After China FAW Group Corporation signed strategic cooperation agreements with 16 banks, the share price of Tianjin FAW Xiali Automobile Co., Ltd. rose again with more than 8% up to this morning. Its stock has surged to the daily limit for two consecutive trading days. IIA learned from FAW Xiali who announced this morning that strategic cooperation agreements signed by China FAW and the banks were "framework" cooperation agreements which currently have no impact on the company. In addition, the announcement also revealed that FAW Xiali intends to transfer 15% of FAW Toyota stakes to China FAW.

October 25, China FAW signed strategic cooperation agreements with 16 banks including the National Development Bank, China Construction Bank and Industrial and Commercial Bank of China. The total intentional credit extension by each bank to China FAW was RMB 1.015 trillion yuan. In the future, China FAW will cooperate with banks in new business areas such as financing, cash management, international financial business, new energy, intelligent connection, and Hongqi brand support.

Affected by the agreement, the shares of FAW Car and FAW Xiali both surged to their daily limit for two consecutive trading days. Announcement issued by FAW Xiali indicates that intentional credit extension does not represent the final loan that the company can obtain from the bank. The actual loan is still subject to a series of internal ratings and approval processes. At present, it does not pose impact on FAW Xiali.

In addition, the announcement stated that in order to deepen the reform of the enterprise, FAW Xiali is planning to transfer 15% of the stakes of Tianjin FAW Toyota to China FAW. If the transaction is completed, Tianjin FAW Toyota and Toyota Motor will hold 50% shareholding respectively. This move will be the connected transaction and major asset restructuring, and further information will be announced later.

In 2017, Tianjin FAW announced the “Junchi Plan”, a new brand development plan, which stated that Tianjin FAW will launch 10 new cars within 3 years. In this March, the Xiali brand was discontinued and a new brand, Junpai, was launched. All these highlights the determination of Tianjin FAW transformation. Wang Zhiping, director of sales and service of Tianjin FAW Xiali Automobile Co., Ltd. and general manager of the sales unit, said with conviction: "We never give up, and we are laying out the whole industry chain with greater determination and brand-new attitude. We are confident to return to the forefront of the times."