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jifeng co., ltd. (603997) announced on the evening of september 22 that its holding subsidiary grammer intends to sell 100% of the equity of toledo molding & die (tmd) to apc at an initial transaction price of us$40 million. jifeng co., ltd. said that since tmd's products have weak synergy with the company's other products, the company intends to focus on its main business and enhance its core competitiveness through this transaction.

in order to promote this transaction, jifeng shares will bear financial losses. it is reported that the sale of tmd will have a significant impact on jifeng shares' performance this year. according to the company's preliminary calculations, it is expected to lose 280 million to 380 million yuan. in comparison, jifeng shares' revenue in the first half of this year was 11.006 billion yuan and its net profit was 53.1445 million yuan.

jifeng shares emphasized that although this transaction has a significant impact on the current income statements of the company and grammer, it also increases grammer's one-time cash inflow, which is conducive to improving grammer's cash flow. after the completion of the transaction, the company's further strategic resource investment in tmd will be reduced. at the same time, it will help improve grammer's profitability and financial status in the americas region, thereby improving the company's overall profitability.

tmd is mainly engaged in injection molding, blow molding molds, and automotive and custom plastic molded parts. in 2018, german automotive supplier grammer completed the acquisition of tmd for us$271 million with the goal of expanding its share in the north american market. in 2019, jifeng holdings acquired 84.23% of grammer's equity for rmb 3.956 billion, and tmd was included in jifeng holdings' consolidated financial statements.

since the acquisition was completed, jifeng is still in the integration stage of grammer, which has not made a good contribution to its performance. jifeng once reflected that due to the inconvenience of domestic and overseas air traffic, the company and its subsidiary grammer could only communicate through video conferences for three years. it was not until march 2023 that full air traffic was opened and personnel from both sides could travel normally that the company's integration of grammer entered an accelerated channel.

in 2023, grammer achieved operating revenue of 17.723 billion yuan, a year-on-year increase of 13.71%; achieved operating ebit of 434 million yuan and ebit of 334 million yuan; achieved net profit of 22 million yuan, turning losses into profits year-on-year, and a loss of 556 million yuan in the same period last year. among them, tmd achieved revenue of 1.847 billion yuan and a loss of 263 million yuan during the reporting period. in the first eight months of this year, tmd once again handed in a report card with a loss of 134 million yuan.

it is understood that jifeng co., ltd. defines 2024 as a key year for the multi-faceted and comprehensive integration of grammer, that is, to enter the stage of achieving benefits from comprehensive integration.

among them, for grammer's business in the americas, jifeng's goal is to optimize and adjust its business structure in an orderly manner, find the source of continuous losses, and solve the problem from the source, so as to lay a solid foundation for the future north american business to not lose money or even make profits. the sale of tmd by jifeng may be the implementation of this strategy.

in addition to this sale, grammer has taken a series of measures in the first half of the year to further improve efficiency and reduce costs: exploring measures to further optimize production capacity layout; exploring measures to further reduce fixed costs, including reductions in various labor and management costs; strengthening supply chain management such as procurement to further reduce procurement costs; streamlining processes, speeding up decision-making and reducing decision-making costs; exploring incentive and assessment systems that link personal interests with company interests, etc.

"in the company's global strategic layout of passenger car seat business, grammer's collaborative efforts have played an irreplaceable role, and grammer's integration has entered the fast lane," jifeng holdings emphasized in its semi-annual report.