Breaking News! Dongfeng Group Shares Announce Overnight Announcement: Planning to Privatize and Prepare for Hong Kong IPO
August 22nd evening, Dongfeng Group Shares (00489.HK) released an announcement stating that its subsidiary Luntan Automobile will list on the Hong Kong stock exchange through an introduction method, and Dongfeng Group Shares will complete privatization at the same time. Prior to this, Dongfeng Automobile Shares suspended trading from August 11th to present.
Photo source: Time Weekly reporter's photo taken in Wuhan
According to the announcement, this transaction will adopt a combination mode of "share issuance + absorption merger". The two major core nodes are mutually dependent and pushed forward simultaneously. In the first node, Dongfeng Group Shares will distribute its holding of Luntan Automobile shares with a ratio of 79.67% to all shareholders, followed by Luntan Automobile listing on the Hong Kong Stock Exchange.
In the second node, Dongfang Auto (Wuhan) Investment Co., Ltd., a wholly-owned subsidiary of Dongfeng Group, will be absorbed and merged with Dongfang Group Shares, paying cash compensation to non-controlling shareholders and achieving 100% control over Dongfang Group Shares.
The total acquisition price for this transaction is HK$10.85 per share, including HK$6.68 in cash compensation and HK$4.17 in Luntan Automobile shares. As of July 31st, 2025, the total value of Dongfeng Group Shares was HK$391.2 billion, with a closing price of HK$4.74 per share.
This time, one retreats and another advances can be described as "swapping birds". On this, Dongfang Group Shares stated: "Compared to the long-term undervaluation of our company's value, the new listing platform Luntan Automobile will have a clear independent valuation reflecting its performance and potential, becoming a more attractive investment target."
The company also stated that due to industry transformation pain and other factors, Dongfeng Group Shares' estimates have been low in recent years, with the stock's market value long being far lower than its net asset value. As of July 31st, 2025, Dongfeng Group Shares' PB ratio was only 0.25 times.
Due to the valuation situation, Dongfang Group Shares has not conducted a capital increase since listing and has basically lost its ability to raise funds on the Hong Kong stock exchange.
Compared to Dongfeng Group Shares' undervalued performance, Luntan Automobile, as a high-end new energy brand developed by Dongfang's own hands, has maintained good development momentum in recent years and is one of the most valuable and growth-oriented assets under Dongfang Automobile.
In 2024, Luntan Automobile delivered 85,697 vehicles, a year-on-year increase of approximately 70%. Since 2025, Luntan Automobile has continued to break through the sales mark for five consecutive months and has exceeded 12,000 deliveries in July.
After listing on the Hong Kong stock exchange, Luntan Automobile is expected to further stimulate its value creation capabilities, fully releasing its potential for growth.
The specific listing date for Luntan Automobile has not been determined. However, relevant personnel of Dongfang Group Shares have informed Time Weekly reporters that this period typically takes around 3-6 months. "Now it's just starting to announce the start (listing)".
On the same day as the announcement of privatization and Luntan Automobile's planned listing on the Hong Kong stock exchange, Dongfang Group Shares also released its interim report for the first half of 2025.
In the first half of the year, Dongfeng Group Shares generated revenue of HK$545.3 billion, up from HK$511.5 billion in the same period last year. The company's net profit attributable to shareholders was HK$0.55 billion, down from HK$6.8 billion in the same period last year. The group sold approximately 823,900 vehicles in the first half of the year, a decrease of 14.7% year-on-year.
Dongfang Group Shares is an listed company under Dongfang Automobile Group. On August 1st, Dongfang Automobile Group held a press conference to announce the establishment of Dongfang Eve Technology Co., Ltd. From then on, Dongfang Automobile Group's self-owned brands will be focused on high-end markets (Luntan), mainstream markets (Eve Technology), and off-road markets (Dongfang Wild Eagle).
Among the three major self-owned brands, Luntan will be the first to list on the public capital market.