(Hong Kong, December 28, 2020) The proposed initial public offering (“IPO”) of CIMC Vehicles (Group) Co., Ltd. (“CIMC Vehicles” or the “Group”; stock code: 1839.HK), a leader in the global specialty vehicles industry, has been approved by the GEM Listing Committee of the Shenzhen Stock Exchange, according to a Shenzhen Stock Exchange announcement.

The proceeds from this IPO are intended to be invested in projects related to the Group’s main businesses. The proceeds from the IPO are expected to be used for its digital transformation and R&D projects upgrade and construction of new Light Tower plant projects, new marketing and construction projects, as well as repayment of bank borrowings and replenishment of liquidity .

Haitong Securities Co., Ltd. is the sole sponsor of the Group’s A-shares IPO. The main underwriters are Haitong Securities Co., Ltd., China International Capital Corporation Limited, ZTF Securities Company Limited and Ping An Securities Company Limited.

The management of CIMC Vehicles, said, “The Group has endeavored to promote technological innovations and product compliance in the industry. Capitalizing on this A-shares listing, the Group’s financing channel and global businesses will be strengthened. The Group will accelerate the strategic layout of its global semi-trailer business, expand its economies of scale and promote the development and upgrade of the industry.”

“Meanwhile, the Group will build a sophisticated manufacturing system for global semi-trailers, truck bodies of specialty vehicles and truck bodies of refrigerated vans. To effectively respond to the headwinds in global trade, the Group will continue to shift its strategy from ‘Global Operations and Local knowledge’ to ‘Overseas Operation and Local Manufacturing’ so as to develop sound resilience amidst the new normal in the global economy. The Group’s listing on the A-shares market will effectively enhance the Group’s investment value, so the Group will be truly discovered and recognized under the interactive effects of the inbound and outbound capital markets which will further elevate the Group’s stature in the international market and heighten awareness of the Group in the international arena."

The Group is the world’s No. 1 semi-trailer manufacturer in terms of sales, and the leading manufacturer of truck bodies for specialty vehicles and refrigerated truck bodies in China. For three consecutive years, the Group’s cement mixers ranked first in sales volume terms and it also enjoys the stature of being the pioneer and technology leader in the commissioned variant business of urban dump trucks in China.

The group currently has 12 “Light Tower” Plants in different parts of the world which produce  semi-trailers, six “Light Tower” Plants which produce truck bodies of specialty vehicles, and two “Light Tower” Plants charged with producing truck bodies of refrigerated vans, as well as a “Product Module” for a number of semi-trailer series. It will continue to focus on the comprehensive construction and improvement of “sophisticated manufacturing system” to maintain the Company’s competitive advantages.

During the first three quarters of 2020, CIMC Vehicles recorded revenue of over RMB 18.8 billion, representing a 7.3% increase from the same period in 2019. Its operating cash flow exceeded RMB 1.61 billion, marking a year-on-year growth of 26.2%. Despite COVID-19, the Company managed to maintain its sound financial stature.

Although the pandemic has hit hard the world’s economy, China has contained the disease successfully, and its economy has revived quickly. The dual circulation economy and new infrastructure policies have served as major economic stimuli, bolstering the prosperous e-commerce, logistics and cold-chain transportation sectors. CIMC Vehicles has successfully identified and maximized opportunities, and its semi-trailer business in China has grown significantly during the first three quarters of 2020.

Large investment plans have been launched recently in various provinces, and they have gone a long way to stimulate the Group’s sales of smart environmentally-friendly urban dump trucks and cement mixers. The Group’s revenue from truck bodies for specialty vehicles has also increased notably. The Group has benefited from enhanced efforts to address the issues of “over-limit and overload” by China’s government, particularly the new national standards, GB1589 and GB7258, for second generation semi-trailers which came into force in 2020 and which have boosted demand for the Company’s second generation semi-trailers.

Strong demand for cold chain transport amid COVID-19 has driven development of the cold chain logistics market. This development, together with the Chinese Government’s policies to establish 17 national core cold-chain logistics bases and reduce or exempt expressway transportation charges for agricultural products in 2020, have also accelerated growth of China’s refrigerated vans market. These factors have largely boosted sales of the Group’s truck bodies for refrigerated van trucks, which serve as the Group’s key products for development and growth going forward.

The Group’s overseas semi-trailer business has been affected considerably during the first half of 2020 due to the slowdown in global economic growth, escalating China-US trade conflicts and the emergence of local trade protectionism in Europe and the US. To cope with the impact of the China-US trade disputes, the Group has exported module parts overseas to replace exports of fully-assembled vehicles and it also promoted “Local Manufacturing” in North America and Europe to alleviate the negative impact from trade conflicts.

The US economy has showed healthy recovery during the third quarter of 2020, with GDP rebounding 33.1% quarter-on-quarter and posting the highest quarterly growth on record. US transportation intelligence FTR data have showed that net trailer orders for October have reached an all-time record at 56,500 units and orders for dry van trailers and refrigerated vans have remained relatively strong, while orders for flatbed trailers continued to improve. Looking ahead, the Group expects stable and steady growth in its overseas business.

The Group will continue to address prudently and cautiously different uncertainties in the global market and adopt flexible adjustment measures. It will also benefit from China’s “internal circulation” economic model and cash in on the immense development opportunities that will be generated in the specialty vehicle industry by the implementation of new infrastructure policies.

In addition, the Group will seize the opportunity of issuing A Shares, optimize governance structure, build a long-term incentive mechanism for talent, establish with concerted efforts the cornerstones of “Upgrade of the ‘Product Module’, Improvement of ‘Light Tower’ Plants, Kick-off of ‘Sales and Marketing Transformation’ and Promotion of the Organizational Development”, as well as accelerate efforts to promote the intelligent interconnection and upgrade of products so as to complement the country’s strategy to upgrade towards sophisticated manufacturing and automated and intelligent production models. The Group will strive to consolidate its leading position in the global specialty vehicle sophisticated manufacturing industry and continuously maximize returns for shareholders.