Wanfeng's aircraft division to take off with SOE partner

Jan 19, 2021 (China Knowledge) - Zhejiang Wanfeng Auto Wheel’s (002085) controlling shareholder Wanfeng Group and its wholly-owned subsidiary Wanfeng Aviation is said to transfer 35% equity stake in Wanfeng Aircraft Industry to Qingdao Wansheng Chengfeng Equity Investment Limited Partnership, a local State-Owned Enterprise related entity. The 35% stake is priced at RMB 1.84 bln and post transaction, subject to shareholders’ approval of waiving right of first refusal, Zhejiang Wanfeng Auto Wheel remains to hold on to a 55% majority stake in the aircraft business which owns the crown jewel ‘Diamond Aircraft Industries’.

This transaction makes current valuation of Wanfeng Aircraft Industry to have reached RMB 5.266 bln, RMB 870 mln or nearly 20% more than the value prior to injecting into the listed company earlier last year. The strategic investment from Qingdao Wansheng Chengfeng Equity Investment Limited Partnership demonstrates its recognition of Wanfeng Aircraft’s quality assets, highlighting the company's ability to further unlock value in the aircraft manufacturing business. At the same time, the participation of state-owned entity widens the future prospect of Wanfeng Aircraft in China’s general aviation ecosystem.

More importantly, Wanfeng Aircraft Industry plans to make Shandong Province the new pivot to optimize its industry layout for future growth. This strategy seeks to cement the leading positing for its aircraft manufacturing division, unleash synergies across the value chain, and extend into a plethora of related services. All these bode well for Wanfeng to become the next unicorn in the general aviation sector.