Chery's Cross - border Acquisition in the Environmental Protection Field: A New Strategy in the Circular Economy

Chery Automobile, which is seeking an IPO in the capital market, has made another significant move. Not long ago, Chery Holding Group, through its wholly - owned first - level subsidiary, Ruiyuan International Resources Investment Co., Ltd. (hereinafter referred to as "Ruiyuan International"), spent 413 million yuan to acquire 100% of the equity of Nanjing Wonders Investment Co., Ltd. held by Liu Jun, the actual controller of Wonders, and shareholder Gong Jianrui. It is reported that Wonders was established in 2007 and is a high - tech enterprise focusing on environmental governance and resource utilization. This acquisition event, where an automotive giant crosses into the environmental protection field, has attracted wide attention both within and outside the industry.

In recent years, Chery Holding has been actively deploying in the new energy vehicle and related industrial chains. Acquiring the equity of Wonders is an important strategic layout in the environmental protection field. So, what kind of "new game" does this cross - border acquisition draw for Chery's strategic layout in the circular economy field?

Spending 413 million yuan to cross into the environmental protection field. Wonders Investment is the controlling shareholder of Wonders, holding 24,584,139 shares, accounting for 28.88% of the company's total share capital. Transferring 100% of the equity of Wonders Investment means that the listed company Wonders will indirectly change its controlling shareholder to Ruiyuan International. In terms of corporate governance, Ruiyuan International will nominate 4 non - independent directors after the equity transfer, and Liu Jun will continue to serve as the chairman of Wonders for 3 years. Both parties have promised not to reduce their shareholdings within 3 years.

As a wholly - owned first - level subsidiary of Chery Holding Group, Ruiyuan International's business widely covers productive service industries such as international trade, circular economy, and the automotive after - market. In recent years, Ruiyuan International has also been deploying in the circular economy business tracks such as industrial solid waste treatment, scrapped vehicle disassembly, power battery recycling and cascade utilization, and waste oil and hazardous waste recycling. Regarding this transaction, Wonders said that in recent years, while consolidating and developing its main businesses such as organic waste treatment and industrial wastewater treatment, Ruiyuan International has taken the resource recycling business as an important development direction and, relying on its existing technology reserves, actively cultivated and expanded business areas such as energy metal extraction and high - value resource utilization of waste. The strategic directions of both parties are highly consistent.

It is reported that Wonders was listed on the Science and Technology Innovation Board in January 2020. However, since the second year of its listing, that is, since 2021, Wonders' net profit attributable to the parent company has declined for 3 consecutive years. In 2023, it turned from profit to loss, with a net profit attributable to the parent company of - 86.6326 million yuan. According to the performance bulletin released by Wonders, in 2024, the company achieved an operating income of about 621 million yuan, a year - on - year decrease of 23.35%; the net profit attributable to the parent company was a loss of 68.2123 million yuan, but it has narrowed compared with the same period of the previous year. Despite this, the outside world is extremely optimistic about Chery's move in the environmental protection field. This not only reflects its strategic goal of expanding from single - vehicle manufacturing to a comprehensive industrial chain but also enables it to extend its business to the field of environmental governance and resource utilization through cross - border acquisitions.

Going with the trend to pave the way for sustainable development. Overall, for Chery, this acquisition has brought multi - dimensional expansion to its strategic layout in the circular economy field and brought many possibilities for future development. For example, it can connect the upstream and downstream of the new energy vehicle industrial chain to form a closed - loop system from production to resource recycling; in terms of battery recycling and reuse, it can achieve efficient treatment and resource utilization of waste batteries, reduce resource waste, and promote sustainable development; it can adopt more environmentally friendly production processes and materials, reduce the environmental burden in the production process, and enhance product competitiveness.

In recent years, the Chinese government has strongly supported the development of the new energy vehicle and environmental protection industries and has introduced a number of policies for layout. Under the "dual - carbon" goal, as an important means to reduce carbon emissions, the circular economy has received further policy guidance, such as supporting industries like waste resource recycling and renewable resource utilization. Not long ago, the executive meeting of the State Council chaired by Li Qiang on February 21 reviewed and approved the "Action Plan for Improving the Recycling and Utilization System of New Energy Vehicle Power Batteries". The meeting pointed out that currently, China's new energy vehicle power batteries have entered the stage of large - scale retirement, and it is particularly important to comprehensively improve the recycling and utilization capacity of power batteries. In this context, many automobile enterprises are taking the circular economy and power battery recycling as an important part of sustainable development. For example, BMW Group announced that it recycled more than 2,000 tons of battery raw materials in 2024, enabling retired batteries to "re - enter the workforce"; GAC Group also said that it has fully connected the energy ecological industrial chain layout including battery recycling and cascade utilization, energy storage systems, and parts remanufacturing.

In the current high - speed development of the new energy vehicle industry, automobile enterprises' layout in the circular economy has become a key part of their future sustainable development. In 2024, Chery sold 583,569 new energy vehicles annually, a year - on - year increase of 232.7%; it exported 1,144,588 vehicles, a year - on - year increase of 21.4%. This further highlights the urgency of Chery's layout in the fields of power battery recycling and parts remanufacturing. Through this cross - border move, Chery has successfully extended its strategic map from new energy vehicle manufacturing to the environmental protection and circular economy fields. It can be predicted that this "new game" centered on the closed - loop industrial chain shapes Chery's unique advantage in sustainable development. In the future, if Chery can effectively integrate resources and face challenges, this strategic layout will bring long - term competitive advantages and market returns and become a highlight in its IPO journey.