Heavyweight! Lingtu Automobile to List on HKEX, Parent Company Dongfeng Group to Conduct Private Placement
Dongfeng Group Shares (00489.HK) have been halted for over a decade, but the company has finally disclosed significant news.
On August 22nd evening, Dongfeng Group announced that its subsidiary Lingtu Automobile will list on HKEX through an introduction listing mode, and Dongfeng Group will simultaneously complete private placement.
According to the announcement, this transaction will adopt a combined mode of "share distribution + absorption merger", with two core stages proceeding in tandem. In the first stage, Dongfeng Group will distribute its 79.67% stake in Lingtu Automobile to all shareholders based on their holding ratio, and then Lingtu Automobile will list on HKEX through an introduction listing mode. In the second stage, Dongfeng Automobile's wholly-owned subsidiary, Dongfeng Automobile Group (Wuhan) Investment Co., Ltd., will be the absorber, paying stock-based compensation to the controlling shareholder of Dongfeng Group and cash-based compensation to other small shareholders, thereby achieving 100% control over Dongfeng Group.
This transaction adopts a combination of Lingtu Automobile shares and cash compensation, with a total purchase price of HK$10.85 per share, including cash compensation of HK$6.68 per share and stock-based compensation of HK$4.17 per share.
Source: Every Day Economic News
Dongfeng Group stated that due to industry transformation pain and other factors, Dongfeng Group's shares have had a low valuation performance in recent years, with the stock price long-term far below its net assets. As of July 31st, 2025, Dongfeng Group's total market value was HK$391.2 billion, with an end-of-day closing price of HK$4.74 per share and a PB ratio of 0.25. Under the valuation constraints, Dongfeng Group has not conducted any capital reorganization since its listing, effectively losing the financing function on the H-share platform.
In reality, Lingtu Automobile's independent listing has long been anticipated. As early as June 2021, Lingtu Automobile CEO Lu Fang publicly announced that Lingtu would establish an independent legal person company and launch employee shareholding plans, emphasizing "widespread use of capital market platforms". More importantly, he revealed that they had already determined their first strategic investor and would not seek pure financial investors, but rather industrial chain partners. This marked the beginning of Lingtu's mission to capitalize itself, rather than a traditional business department structure.
Since 2023, Lingtu Automobile has publicly discussed IPO possibilities multiple times. Lingtu Automobile CFO Shen Jun once stated "as long as we reach sales targets, we will immediately launch an IPO plan", and explicitly stated that "monthly sales reaching 10,000 units" is a necessary condition for listing.
Source: Every Day Economic News
In July, Dongfeng Group and Dongfang Asset Management invested in Lingtu Automobile, with Dongfang Asset Management investing HK$1 billion and recognizing approximately HK$949.7 million of registered capital. After the increase in capital, Dongfeng Group, Dongfang Asset Management, and other shareholders would respectively hold approximately 79.69%, 3.30%, and 17.01% stakes in Lingtu Automobile. On the reasons for the capital increase, Dongfeng Group stated that Lingtu Automobile needs to strengthen its research and development, branding, and marketing capabilities.
Financial data shows that Lingtu Automobile has reached a critical point of profitability, with its pre-tax loss narrowing from HK$19.8 billion in 2023 to HK$2.43 billion in 2024, and its post-tax loss synchronously narrowing to HK$1.8 billion, just one step away from achieving full-year profitability. Last year's fourth quarter saw Lingtu Automobile achieve a single-quarter profit.
It is not difficult to see that this year will be the key year for Lingtu Automobile to achieve self-financing. "Lingtu is relatively strong in China's high-end new energy market, and our per-vehicle profitability and overall profits are decent." CEO Lu Fang publicly stated in June.
Worth noting is that this year will be crucial for Lingtu Automobile, not only to achieve full-year profitability but also to strive for a sales target of 200,000 units. Official data shows that by the end of the first half of this year, Lingtu Automobile had sold approximately 561,000 units, up 85% year-on-year, leaving it still short of its annual sales target by over 140,000 units.
In this context, Lingtu has accelerated product launches and "embraced Huawei" to create more best-selling products, including Lingtu FREE+ and a new smart car model.