HK Stock Market Move | GAC Group (02238) rose over 5% in the afternoon. FAW Toyota and GAC Toyota are expected to complete a merger, with synergies set to extend to a deeper level.

Guangzhou Automobile Group (02238) rose over 5% in the afternoon. As of press time, it was up 4.78% at HK$2.52, with a turnover of HK$30.1153 million. On the news front, Guangzhou Automobile Group recently announced plans to acquire, through the issuance of shares, part of the equity in a certain vehicle joint venture held by FAW Group Corporation, while simultaneously raising matching funds. The transaction is still in the planning stage. If completed, FAW Group Corporation is expected to become the second-largest shareholder of Guangzhou Automobile Group with strategic influence. The market speculates that the restructuring target is most likely the FAW Toyota equity held by FAW. BOCI pointed out that although the current announcement states "part of the equity in the joint venture held by FAW Group Corporation," we estimate that in the end GAC will obtain most, or even all, of the 50% stake held by FAW. In fact, rumors of a merger between FAW Toyota and GAC Toyota have circulated for a long time. At the end of 2025, the Japanese side of Toyota attempted to promote channel optimization and consolidation in some lower-tier cities, but the model was not widely adopted. This restructuring and merger of the FAW Toyota and GAC Toyota joint ventures will go beyond channel and sales synergies, extending to deeper levels such as centralized procurement, supply chain cost control, and joint research and development and vehicle model development.