The First Step Is To Win The Shenzhou Rental Car: SAIC'S Big Travel Area Is Now On The Map.

The dust settled. Lu Zhengyao, who is in trouble, has found a new supplier for Shenzhou car rental, SAIC.

On the night of July 2nd, 00699.HK announced that SAIC's wholly owned subsidiary, Saic Motor Hk Investment Limited (hereinafter referred to as "SAIC Hongkong") signed a takeover offer with Shenzhou excellent car Limited by Share Ltd and its subsidiary UCAR Limited, UCAR Service Limited, UCAR Technology Inc. and Amber Gem Inc..

SAIC Hongkong intends to purchase Shenzhou superior car with cash contribution at HK $3.10 per share, and Amber Gem holds no more than 612 million 600 thousand shares of Shenzhou car rental, accounting for 28.92%, with a total cost of HK $1 billion 898 million.

Although the price of HK $3.10 per share is nearly 30% of the share price of Shenzhou rentals released at the time of the announcement, it is a good deal for SAIC. Thanks to the thunder and lightning incident, Shenzhou car rental company suffered heavy losses and the stock price was cut down. Shenzhou excellent car was eager to sell Shenzhou car rental equity to ease financial pressure.

However, the industry is quite surprised that SAIC has suddenly taken over Shenzhou renting.

A month ago in June 1st, Shenzhou car rental announced that it had signed a strategic cooperation agreement with Beiqi group in May 31st, and that Beiqi group will acquire more than 21.26% of the rental car in Shenzhou.

Although the strategic cooperation agreement signed by Shenzhou excellent car and Beiqi group is not legally binding, but in view of the close ties between Beiqi group and Shenzhou group, it was very optimistic that the two sides reached a deal at that time. On the one hand, Xu Heyi and Lu Zhengyao of Beiqi group are alumni of the University. On the other hand, Beiqi is also actively distributing its travel business, which is reasonable for the acquisition of Shenzhou renting.

After taking the car in Shenzhou, SAIC's travel layout will also press the "accelerator key".

SAIC takes the lead

According to the tender offer, SAIC Hongkong intends to purchase shares of not more than 443 million shares, at a price of HK $3.10 per share, with a total cost of HK $1 billion 372 million. In addition, SAIC Hongkong intends to acquire Amber Gem at HK $3.10 per share for not less than 169617948 (170 million) of the shares of the company, with a total cost of HK $525 million 800 thousand.

If the takeover plan is completed, SAIC Hongkong is expected to hold 28.92% of the total issued shares of Shenzhou rentals, becoming the largest shareholder of Shenzhou rentals.

In fact, thanks to the financial fraud of Rui Xing coffee and so on, the price of Shenzhou car rental has been cut down and its performance has been under pressure. Lu Zhengyao has been looking for cars for many times.

In April 16th this year, Shenzhou car rental announced that the company's shareholders Amber Gem will be in the hands of Shenzhou excellent car in two batches to acquire Shenzhou renting 4.65% and 12.46% of the shares. If two transactions can be completed, Amber Gem will account for more than 27% of the shares in China, becoming the largest shareholder. However, the first transaction was completed, and the Amber Gem shareholding ratio increased from 10.11% to 14.76%. In June 1st, Shenzhou renting also announced that Beiqi group would buy 21.26% of Shenzhou car rental. Meanwhile, Amber Gem would no longer carry out the second batch of share purchase under the trading agreement and terminate the sale and purchase agreement.

But in the end, SAIC stepped up to become a new car dealer in Shenzhou.

For SAIC's "interception", people familiar with Shenzhou told reporters that it was mainly because SAIC moved faster and talked fast with Shenzhou car rental, and China's demand for funds was very urgent.

Compared with previous cooperation agreements with Beiqi group, SAIC has bought more than 7.66% of Shenzhou car rental (Amber Gem) than BAIC group, and at the same time reached a cooperation premium of HK $3.10.

Although it was affected by Rui luck explosion, stock prices plummeted, but Shenzhou renting was still very popular. Especially for the car companies who are planning their own business, the market share, user base, offline stores and service outlets of Shenzhou renting are all very attractive. This is also an important reason why Beiqi group and SAIC have thrown their olive branches to Shenzhou.

SAIC said that the acquisition of Shenzhou rentals is designed to help SAIC accelerate the development of its travel business, and it can also enhance asset efficiency based on market principles, explore service innovation models and achieve synergy. This is a positive move by SAIC to speed up the transformation of the new four modernizations and create a new travel complex.

Shenzhou car rental has a total fleet of 148894 vehicles, with more than 1000 outlets all over the country. It is the leading car rental market in China. However, the operation of Shenzhou rentals is not optimistic.

In the first quarter of this year, by the new crown pneumonia epidemic situation, the performance of Shenzhou car rental declined significantly: revenue 1 billion 325 million yuan, a year-on-year decrease of 28.3%; net profit -1.88 billion yuan, a year-on-year decrease of 148.11%, from profit to loss.

Of course, the epidemic is not the only reason for the decline in the performance of Shenzhou renting. In fact, in recent years, the financial data of Shenzhou rentals has been going downhill. In 2016, Shenzhou renting realized a net profit of 1 billion 459 million yuan to its mother, and then decreased year by year. In 2017, the net profit was 881 million yuan, down 39% compared with the same period last year. In 2018, the net profit was 290 million yuan, down 67% compared with that of the previous year, and the net profit in 2019 was 31 million yuan, down 89% compared to the same period in 2018.

After SAIC's connection, Shenzhou renting has more reliable capital support to reverse the decline of its performance. But more importantly, can SAIC take higher commercial value and profit for its own business layout?

However, it is worth noting that the equity purchase scheme has not yet formally signed the agreement, or there will be variables in the middle. "There are partial pledge of shares in the proposed acquisition, and the completion of the acquisition is limited by a number of preconditions." SAIC said in a notice.

Car companies travel ambitions

SAIC said that the completion of the acquisition would help SAIC to accelerate its travel business. At the same time, based on the principle of marketization, Shenzhou renting and SAIC can cooperate in the aspect of asset efficiency enhancement and service innovation mode exploration.

In recent years, car companies have announced the transformation from traditional car manufacturers to mobile travel service providers to speed up the layout of their travel businesses, such as the Cao Cao trip under Geely and the T3 trip launched by FAW, Dongfeng and Changan. SAIC is also one of the car companies that are actively distributing their cars. As early as 2016, SAIC launched EVCARD (global car sharing), the main part of the time sharing leasing business. By the end of 2018, SAIC has launched a road trip to the Internet. In mid 2019, Xiang Road also launched a sub brand rental car rental business.

If SAIC receives the disc, China's SAIC's "big trip" layout has also been basically shaped, including net car rental, car rental, time sharing leasing and so on.

The biggest advantage of car enterprise layout business is vehicle resources. This is also the logic of Shenzhou excellent car before purchasing Bao Wo, from building a car to car rental to create a closed loop. However, if SAIC buys Shenzhou rentals, Shenzhou renting may not continue to use the new car of Bao Wo as it is now, and the fate of Bao wo will be unpredictable.

SAIC has its full range of cars from entry level to luxury cars. To a certain extent, it can satisfy different users' travel needs based on different scenarios.

However, compared with Internet companies, there are still some gaps in the operation of car companies. Especially in the field of Internet related car, the leading position of the long-term drop is hard to shake. There is a clear difference between the number of teams and the sense of user experience.

Everbright Securities in a research report pointed out that Shenzhou car rental stocks will enhance SAIC C terminal car rental strength, to achieve full coverage of mobile travel field.

For SAIC, it is an important step in the process of transformation to the travel service providers. Of course, from the present point of view, the layout of car companies is still in the market accumulation stage, and it is difficult to judge whether the transformation can succeed.

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