
Many people may not have thought that Chery, whose sales volume is second only to BYD, is still not on the market.
On February 28, Chery Automobile officially submitted its IPO application to the Hong Kong Stock Exchange, unveiling the financial veil of the major Chinese automaker. According to the prospectus, Chery Automobile’s revenue from January to September 2022, 2023 and 2024 will be 92.618 billion yuan, 163.205 billion yuan and 182.154 billion yuan respectively, showing a strong growth momentum.
Founded in 1997, Chery Automobile, headquartered in Wuhu, Anhui Province, owns five brands: Chery, Jietu, Xingtu, iCAR and Zhijie.
Chery Automobile’s road to listing can be described as twists and turns. In the 20 years since 2004, Chery has repeatedly tried to go public through different channels, including considering a backdoor listing of Anhui Chaodong shares, cross-shareholding with JAC, and attempting to list on Hong Kong stocks and A-shares, but for various reasons, it has not been realized.
Chery Automobile was born in Wuhu, Anhui Province in 1997 and is currently the only “unique seedling” among China’s large car companies that has not been listed. In contrast, other leading automakers with their own brands have already landed in the capital market, with Changan going public in 1997, while BYD, Great Wall and Geely went public in 2002, 2003 and 2005 respectively.
This IPO application is the first time that Chery Automobile’s financial status in recent years has been made public. Why is Chery’s road to listing so bumpy?
Profits exceed SAIC + Changan
Entering 2025, the popularization and equal rights of intelligent driving technology have become the focus of competition in the automotive industry. For Chery Automobile, in addition to these, there is another important mission – to impact the IPO listing.
At Chery’s 2025 Annual Cadre Conference held in February this year, Yin Tongyue once again made it clear that in 2025, Chery will complete the four major tasks of enterprise listing, annual business objectives, key capability improvement and major key technology breakthroughs, and implement four major changes in branding, comprehensive internationalization, management and culture.
Chery Automobile’s confidence in this IPO is mainly due to its outstanding performance. According to the prospectus, Chery Automobile’s revenue has achieved significant growth from 2022 to 2023, jumping from 92.618 billion yuan to 163.205 billion yuan, with a growth rate of 76.2%. What’s even more eye-catching is that in the first nine months of 2024, Chery Automobile’s revenue has reached 182.154 billion yuan, exceeding the annual revenue in 2023.
In terms of profits, Chery Automobile also performed well. In 2022, Chery’s profit was 5.806 billion yuan, and by 2023, this figure grew to 10.444 billion yuan, with an annual profit growth rate of nearly 80%. In the first nine months of 2024, Chery’s profit has reached 11.312 billion yuan, exceeding the level of the whole year of 2023.
This also makes Chery Automobile in the forefront of domestic listed car companies, surpassing SAIC and Changan combined. In the first three quarters of 2024, the net profit attributable to the parent company of major domestic automakers was 120 million yuan for GAC Group, 6.907 billion yuan for SAIC Group, 10.428 billion yuan for Great Wall Motor, 3.58 billion yuan for Changan Automobile, 25.238 billion yuan for BYD, and 4.038 billion yuan for Cialis.
Chery Automobile’s profit level has continued to rise, mainly due to its high sales volume and high gross profit margin. In 2024, Chery Automobile’s annual sales will reach 2,603,900 units, a year-on-year increase of 38.4%, a record high.
Chery Automobile’s overall gross profit margin was 13.8%, 16.0% and 14.8% in 2022, 2023 and the first three quarters of 2024, respectively, of which the gross profit margin for passenger cars was 13.0%, 15.9% and 14.7%, respectively. The increase in gross profit margin was partly attributable to the significant increase in the average price of Chery and Jietu brand bicycles. From 2022 to the first three quarters of 2024, the average sales unit price growth rate of Chery and Jietu brands was 32.8% and 36.4%, respectively, which became an important driving force for the growth of gross profit per vehicle.
At the same time, Chery Automobile’s high pricing strategy in overseas markets and the high proportion of overseas revenue further supported the growth of its gross profit margin. From 2022 to the first three quarters of 2024, the average selling price of bicycles in overseas markets increased by 20.6%. From January to September 2023 and 2024, Chery Automobile’s revenue from overseas markets was RMB33.065 billion, RMB79.48 billion and RMB80.148 billion, respectively, accounting for 35.7%, 48.7% and 44% of the company’s total revenue in the same period, demonstrating the strong contribution of overseas markets to Chery Automobile’s performance.
Unlike BYD, Chery Automobile adopts a product route of “fuel vehicles + new energy vehicles”. At the same time, it is also one of the few car companies in China whose sales of fuel vehicles are still growing. From 2022 to the first three quarters of 2024, Chery’s revenue from fuel vehicles was 70.26 billion yuan, 143.3 billion yuan and 136.2 billion yuan respectively, accounting for 76%, 87.8% and 74.8% of the company’s operating income, accounting for more than 70%.
In terms of new energy, Chery “gets up early in the morning and catches up late”. However, 2023 will be a turning point for Chery in the field of new energy. Although the sales volume of new energy vehicles in that year was only 79,000 units, accounting for 4.9%, the sales volume of new energy vehicles in 2024 will reach 583,000 units, a year-on-year increase of 232.7%. Among them, the Zhijie R7, jointly built with Huawei, became the sales champion of pure electric SUVs with more than 250,000 yuan in two months after its launch.
20 years of bumpy road to market
Looking back on the IPO road in the past 20 years, Chery has tried various listing methods such as backdoor restructuring, but no results have been achieved.
Chery Automobile first sought to go public in 2004, initially considering going public through a backdoor stake in Anhui Chaodong or cross-shareholding with JAC. However, as Chery’s equity relationship with SAIC was not yet clarified, the initial listing attempt ultimately failed.
Subsequently, in 2007, Yin Tongyue, chairman of Chery Holdings, publicly stated that he would launch a listing and financing plan as soon as possible. In 2008, Chery accelerated its preparations for listing, including divesting non-core assets, packaging high-quality assets, completing shareholding reform, etc., and established Chery Automobile Co., Ltd. Subsequently, Chery submitted listing materials to the China Securities Regulatory Commission.
However, when the global financial crisis erupted in 2008, the domestic stock market suffered a “stock market crash”, and the China Securities Regulatory Commission suspended the IPO review. In addition, Chery’s operating profit loss in 2008 was 194 million yuan, and although it achieved a profit after receiving 470 million yuan in government subsidies, this financial performance was still not enough to support its listing plan. Therefore, even after the resumption of the IPO, Chery’s road to listing can only be put on hold.
In 2009, with the gradual recovery of the stock market, more than 1,000 stocks doubled their gains during the year, and individual stocks in the auto sector achieved a 3-4 times increase. Against this backdrop, Chery once again launched its IPO plan. However, in the process of preparing the listing application materials, it was found that the number of ultimate holders of the investor, Shanghai Hushan Investment, was large, resulting in the number of shareholders of the company far exceeding the 200 limit stipulated by the CSRC. Due to the difficulty of solving this problem for a while, Chery’s listing plan was suspended again.
This also made Chery miss the opportunity to go public. From 2003 to 2011, Chery Automobile ranked first in sales of its own brands for 10 consecutive years, becoming the “first brother” of its own brands.
However, Chery Automobile’s performance began to decline and support, resulting in the gradual exhaustion of investors’ patience with Chery Automobile. Chery’s IPO plan gradually fell silent, and the road to IPO came to a standstill. From 2009 to 2012, Chery Automobile’s operating profit continued to lose -556 million yuan, -874 million yuan, -415 million yuan and -340 million yuan, respectively, with a cumulative loss of more than 2 billion yuan.
In 2016, Chery Automobile once again tried to go public through a “backdoor” approach, targeting conch profiles, which are also Anhui enterprises. Chery New Energy plans to complete the listing through the shell resources of conch profiles. However, just two months later, Conch Profile announced that it was ending planning for the acquisition. The reason for the termination is that Chery New Energy has not yet obtained a separate new energy vehicle production qualification, and the acquisition of this qualification has a significant impact on Chery New Energy’s assets, business integrity and independence. Due to the inability to meet the relevant conditions, Chery’s backdoor listing plan was once again put on hold.
Chery Automobile’s IPO road was full of ups and downs and challenges. Although it has never stopped its efforts to go public, its listing plan has been repeatedly frustrated due to factors such as declining performance, divestment of investors and policy restrictions. Despite this, Chery Automobile continues to optimize its business, improve its financial performance, and actively seek new listing opportunities.
Equity and debt are the roadblocks
Chery Automobile’s IPO road was full of twists and turns, with a complex shareholding structure and debt issues becoming its main obstacles.
Chery was originally established under the name of “Anhui Auto Parts Industry Company”, but due to the lack of production qualifications, it could only build cars “secretly” in the early days. At this stage, Chery’s production and sales activities were greatly restricted.
At the end of 2000, under the coordination of the relevant ministries and commissions of the state and the governments of Shanghai and Anhui, SAIC Motor accepted a 20% stake in Chery, and Chery officially obtained the qualification of the national product catalogue and became a legal vehicle manufacturer. This turning point laid the foundation for its rapid development. In 2000, Chery produced only 2,000 units, but by December 2001, its 30,000th vehicle rolled off the assembly line, and sales increased 14-fold in one year.
With the rise of Chery, SAIC was no longer satisfied with holding only 20% of the shares, and tried to incorporate it into the overall strategy through a controlling stake, but the negotiations between the two sides failed. In June 2003, SAIC Motor divested 20% of its shares and ended the partnership.
After the withdrawal of SAIC Motor, Chery Automobile’s shareholding structure gradually became more complicated, and multiple shareholders such as Wuhu State-owned Assets, Anhui Credit Financing Guarantee Group, Luxshare Precision, and CATL were introduced.
In order to promote the listing, Chery has tried to clarify its shareholding structure and focus on its core business through asset divestitures, shareholding reforms, and business downsizing. In 2008, Chery completed the divestiture of non-core assets and the shareholding system transformation, and formally established Chery Automobile Co., Ltd. In 2013, Chery spun off its micro-car and part of its vehicle business to its parent company, Chery Holdings, focusing on the passenger car sector. In 2014, the parts business was also divested as a whole. In 2022, after introducing Luxshare Precision as a strategic investor, Chery announced that the “mixed reform was completely completed”.
Before impacting the Hong Kong IPO, Chery also completed the “shareholder sinking” operation, simplifying the equity hierarchy and clarifying the equity distribution, but also making it an enterprise without actual controllers. Before the adjustment, Wuhu Investment Holdings, Ruichuang and Luxshare held 29.47%, 27.20% and 21.16% of the shares of Chery Holdings, respectively; After the adjustment, the three became direct shareholders of Chery Automobile, holding 21.17%, 11.51% and 16.83% of the shares, respectively. Chery’s equity restructuring and mixed reform are key measures to pave the way for its listing.
At the same time, debt problems are also a major obstacle to Chery’s listing. Under the double pressure of debt and losses, Chery tried to introduce strategic investors through mixed reform, gradually alleviating debt pressure and optimizing the capital structure.
In 2018, Chery Automobile initiated a mixed-ownership reform and sold part of the shares of Chery Holding and Chery Shares. In 2019, Qingdao Wudaokou invested 19.6 billion yuan to acquire 51% of Chery Holdings’ shares and 35.58% of Chery Shares, respectively, becoming the largest shareholders of the two companies.
This transaction brought financial support to Chery, but Qingdao Wudaokou was unable to bear the delisting funds for Chery’s project. Subsequently, in 2022, Luxshare Precision invested 10 billion yuan to replace Qingdao Wudaokou and became the new strategic investor of Chery Automobile. At the same time, Gotion Hi-Tech also invested in Chery.
With the entry of strategic investors, Chery Automobile’s debt pressure has gradually eased: in terms of net current liabilities, Chery will be 17.388 billion yuan at the end of 2023 and 4.41 billion yuan at the end of the third quarter of 2024, showing a significant reduction in debt pressure; In terms of cash and cash equivalents, it increased to RMB12.686 billion at the end of 2022, to RMB35.048 billion at the end of 2023, and to RMB41.938 billion at the end of the third quarter of 2024, indicating that Chery’s capital reserves are more abundant.
Standing at an important juncture where China’s new energy vehicle sales exceeded 10 million, Chery’s capitalization process has gone beyond the individual significance of the enterprise. Its listing on the Hong Kong stock market is not only a 20-year run, but also a microcosm of China’s auto industry. There is no end to the innovator’s race. In the future, if it can break through the shortcomings of intelligence, increase the proportion of new energy, and effectively manage geopolitical risks, Chery is expected to enter the camp of international first-tier car companies.