At 9:30 AM Beijing time on September 14, GAC Group (601238.SH, 02238.HK), a company listed on both the A-share and H-share markets, urgently halted trading at the market's opening. Since trading of its H-shares had already commenced, they surged by 8.64% before the emergency suspension.

GAC Group promptly responded, stating that it would issue an announcement after the market closed and anticipated resuming trading at 9:30 AM on September 15.

This event marks another significant restructuring within the A-share automotive sector.

However, the evening announcement revealed that the expected suspension period would not exceed 10 trading days. (This announcement was released relatively late, after 9:00 PM. After perusing it, GAC Group's shareholders are likely to feel dissatisfied, as FAW Group is not injecting cash to become a shareholder of GAC Group. Instead, GAC Group is issuing shares to acquire a portion of the equity held by FAW Group in a joint venture company. In today's era, where independent brands are on the rise, the market share of joint venture brands continues to dwindle, and joint ventures have become a liability. Now, GAC Group is shouldering FAW Group's burden. Nevertheless, if GAC Group possesses high-level integration capabilities, it could potentially transform this into a golden opportunity!)

Below is the crux of the announcement, detailing the cooperation between FAW and GAC.

Guangzhou Automobile Group Co., Ltd. (hereinafter referred to as "GAC Group") has signed a Letter of Intent with China FAW Group Co., Ltd. (hereinafter referred to as "FAW Group").

GAC Group intends to acquire a portion of the equity held by FAW Group in a vehicle joint venture company by issuing shares and will raise matching funds. Based on preliminary estimates, upon completion of this transaction, FAW Group will emerge as the second-largest and strategically influential shareholder of GAC Group.

Currently, FAW Group's joint ventures encompass FAW-Volkswagen Automobile Co., Ltd., FAW-Toyota Motor Co., Ltd. (a merger of the original Tianjin FAW Toyota and Sichuan FAW Toyota), and Audi FAW New Energy Vehicle Co., Ltd. (PPE pure electric factory), totaling three major joint ventures.

Similarly, GAC Group's joint ventures include three key players: GAC Honda Automobile Co., Ltd., GAC Toyota Motor Co., Ltd., and GAC Hino Motors Co., Ltd.

From a resource integration standpoint, the most plausible transaction between FAW Group and GAC Group involves FAW Group's stake in FAW-Toyota Motor Co., Ltd., given that GAC Group already has GAC Toyota Motor Co., Ltd. This aligns with the rumored merger of Toyota's northern and southern operations.

In 2025, FAW Toyota sold 805,600 vehicles, while GAC Toyota sold 772,700 vehicles. In the first half of 2026, FAW Toyota's sales plummeted by 27.4% year-on-year to 273,700 vehicles, whereas GAC Toyota's sales declined by a mere 6.3% year-on-year to 341,100 vehicles.

From a sales perspective, FAW Toyota faced a steeper decline and significant pressure, while GAC Toyota exhibited stronger resilience with a smaller drop.

In terms of absolute sales figures, in the first half of 2026, GAC Toyota's sales surpassed FAW Toyota's by 67,400 vehicles. In contrast, for the entire year of 2025, GAC Toyota's sales were 33,000 vehicles shy of FAW Toyota's.

From this vantage point, if FAW Group transfers a portion of its equity in FAW Toyota to GAC Group and becomes the second-largest shareholder of GAC Group through this transaction, it would essentially be exchanging an asset with a more pronounced decline for GAC Group's assets.

If the sole objective is to integrate the resources of Toyota's northern and southern operations, given the decline in fuel vehicle sales, Toyota's overall sales continue to trend downward. In terms of pure electric vehicles, GAC Toyota has outperformed FAW Toyota.

Throughout 2025, GAC Toyota's bZ4X model sold approximately 70,000 vehicles, while FAW Toyota's two bZ models, bZ3 and bZ5, cumulatively sold around 40,000 vehicles, with the bZ4X model barely registering any sales. By 2026, GAC Toyota's bZ4X began to gain traction, with the bZ series selling approximately 51,900 vehicles in the first half of the year, while FAW Toyota's bZ series sold only 11,500 vehicles, underscoring an even more significant gap.

Notably, GAC Toyota's bZ4X model achieved single-month sales of nearly 10,000 vehicles in August 2026, reaching 9,216 vehicles.

Perhaps GAC Group is better positioned to integrate Toyota's northern and southern operations. However, for GAC Group, such an integration may entail bearing the brunt of FAW Toyota's rapid sales decline and the resulting losses in the short term.

It should be noted that GAC Group's current financial situation is far from ideal. In 2025, GAC Group reported its first significant annual net loss since going public, with a full-year net loss attributable to the parent company of 8.784 billion yuan. In the first half of 2026, although revenue increased by 9.13% year-on-year to 46.5 billion yuan, the net loss attributable to the parent company widened to 4.467 billion yuan, a 75.98% increase compared to the 2.538 billion yuan loss in the first half of 2025.

If GAC Group assumes the responsibility of integrating FAW Toyota and GAC Toyota, its losses may further escalate.

This will undoubtedly exert pressure on GAC's stock price, but the market's reaction post-resumption of trading remains to be seen.

It is worth mentioning that recently, A-share automotive restructuring stocks have fared exceptionally well, with Shanzhi Hi-Tech and Zotye Automobile both hitting their daily limits.

Let's see if GAC Group's stock will follow suit and hit its daily limit after trading resumes.

On September 14, Shanzhi Hi-Tech (000981.SZ) garnered attention over the weekend due to the conclusion of the fourth meeting on the restructuring of Neta Automobile, in which an affiliated party, Taiyi Shenglian, participated. The specific restructuring plan requires court approval. Influenced by this news, Shanzhi Hi-Tech opened at its daily limit today.

Another automotive restructuring stock in the market, Zotye Automobile (000980.SZ), achieved three daily limits in the last four trading days of the previous week. Today, it opened 4.25% higher, dipped slightly, and then swiftly rallied to hit its daily limit. Over the past five trading days, it has achieved five consecutive daily limits, with a cumulative increase of 39.52%.