Yongda Auto, the largest auto distributor in Shanghai, planned to list in HongKong Stock Market in Feb. 2012, with initial targeted fund raising of USD500-600 million. Those 4S stores under Yongda Auto are distributed in Shanghai, Beijing, Fujian, Shanxi, Zhejiang, Jiangsu and Hainan etc, and act as agent of such brands including BMW, Audi, Porsche, Volvo, GM, Toyota, Volkswagen,etc.

Since 2011, Deauto, Pang Da and such auto distributors have been listed one after another. The main reasons why automobile distributors crave for listing are as below:

1. Great working capital is needed as a result of the quite inventory pressure.
2. Improving negotiation power with the carmakers.
3. It is beneficial for financing from auto finance companies and banks, and cutting financing cost.

At the end of 2011, China has issued relevant policy to nurture large-scale automobile circulation enterprises and to improve industry concentration. Under the background of self expansion and policy encouragement, we expect that China automobile distribution enterprise have strong demands for financing and mergers, and more and more car auto dealers will be listed in 2012.