Sources revealed that the fundraising scale is expected to reach 6 billion Hong Kong dollars, surpassing the earlier estimated 500 million U.S. dollars. China National Heavy Duty Truck Group (CNHTC) has been quietly accelerating its plan to list in Hong Kong. A source mentioned that the company aims to go public overseas before year-end, with Hong Kong as the primary target. The funds raised are expected to hit 6 billion HKD, significantly exceeding previous expectations.
Meanwhile, the first-tier companies like FAW and the second-tier players such as Shaanxi Automobile are struggling to keep up, signaling major changes in the heavy truck industry this year. If CNHTC successfully raises capital through overseas listings, it could reshape the competitive landscape of the top two groups in the sector.
In the first half of the year, sales increased by over 30%. The company focused on road transport dump trucks, achieving unexpected success beyond its traditional strong areas. According to insiders, the overall listing process of CNHTC is in full swing, considered a key initiative for the group this year. "The goal is to go overseas, and Hong Kong is the best choice from an operational standpoint," said a representative. Although no specific timeline has been set, the company is pushing for a swift listing. However, some involved in the process remain skeptical, noting that current asset performance may not meet Hong Kong's listing requirements unless supported by government backing and underwriting from China Gold.
According to Guo Huannan, head of CNHTC’s publicity department, the company reported flat performance in total sales, reaching 45,000 units, with operating revenue exceeding 20 billion RMB and a net profit of 1 billion RMB. The company aims to sell 60,000 vehicles this year, targeting 70,000. In the first half of the year, more than 31,200 units were sold, a 34% increase compared to the same period last year. While the high-end Howo heavy truck was not the main growth driver this year, the company had initially promoted Euro III emission standards, but most cities outside Beijing have yet to implement them.
The market structure of the heavy truck industry is expected to undergo significant changes, with the second-tier players like CNHTC making a strong impact. After a 114.89% year-on-year sales increase in 2004, its market share rose from 12.18% in 2004 to 16.43% in 2005, and reached around 21% in the first half of this year. Shaanxi Zhongqi saw a 73.51% year-on-year sales increase from January to May, with its market share rising to 10.42% this year. Despite not entering the top three, its alliance with Weichai has strengthened its position.
Beiqi Foton, another player in the second tier, saw a sharp decline in sales last year but began to recover in February this year, with its market share reaching approximately 8.8% in the first half of the year.
However, the first-tier companies FAW and Dongfeng appear stagnant, with their combined market share dropping from over 60% in 2004 to below 45% in the first five months of this year. FAW’s market share fell from 34.48% in 2004 to 26.30% in 2005 and further to 22.30% recently. Dongfeng’s share dropped sharply from 30.05% in 2004 to 33.57% in 2005, then to 21.98%. Whether the new product “Tianlong†launched in May will help regain lost ground remains uncertain.
Industry experts believe that with the growing strength of the second-tier players, if CNHTC continues to raise capital overseas, the dominance of FAW and Dongfeng may not be sustainable for many years, potentially leading to a new industry ranking.
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