TU-TESL

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Huayu auto, Junsheng electronics, the two largest auto parts listed companies in China, and a joint venture jointly owned by them will be split, which can be understood as turning the joint venture into their own business. Recently, the two sides announced that the assets of Yanfeng Blythe (Shanghai) automobile safety system Co., Ltd. (hereinafter referred to as "Yanfeng Blythe") jointly held by the two sides will be acquired and integrated by relevant subsidiaries of the two sides. This transaction will be transferred through listing on the property exchange. Part of the assets of Yanfeng BLD worth 512 million yuan will be traded to junshengfang (Ningbo Junsheng BLD automobile safety system Co., Ltd. and Shanghai Lingang Junsheng automobile safety system Co., Ltd.); the assets worth 428 million yuan will be traded to yanfengfang (Yanfeng automobile intelligent safety system Co., Ltd.) under Huayu automobile Division). The main reason for Huayu automobile and Junsheng electronic to make this decision is that the joint venture agreement of Yanfeng Blythe will expire in December 2023, and the safety system businesses of both Junsheng electronic and Huayu automobile have been adjusted strategically. Junsheng electronic estimates that the assets of the transaction will generate revenue of about 2.5 billion yuan in 2020. The corresponding income of assets purchased by Yanfeng is about 2.3 billion yuan. At present, Junsheng electronics holds 49.9% of the equity of Yanfeng Blythe through its subsidiary KSS (acquired by Junsheng electronics in 2016); Huayu automobile holds 50.1% of the equity of Yanfeng Blythe through its subsidiary Yanfeng auto parts. With a registered capital of US $13 million (about RMB 91 million), Yanfeng Blyde is mainly engaged in the design, development, testing, manufacturing, sales and after-sales service of automobile safety system. Its products mainly include steering wheel, airbag module, safety belt and the whole automobile passive safety system. As of September 30, 2019, the total assets and net assets of Yanfeng Baili were 4.085 billion yuan and 2.149 billion yuan respectively; from January to September, the operating revenue and net profit of Yanfeng Baili were 3.819 billion yuan and 369 million yuan respectively. According to the overall development plan of its "13th five year plan" automobile occupant safety system business, Huayu automobile made this strategic decision on the development of Yanfeng Blythe. Through this transaction, Huayu automobile will complete the construction of the independent development platform for the auto occupant safety system business. Prior to that, Huayu automobile successively participated in Shaanxi Qinghua and Hubei Hangpeng, and completed the supply chain layout of passive safety core parts such as ignition tube, gas producing drug and gas generator. In 2017, Huayu established Yanfeng automobile intelligent safety system Co., Ltd. to make a comprehensive layout of automobile safety system. After the acquisition of KSS, Junsheng electronics established a subsidiary of Junsheng safety, and in April 2018, it acquired high-quality assets of Takata, Japan, to promote the integration of its global assets. Junsheng electronics strives to increase the market share of global automobile safety business to about 40% within 5 years, and become the world's largest supplier of automobile safety products.