After listing on the Hong Kong Stock Exchange on March 31, 2022, on June 27, 2023 (Beijing time), the Italian Faraday Group was officially listed on the Euronext in Milan, only 450 days apart.

Hong Kong and Milan, the two major international financial centers, are dual listed, while Europe and Asia are both competing globally. The Italian Faraday Group is taking a rapid step forward, which once again puts the helm, Tan Xuguang, in the spotlight.

As the saying goes, those who are good at playing chess plan for potential, and those who are good at planning will go far. After ten years of operating Faraday, Tan Xuguang's gaze goes beyond this. What he values more is how to break through the low end lock-in of the global value chain in the highly competitive global manufacturing system, fill industry gaps, and build a new ecological industry chain, paving the way for a comprehensive entry into the global high-end power market.

Three Global First Time Double Listing Models

There is a bright label on the Faraday Group, which is Rolls Royce in the yacht industry, recognized as the leader of the global super yacht industry.

On March 31, 2022, Faraday Group was listed on the Hong Kong Stock Exchange, becoming the only Italian company in the past decade to list on the Hong Kong Stock Exchange, creating the top luxury goods first stock in the Hong Kong capital market. Based on the continuous improvement of enterprise operation, in order to meet the demand of global investors for liquidity, Faraday Group decided to list on the Euronext in Milan and achieved success, creating three new breakthroughs for the first time in the world, and again innovating a new path of global capital integration.

Becoming the world's first company to achieve dual listing in Italy and Hong Kong. After completing its listing in Hong Kong, Faraday officially launched its Milan listing in October 2022. As the controlling shareholder of Faraday Group, Weichai Group's wholly-owned Faraday International Holdings (FIH) reduced its shareholding by no more than 28.75% to support the circulation volume in Milan Euronext after the dual listing. Faraday successfully achieved a dual listing, setting a new example of global capital connectivity.

Created the first dual listing case to address the issue of electronic listing of Hong Kong stock. The Hong Kong stock market allows the existence of paper stocks, but Italian law requires that stocks listed and traded in Italy must be Paperless office. This Italian listing was successfully recognized by Italian and Hong Kong regulators, creating the first case of Paperless office Hong Kong stock.

Becoming the first Hong Kong stock company to go dual listed in Europe in five years. In recent years, there have been very few Chinese listed companies that have dual listings. The dual listing of Hong Kong and Italy is beneficial for companies to optimize their investor structure, diversify the potential risks of listing on a single exchange, and strive for more opportunities and flexibility for future capital operations.

Through dual listing, Faraday Group is able to further expand its capital market liquidity, expand its investor base in the main markets where the company's revenue comes from, and attract more potential investors worldwide. This Milan listing gained the favor of investors and was ultimately priced at 3 euros per share, raising approximately 292 million euros. This time, Weichai Group has recovered 300 million euros, all investments have been fully recovered, and they firmly hold control of Faraday, creating higher value for Weichai Group.

There are both you and him on the complete ecological industry chain

Opening the coordinate axis of time, it is clear that Tan Xuguang's strategic layout is closely centered around the complete ecological industry chain. In 2008, when the global financial crisis hit the economies of Europe and America heavily, Tan Xuguang, out of consideration for structural adjustment, took over the century old ship engine design and manufacturing company, French Borduan Company, for 2.99 million euros. This is a global offshore power supplier with over 130 years of history, mainly producing high-end, large bore diesel engines of 16 liters and above. At that time, Weichai Power marine diesel engines were concentrated in the low-end and low-power engine field, but there was still a blank in the field of large cylinder bore engines. Both sides were highly complementary.

At the 2010 shareholders' meeting, Tan Xuguang took the opportunity to propose the acquisition of Faraday Group. Although the shareholders reacted very coldly, Tan Xuguang saw from more than 20 years of frontline management practice that such opportunities were not many. Firstly, the popularity and comprehensive sales channels of Faraday yachts can be utilized to pave the way for Weichai to enter the consumer market; Secondly, the engine of the yacht is a large bore engine, which is highly compatible with Weichai's business and can complete Weichai's layout in high-end engines Finally, in 2012, Weichai Group successfully acquired Faraday Group, ultimately promoting its dual listing in two major international financial centers, Hong Kong and Milan.

During the ten years of operating the Faraday Group, Tan Xuguang deeply understood the demand for high-end offshore power products. As a representative of the comprehensive level of a country's manufacturing industry, large bore high-speed engines have always been the focus of attention of all countries. A research report shows that the global market capacity of large cylinder bore engines can reach 160 billion yuan per year, with extremely high added value. For a long time, the global market share has been monopolized by foreign investment, which has always been China's weakness. Compared to traditional engines with low technological content, low added value, and low market threshold, large bore engines are a sharp tool to break through the "low-end lock" of the global value chain and a key factor in reconstructing the global industrial value chain.

Digest and absorb, comprehensively enter the global high-end power market

On February 25, 2023, Tan Xuguang presided over a special scheduling meeting for the French Bodouan engine business in Weifang, which revealed that since Weichai acquired Bodouan 13 years ago, the company's operating revenue has increased by 13 times and its profitability has significantly improved.

After Weichai acquired Bordeaux in France in 2009, it took 10 years to complete the development of a full range of large bore high-speed engines in all fields, creating a "introduction absorption localization re output" model, and investing more than 4 billion yuan in the industrialization project of large bore high-end engines. Nowadays, the Weichai large bore engine has solved the problem of China's long-term dependence on imports for large bore power, achieving a comprehensive replacement of imports from relying solely on imports in the past. Weichai high-speed large bore engines have been used in all parts of China's Yangtze River, north and south.

At the same time, Weichai is fully prepared to participate in global competition. In 2022, the sales of large cylinder bore engines increased by 70% year-on-year to over 8800 units, with revenue increasing by about 109% year-on-year, with overseas market revenue accounting for nearly 70%. Large bore engines are sold to over 110 countries and regions worldwide, successfully entering the most stringent emission regulations in the high-end markets of Europe and America, becoming an important business card for China's equipment manufacturing industry worldwide.

Whether Faraday Group is listed in Hong Kong+Milan, or Weichai large bore engines are marketed globally, every step they have taken is deeply consistent with Tan Xuguang's words: the traditional manufacturing industry must achieve three transformations, from low added value to high added value, from homogeneous production to high quality and strength, and from product following to technology leading. What Tan Xuguang is pursuing is to help China's equipment manufacturing industry move towards global high-end.Editor/XingWentao