At a time of frequent weakness in the U.S. stock market, recently, a Chinese general stock “demon stock” has become popular overnight with its “record” of 14 times over four days. This “demon stock” is the happy car with a record low share price last month. < p > < p > according to the data, Kaixin automobile was established in 2015, which is a wholly-owned subsidiary of Renren company mainly engaged in second-hand car business. The company has been in a loss state for three consecutive years. Its share price soared on October 14, when it soared 266.67% to $1.98/share and fell 32.83% to $1.33 the next day. Surprisingly, under the background of no obvious positive stimulation from the news, its share price has been on the “rocket” again since October 16, and has risen to $8.15/share on October 19, and has soared by more than 1400% in four trading days. Pan Helin, executive director and professor of the Digital Economy Research Institute of Central South University of Finance and law, pointed out that under normal circumstances, the stock prices of enterprises are affected by multiple factors, but on the whole, based on the fundamentals, the stock prices of some enterprises with long-term losses suddenly soar, which may be the expectation of some investors that they are optimistic about it, and of course, the possibility of fund speculation behind it is not ruled out. However, the hype divorced from the fundamentals will eventually be beaten back to its original form. < p > < p > < p > < p > the reporter of China business daily noted that as of November 3, the share price of Kaixin automobile had fallen to US $3.13 per share. However, Kaixin automobile had not responded to the abnormal fluctuation of the stock price from the beginning to the end. The reporter repeatedly called its relevant departments and did not receive a reply. According to Tianyan information, Kaixin automobile is a high-end used car dealer group of Renren company, focusing on high-end second-hand car trading services, and the company’s main operating body is Shanghai jieying Automobile Sales Co., Ltd. In May 2019, Kaixin auto was listed on Nasdaq, becoming the second used car company to be listed successfully in China after Youxin was listed in June 2018. However, the performance of Kaixin automobile in the capital market did not make investors very happy after listing, which broke out on the day of listing, and then remained in a long-term downturn. Since the beginning of this year, Kaixin Auto’s share price has even fallen below US $0.5/share for many times, and on September 8, it hit a new low of US $0.41/share. The reason may be related to the company’s performance. According to the data, from 2017 to 2019, the net losses of Kaixin automobile were $28.695 million, US $89.532 million and US $69.68 million respectively; the cash flows from operating activities were respectively US $73.7 million, – 9.7 million and – 4.7 million. < / P > < p > in addition, in terms of liabilities, the asset liability ratio of Kaixin automobile from 2017 to 2019 is 99.65%, 136.46% and 95.35%, which is far higher than the average level of the automobile industry. < / P > < p > the reporter noted that from 2018 to 2020, Kaixin automobile failed to submit quarterly report and annual report on time for several times. This year, it failed to submit 20-F report on time, which violated the Listing Rules of NASDAQ. Once upon a time, it received a warning letter from NASDAQ asking it to submit regular financial reports to the US Securities Regulatory Commission. < p > < p > therefore, under the background of continuous loss and no obvious positive stimulation on the news, the stock price fluctuation of happy automobile has a trace of unpredictable color. If the stock price of NASDAQ is not enough to be listed in the United States, it will be issued a warning that if the stock price of NASDAQ is not enough, it will stop trading for 30 days Edge. < / P > < p > many professionals have analyzed that Kaixin automobile’s share price has soared or caught the express of new energy vehicle market. Recently, with the control of the epidemic situation, the sales of new energy vehicles have risen, which has led to the activity of relevant concept plates. The stock price of Weilai automobile, a new automobile manufacturing force listed in the United States, has experienced a big rise. However, some people in the industry believe that the possibility of fund speculation is not ruled out. “The whole capital market is speculated by investors. Both the US capital market and China’s capital market are speculative, so the temporary stock price fluctuation may not reflect the real price.” Pan and Lin said. < / P > < p > it is understood that in the domestic second-hand car market, Kaixin automobile belongs to a relatively low-key category, which is different from Youxin, Guazi and other used car e-commerce platforms. Kaixin automobile focuses more on offline layout and is positioned at high-end used car sales. At the time of listing, its self-supporting business has covered 14 cities, nearly 20 stores, and cooperated with nearly 1000 small and medium-sized used car dealers. However, happy car sales are not ideal. According to the data, from the middle of 2017 to the end of 2019, Kaixin automobile purchased and sold 15668 used cars. A total of 6005 used cars were sold in 2019, a year-on-year decrease of 19.26% compared with 7438 in 2018. < / P > < p > according to the data released by the automobile industry association, the cumulative transaction volume of second-hand cars in China in 2019 is 14.9228 million, with a year-on-year increase of 7.96%. According to this calculation, the market share of used car sales of Kaixin automobile in 2019 is only 0.04%. < / P > < p > although the sales volume of Kaixin automobile is insignificant in the whole industry, in the main business structure of Kaixin automobile in 2019, the automobile sales accounted for 99.38%, and other income accounted for 0.62%. So, in August this year, when happy auto announced its decision to stop its used car dealer business, it was quite surprising. < / P > < p > according to the announcement at that time, Kaixin automobile said that the company recently filed legal proceedings against the non controlling shareholders of its three dealers, which accounted for the majority of Kaixin automobile’s revenue in 2019 due to their disputes over business issues.
happy car also novel coronavirus pneumonia has a major adverse impact on the company’s used car dealer business, resulting in a sharp reduction in revenue. To address these serious challenges to the company’s operations, the company has been reviewing its business model and has decided to stop its used car dealer business. As a result, the company expects revenue in the second quarter of 2020 to be significantly lower than in previous quarters, and there may not be meaningful revenue from the third quarter of 2020. As for how to adjust the new direction after the suspension of dealer business, Kaixin automobile did not explain in the announcement. < / P > < p > “China’s second-hand car companies are generally not profitable. The main reason is that the current used car market is seriously affected by the policy, and the policies in different places are different, which leads to the pain points of selling used cars in different places, transportation and circulation, etc In the view of automobile analyst Zhang Xiang, the second-hand car trading market is strongly dependent on policies, and it is expected to wait at least 3-5 years to achieve profitability. Zhang added that although Kaixin’s high-end second-hand cars are competitive in the second-hand car market and there are few competitors on the track, such advantages are difficult to highlight under the same policy environment. At the same time, for happy car, whose cash flow is not ideal, the high-end business may also add to its burden. In fact, Kaixin automobile once carried the hope of Chen Yizhou, chairman of Renren company and chairman of Kaixin automobile group, to make money. Chen Yizhou once said in the bell of Kaixin Auto’s listing: “in the past, we did too much money losing Internet business. In the future, we should try our best to make money.” < / P > < p > after reviewing Chen Yizhou’s resume, the reporter found that he had been involved in a number of industries, including games, optical communications, Internet finance, blockchain, etc., of which Renren is the most representative. Renren has made social games such as stealing vegetables and robbing parking spaces. In the second half of 2012, Renren’s income has reached 10 billion yuan. < p > < p > in 2014, Chen Yizhou launched Renren installment and Renren financial products successively, and established Renren financial holding (predecessor of Kaixin automobile, renamed at the beginning of 2018) in the second year, and launched inventory financing business of second-hand car dealers. However, the good times are not long. According to the data, the net loss of Renren reached US $2201 million in 2015 and US $185.4 million in 2016. Since 2016, Renren has been delayed in publishing the annual report of the previous year, and rumors of Renren’s “delisting” have appeared from time to time. < p > < p > on November 14, 2018, Renren company sold all the assets of Renren to Beijing duoniu Interactive Media Co., Ltd. at a price of 20 million US dollars, which means that Renren company only has the business of “second-hand car”. After selling renren.com, Chen Yizhou has repeatedly expressed his high hopes for the “only seedling” of second-hand cars. He thinks that this is an industry that can “make steady profits”. Kaixin automobile’s model is a combination of online and offline, which does not burn money and can make steady profits. He will concentrate on domestic used car retail business in the future. < p > < p > unfortunately, to this day, Kaixin still fails to let Chen Yizhou see profits. The whole second-hand car market competition environment is becoming increasingly severe, including Youxin, Renren car and other negative news in the industry. Renrenche has been involved in rumors of “bankruptcy” and “broken capital chain” for a long time. In more than two years, no new financing was obtained. Soon after the founder quit, it was revealed that he planned to set a price of HK $10000 to sell the Hong Kong business to 58 cities; Zibao was exposed to be in arrears with employees’ wages, and the CEO was restricted to high consumption; dasearch laid off 13% to 14% of its employees; Youxin set a price of US $105 million for its “youxinpai” business Sold to 58 same city < / P > < p > it is not difficult to see that Kaixin automobile is in the dilemma of “internal and external troubles”. Under various challenges, can Kaixin automobile still realize Chen Yizhou’s “profit dream”? < / P > < p > Disclaimer: the purpose of this article reprinted by china.com finance and economics is to convey more information and does not represent the views and positions of the website. The content of this paper is for reference only and does not constitute investment advice. Investors operate accordingly and bear their own risks. < p > < p > Chinanet is a national key news website under the leadership of the Information Office of the State Council and managed by China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website releases information 24 hours a day, which is an important window for China to carry out international communication and information exchange.