On October 22, as reported by Cailian Press (Journalist: Liu Yang), FAW Jiefang and Changchun Faway jointly announced plans to sell 21.8393% and 6.44% of FAW Finance equity they hold to FAW Group through non-public transfer agreements. Changchun Faway's target asset transaction price is 1.452 billion yuan; FAW Jiefang did not disclose the transaction price in the announcement.

"After this transaction is completed, the listed company will no longer hold FAW Finance equity." On October 22, when Cailian Press journalists inquired Changchun Faway as investors, the company's secretary explained the reasons for transferring the FAW Finance shares held: on one hand, it aims to comply with the financial group's financial company regulatory requirements, 'as the company no longer belongs to FAW Group's member units, it lacks the eligibility of being a FAW Finance shareholder'; on the other hand, including Dongfeng, Changan, and other major automobile conglomerates' financial companies are all undergoing transformation, and may no longer continue to engage in credit business in the future. 'Based on these two points, the company has decided to transfer its FAW Finance equity holdings. It is expected that by the end of this year, the company will withdraw all funds (in FAW Finance).'

On the same evening, FAW Jiefang also announced plans to sell 21.8393% of FAW Finance to its controlling shareholder, FAW Group, through non-public transfer. 'This transaction is still in the planning stage, as of now, other than signing a confidentiality agreement, the transaction parties have not signed any other relevant agreements, and the transaction plan and terms still need further verification and communication,' FAW Jiefang stated.

Public records show that FAW Finance, established with the approval of the People's Bank of China under Document No. Yin Fu [1987] 397, is a financial company providing services to China FAW member units and a national non-banking financial institution. Once Changchun Faway and FAW Jiefang sell their 6.4421% and 21.8393% equity in FAW Finance respectively to FAW Group, FAW Group's holding percentage in FAW Finance will increase to 79.8477%. In addition, FAW Finance's other two major shareholders are FAW Capital Holding Co., Ltd., holding a 19.5918% stake, and the Changchun Faway Group Co., Ltd., which holds a 0.5585% stake.

"The planned asset sales by the two companies this time align with regulatory policies and the focus on the main business development strategy, and are considered necessary by industry insiders."

In October 2023, the Central Financial Work Conference highlighted the need to 'segregate financial risks. In the same year, in November, a meeting was held by the State-owned Assets Supervision and Administration Commission of the State Council emphasizing that state-owned enterprises must fulfill their responsibility to develop the real economy, adhere to problem orientation, intensify supervision, adhere to the principles of returning to the source and focusing on the main business, make efforts to control increment effectively, optimize existing assets practically, base financial services on the development of the enterprise's industrial characteristics, meet the needs of the main business, and improve the ability and level of providing services to the main business.

From a policy perspective, on one hand, the country is encouraging listed companies to improve their quality through mergers and acquisitions. In February of this year, the China Securities Regulatory Commission proposed the effective use of mergers and acquisitions tools by listed companies, seize opportunities to inject high-quality assets and eliminate low-efficiency capacity, implement mergers and integrations, enhance investment value through high-quality development. On the other hand, the regulatory requirements for conglomerate financial companies have further clarified the functional positioning and shareholder qualification requirements. In April, the China Banking and Insurance Regulatory Commission issued the 'Guiding Opinions on Promoting the Normative and Healthy Development of Enterprise Group Financial Companies and Enhancing Regulatory Quality and Efficiency,' requiring these companies to adhere to the functional positioning of 'group reliance and service to the group' and maintain their internal financial service attributes.

It is worth noting that, both Changchun Faway Automobile Components and FAW Jiefang Group have stated that after this transaction is completed, they will "focus on their main business". Changchun Faway Automobile Components stated that this equity sale will allow them to exit equity investments unrelated to their main business and receive cash consideration, which will help the company further optimize its capital structure, supplement working capital, improve the quality of operation and operational efficiency, enabling the company to better focus on the development of the automotive parts industry.

FAW Jiefang Group, which has just completed a 2 billion private placement, stated to reporters that after this equity sale, they will optimize the company's capital structure, and some other arrangements will be made for the cash received after the completion of the transaction.

"From the perspective of Changchun Faway Automobile Components and FAW Jiefang Group's sale of all equity of FAW Finance this time, Fusheng Group may exit the list of FAW Finance shareholders, and FAW's shareholding percentage may further increase." Analysts in the industry mentioned earlier.