If accepting the repurchase condition of $16/ADS, Li Bin will receive a gain of $124 million.
Although it was the first day of the Mid-Autumn Festival, Tencent’s news of Hammer Capital’s privatization of the car network was still screened.
Beijing time on September 13, before the US stock market, Yiche.com (stock code BITA) announced that it had received preliminary and non-binding offers from Tencent Holdings and Hammer Capital. Acquired the shares of the Easy Car Network that it has not held at a price of US$16 per ADS or per ADS.
The purchase price is 30.6% higher than the transaction price of the car in the past 30 days. was boosted by the news. The price of the car has increased by 8.73% to 14.95 USD and the market value reached 1.049 billion USD. .
Easy car network receives screenshots of privatization announcements
Zhang Xuan, CEO of Easy Car, said in an internal mail that if the privatization transaction can be completed, the car will be delisted from the US stock market.
Easy Group’s auto trading platform Yixin Group also announced in Hong Kong stocks that if the legal control of the car changes, the buyer group composed of Tencent and Hammer Capital will simultaneously obtain control of Yixin. As of press time, the market value of Yixin reached 10.094 billion Hong Kong dollars.
Easy car network and car home are the two major automotive information platforms in China. On June 25, 2016, Ping An Trust entered the car home, and the car home executives became big.Change blood. After a lapse of two years, Easy Car Network also received privatization offers from Tencent and Hammer Capital.
Capitalism is once again killed in front of the door, but the situation and interests are very different. Easy Car Network said in the announcement that the founders Li Bin, Jingdong and Cox Automotive Global and other shareholders held 48.5% of the shares of the car, have agreed to vote for support The privatization transaction.
The dilemma of easy car
Comparing the 2018 financial report of the car network and the car home, advertising revenue is an important source of the two platforms, reaching nearly 40% of revenue. Another important income of the car is the transaction service fee, which accounts for 50.8% of the revenue, but the transaction service income comes from the holding subsidiary Yixin Group.
The large number of customer service support personnel and inventory required for trading services directly increased the number and cost of employees of EasyCar. As a result, although it had revenue of 10.58 billion yuan in 2018, it lost 608 million yuan. The car home is gradually reducing its direct trading business, achieving a revenue of 7.23 billion yuan in 2018, and a net profit of 2.87 billion yuan.
Automobile vertical media platforms are leaping in the pattern, but the traditional content advertising business is supporting revenue and profit. In this area, the gap between the car and the car home is gradually widening.
The business foundation of Car Home is to rely on content to get traffic. From the high marketing cost of Easy Car Network (6,361.71 billion yuan in 2018), it is not difficult to see that its traffic is bought from a third party, and the profit margin is naturally difficult for opponents. At the same time, the overall market downturn, the budget is tight, even the easy car network COO Liu Xiaoke said in an interview, “the car market budget has been reduced, the launch is concentrated on the head platform.”
Market trends are presented directly in the earnings report. In the second quarter of 2019, the operating income of the car home was 2.309 billion yuan, a year-on-year increase of 23.55%; the net profit was 802 million yuan, an increase of 15.94%. Easy car network revenue was 2.792 billion yuan, the same increase was only 8.86%; net profit decreased by 5510.23% year-on-year, a loss of -145 million yuan.
An employee of the Yijia network told the staff, “From the overall data of the website, the gap with the car home is getting farther and farther away. The sales are often compared with the understanding of the car and the car home. After the data, I can’t find any highlights.client.
The employee also revealed that in order to save money, the car also canceled all the benefits. “The new century office building is retiring. Now it takes half an hour to go to the toilet to solve the problem. The company has also tested the water for 996 and 10 hours. System.”
The operational dilemma is clearly one of the motivations for the Yijia network to delist. For the giants, in the layout of the automotive industry and the financial sector, the closed loop of users, transaction scenarios and data owned by the car-fighting business is the key.
Tencent’s Bureau
After learning that the car has received the privatization offer, CEO Zhang Xuan issued a full-mail mail, saying that “we started to introduce Tencent as our shareholder 4 years ago… Ten years later, Tencent once again proposed a large-scale increase in the shares of Easy Car. Tencent’s move was fully supported by the major shareholders of Binge and Auto Trader.”
The screenshot of the internal letter of the easy car network
Yizhou.com was founded in 2000 by Li Bin. It was listed on the New York Stock Exchange in 2010. On September 30, 2014, the price of Easy Car reached 98.28 USD.
In early 2015, Yiche.com first cooperated with Tencent in capital cooperation. Tencent subscribed for the newly issued common stock of Yiche.com, with an amount of about US$150 million. Jingdong also invested about US$1.15 billion in the form of subscription for new ordinary shares,
After that, the car has launched intensive capital exchanges with giants such as Tencent and JD. In June 2016, Easy Car Network received 50 million US dollars of investment from Tencent, Baidu and JD. In August of the same year, Tencent, Baidu and JD.com signed a final investment agreement with Yiche.com, investing a total of 550 million US dollars in Yixin Capital, a subsidiary of Yiche.com. Before and after this, Li Bin’s car-making project, Wei Lai, has also received capital support from Jingdong and Tencent.
Yizhou.com and Yixin Group CEO Zhang Xuan once interviewed the “Financial World Weekly”, which traced the opportunity for the first cooperation with giants such as Tencent, Jingdong and Baidu.
“I convinced Martin (Liu Chiping) with the concept of Yixin to be a financial platform. He is a financial industry. Tencent has a large amount of behavioral data and transaction data. At that time, he was already organizing a micro-bank, and the data was realized. Nothing to worry aboutIn a few ways, finance is definitely the most appropriate way, and it is also the easiest to be intelligent. Zhang Xuan said.
It is worth noting that in Zhang Xuan’s negotiation conditions, one of them is “Investing in Yixin, but also investing in easy-to-car”. No matter which giant is in Tencent, Baidu and Jingdong, Zhang Xuan has implemented it. This principle.
Whether today’s giants are still privatizing the car, it’s still “intoxication in Yixin”, and there are already obvious signs.
Yi Xin Group was originally owned by the Auto Finance Division of Yiche.com. It was independently operated in 2014 and listed on the Hong Kong Stock Exchange in November 2017. Its core businesses include loan-assisted and self-operated businesses. As of press time, the market value of Yixin Group was 10.894 billion Hong Kong dollars, far exceeding the 1.49 billion US dollars of easy cars.
Public information shows that Tencent currently holds 1.312 billion shares of Yixin through a wholly-owned holding company, accounting for 20.9%. And E-Car directly or indirectly owns approximately 278.84 million shares of Yixin, accounting for 43.74%. Together with the voting entrustment agreement signed by E-Car, Tencent and JD., E-Car directly or indirectly owns 53.59% of the voting rights of Yixin.
If the buyer group formed by Tencent and Hammer Capital completes the privatization of the car, it will obviously gain further control of the Yixin Group.
Screenshots from Yixin Group Announcement
In addition to Yixin’s entry into the automotive finance and trading arena, Tencent has also established Cloud and Smart Industry Group (CSIG) for the industry Internet sector Force, the car is the key link. In November 2018, Tencent announced the “Smart 4S Shop” solution for the first time. It will rely on WeChat public account, enterprise WeChat, mobile payment, small program and other tools to cover the drainage, small program appointment test drive, Go to the store reception, online CRM and other links.
Easy also said in the internal letter that the company is continuing to advance its operational strategy, “ie to build a large account system.Two-dimensional data system, three-in-one service window, and practice of new car…Each operating data has maintained rapid growth in the past year, and the App DAU has been growing more than the same year-on-year. 240%, sales leads increased by 900%.
Perhaps, in the traffic system of Internet giants, the car business will be revitalized.
Li Bin is getting saved?
After the introduction of Tencent, Jingdong and Baidu giants, Li Bin also concentrated on the car project Weilai. At the beginning of 2018, Li Bin announced his resignation as CEO of Yiche.com, and Zhang Xuan took over. Since then, Yixin Group and Yiche Group have been in charge of the financial general Zhang Xuan who joined the car in 2006.
In the automotive media and financial business, the automotive industry is more eager for capital and has a longer profit cycle. According to Weiyi’s first-quarter earnings report, the company’s total revenue was 1,631.2 million yuan and the net loss was 2,623.6 million yuan. Long-term losses have also made Weilai Auto’s funds anxious, and are optimizing the cost structure through measures such as layoffs and organizational restructuring.
This privatization transaction will obviously provide Li Bin with a return for blood transfusion.
Easy Carnet 2018 Annual Report Document Shareholders’ Shareholdings
According to the license file of Yiche.com, Jingdong Group is the largest shareholder of Yiche.com, holding 25.4% of the shares. Founder Li Bin still holds the number of shares of Easy Car 7755863, accounting for 11%.
If the repurchase price of $16/ADS, Li Bin will receive a gain of $124 million. “From a big perspective, I will still retain some shares.” Asked if he would sell all the E-Car stocks in his hands, Li Bin responded.
On the afternoon of September 5, Weilai Auto announced the issuance of a $200 million convertible bond. Li Bin and Tencent each subscribed for $100 million. Prior to this, Li Bin personally has invested more than 100 million US dollars in Weilai Automobile.
The automotive media business has encountered bottlenecks, and the emerging car-making business is in urgent need of blood transfusion. The choice is not difficult for Li Bin.