Guangzhou Automobile Group Corp (GAC), one of China's major automakers, yesterday reaffirmed that it was looking at an initial public offering (IPO) when the time was right.

GAC still keen on public float [CFP]

"We will choose an adequate time to go public in terms of the market conditions," said Zeng Qinghong, general manager of GAC, at a press conference during the ongoing 2009 Shanghai auto show.

Zeng said the GAC had submitted the listing proposal to the China Securities Regulatory Commission (CSRC) last year, and that the approval was pending. He did not reveal whether the company would be listed in Shanghai or Hong Kong.

Media reports late last year said that the company had delayed the listing due to the credit crunch in the aftermath of the financial crisis that also slowed growth in China's automobile market.

Zhu Siming, senior auto analyst with Frost & Sullivan, said that, for capital-thirsty automakers in China, raising money from the stock market would be the best to boost production capacity and obtain new technologies.

GAC is smaller in comparison to the nation's bigger players such as SAIC, Dongfeng and FAW, so an IPO will be especially helpful to gain better market share in China, he said.

Zhu added that GAC might have to wait for a while, at least until the end of this year to get listed, as it is still unclear when the auto market in China will recover.

"China's GDP rose a mere 6.1 percent in the first quarter, and it is hard to judge whether the economy will go up in the second quarter. So, right now, I don't think it is the adequate time for GAC's listing."

GAC said yesterday it will continue to seek mergers, acquisitions and joint ventures, and the company was planning to test the waters in the auto financing and auto insurance market by launching related companies in these two fields.

It also said that its heavy truck joint venture with Toyota's Hino Motors will begin production in August, further enhancing GAC's capacity in the commercial vehicles sector.

GAC is bringing its self-developed and own-brand VIP-Lounge concept car, the crossover multipurpose city car AHEV (advanced hybrid electric vehicle), and its 4-door coupe to the Shanghai show, together with the Accord, Fit, Camry and Highlander it produced through its JVs with Japan-based Honda and Toyota.

In the first quarter of this year, GAC sold a total of 115,000 with sales revenue of 23.15 billion yuan.

(China Daily April 21, 2009)