AutoBeta(AutoBeta.net)09/12 Report--

On the evening of Sept. 11, Kaixin Motor suddenly announced that it had signed a non-binding letter of intent with WM Motor Holdings Limited, planning to issue a certain number of new shares to acquire the 100% stake held by its shareholders.

Lin Mingjun, chairman and CEO of Kaixin Motor, said that Weimar's product positioning is very consistent with the development plan of Happy Motors. Through this merger and acquisition cooperation, Weima Motor will also have a larger capital stage and better promote the development and landing of the intelligent travel industry.

It is understood that Happy Automobile was founded in 2015, formerly known as Renren Automobile, is Renren's domestic Gao Guang used car dealer group. In 2015, Kaixin Automobile entered the used car industry with auto finance business, opened used car retail business in 2017, and focused on used car trading services, becoming one of the used car dealers in China. In May 2019, Happy Motor listed on NASDAQ through SPAC, becoming the second successful second-hand car company in China after Youxin, but the performance of Happy Automobile after listing was amazing, and its share price broke on the first day of listing.

After Renren announced the sale of all Renren social network assets for $20 million in November 2018, Renren CEO Chen Yizhou said he would concentrate on the domestic used car retail business, pinning his hopes on happy cars. However, Happy cars, which focus on second-hand car distribution, are not "happy" and have not reached Chen Yizhou's profit target. It is understood that Happy Motor has been in a state of loss for a long time since its listing, with net losses of US $46.116 million, US $5.303 million, US $196.579 million and US $84.706 million respectively from 2019 to 2021. Under the long-term loss, the share price of Happy Automobile remained depressed, and even was on the verge of delisting.

In December 2020, Kaixin Motor and Haitao Automobile Group reached a reverse merger agreement, and the two sides carried out full integration. Subsequently, Lin Mingjun, founder of Haitao Group, became the new director and CEO of Kaixin Motor. The acquisition sent Kaixin's share price soaring to as much as $13.4.

After Lin Mingjun took office, Happy Motor began to change the track, from second-hand car distribution to new energy car manufacturing. In August 2021, Kaixin Automobile announced the establishment of a new energy vehicle department and the formation of new energy vehicle R & D, production and marketing teams.

On August 22nd, Kaixin announced that it had completed the acquisition of MORNING STAR AUTO INC. (Maolinstadt for short), Happy Motors will issue an additional 100m common shares to acquire 100% stake in Maolinstad. It is reported that Maolin Sida mainly produces mini electric cars. Wuxi Maolin Sida Technology Co., Ltd., a wholly-owned holding company, holds a 40% stake in Henan Yujie time Automobile Co., Ltd., Henan Yujie owns the punk car brand. It mainly produces and sells mini electric cars, including punk duo, punk Meimei and punk Lara. After the completion of the acquisition, Maolin Sida became a wholly owned subsidiary of Kaixin Automobile, marking the company's official entry into the field of new energy vehicle manufacturing and owning all the assets of punk cars.

However, Kaixin Motor's acquisition of Maolin Sida was not recognized by the secondary market, and its share price rose 6.05% on the day of the acquisition.

As for the acquired company, Weima Automobile, I believe everyone is already familiar with it. The company was founded in January 2015 by Shen Hui, former director and vice president of Geely holding Group, former senior vice president and chairman of Volvo Automotive in China. Weimar EX5, the first volume production car, was launched in May 2018. Since its establishment, it has received investment from companies including SAIC, Tencent, Sequoia Capital China, Baidu and so on. The accumulated financing exceeded 40 billion yuan. As one of the four little dragons of car building, Weima is now in a deep business crisis, shutting down production, laying off staff, cutting wages, closing stores, suspending factory production, moving out of its headquarters in arrears of rent, and not even being able to visit Mini Program. Weimar has reached the final stage of life and death.

Backdoor listing has become the only chance for Weimar to "survive". On January 11, APOLLO disclosed a major acquisition announcement that the company intends to acquire the entire issued share capital of WM Motor Global Investment Limited, a wholly-owned subsidiary of Weimar Holdings Limited (hereinafter referred to as "Weimar"), for US $2.023 billion (about HK $15.854 billion) and will settle the matter by allocating 28.8 billion shares at HK $0.55 per share. However, accidents are always so caught off guard. On Sept. 8, APOLLO abruptly announced that the parties concerned had agreed to terminate the acquisition agreement, which meant that the hope of listing and financing of Weima Motor would almost come to an end.

Shen Hui did not publicly respond to the termination of the acquisition, but instead said on Weibo: "good things wait for the flowers to blossom." At present, "good thing" should refer to the acquisition of Weima Motor by Happy Automobile. As for how and how the "flower" should be opened, it is not clear how Happy Automobile and Weima Automobile should be opened.

In fact, if you think about it, what if Happy Motors acquires Weimar Motors? Car building is an extremely expensive industry, and so far only Tesla and ideal cars have made profits, while Ulay and Xiaopeng have been in a state of loss for many years. BAIC Blue Valley and Cyrus in traditional cars are also losing money, while Happy Automobile, as a used car dealer, under the background of not optimistic funds and high debt ratio, it is very difficult for Happy Automobile to enter the new energy industry. As for Weimar, it is more like a new power company abandoned by the times, its products lack technological innovation, and its operating condition has been above the warning line for a long time. From this point of view, happy car + Weima car, it seems that the market is also difficult to give optimistic expectations.

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