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Tuesday, October 19, 2021

One of the largest commercial vehicle wheel manufacturers in China just announced that it has entered into an agreement and plan of merger with Newrace Limited. According to the release, a British Virgin Islands company will be formed as a wholly owned subsidiary of the parent company and will merge with and into the company to complete the process. Shares of China Zenix Augto International Ltd ADR (OTCPK:ZXAIY) were bid up aggressively at the time of writing.

China Zenix Auto International Ltd operates in the wheel industry. It manufactures high-quality steel wheels that are used by most types of commercial vehicles. It offers more than 945 series of tubed steel wheels, tubeless steel wheels, off-road steel wheels, Aluminum wheels, and Wheel components. The company's products are sold in both the aftermarket and OEM(original equipment manufacturer) markets in the People's Republic of China (PRC) and internationally. It has six manufacturing facilities across China. The company operates in three segments: PRC OEM sales, PRC aftermarket sales, and International sales, of which the vast majority of its revenue comes from PRC. Its geographical segments are China, Thailand, Japan, Vietnam, Indonesia, Malaysia, South Korea, and Other Countries.

Traders are certainly bullish on the news as shares are currently bid at $0.75/share (+47.03% implied open for sellers). This is likely due to the reported approximate equity value of the company stated as US $55.755 million, which is over $29.4 million (+111.75%) above the market cap at Monday’s close.

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