group's chairman Xu Heyi.

Xu said the company is planning to raise 10 billion yuan ($1.61 billion) to 20 billion yuan in the listing, news portal finance.qq.com reported.

Xu disclosed the information at the annual Boao Forum for Asia, which is running from Tuesday to Friday this year.

The company originally intended to seek a dual listing on both the Hong Kong and mainland capital markets, media reported, but Xu told the portal that there is still no clear timetable for the company's IPO plan in the mainland market.

BAIC Motor was founded in 2010, and the group has been working on the subsidiary's IPO since then. But the listing has been delayed as the company wanted to consolidate its joint venture assets into the IPO, media reports said.

In February 2013, the group's German partner Daimler agreed to buy a 12 percent stake in BAIC Motor. In another aspect of the agreement, BAIC Group raised its stake in the Mercedes-Benz joint venture with Daimler from 50 percent to 51 percent, which enables BAIC Group to consolidate the joint venture prior to the IPO.

Zhang Yu, managing director at consultancy Automotive Foresight (Shanghai) Co, told the Global Times Wednesday that capital raised in the IPO could be used to purchase more technologies and to expand capacity, and getting publicly listed could push the company to improve its management.

Zhang also noted that lack of capital is a major factor hindering domestic automakers.

In 2013, BAIC Group ranked fifth among domestic automakers in terms of sales. The company sold a record 2.16 million units of cars last year, but the number is small compared with the 5.1 million sold by industry leader SAIC Motor.

"The BAIC IPO will draw wide attention in the Hong Kong capital market, given its size," Wan Ge, an analyst at ChinaVenture Investment Consulting Ltd, told the Global Times Wednesday.

In the first quarter, IPO deals in the Hong Kong bourse raised HK$46 billion ($5.9 billion), up 461 percent compared with the same period in 2013. The number of IPOs also increased 109 percent year-on-year to 23 in the quarter, a report from accounting firm Deloitte said Tuesday.

Both the number of IPO deals and money raised has reached a record high in the first quarter.