Kaixin Auto Holdings (KXIN) stock prices closed the trading day on August 25th, 2021 at USD$3.25. Subsequent premarket fluctuations have seen the stock surge by 8.31%, bringing it up to USD$3.52.
KXIN Stock to Acquire Yujie
August 26th, 2021 saw KXIN stock announce the reaching of a binding term sheet. This will see the company acquire 100% of the equity of Henan Yujie Times Automobile Co., Ltd. through new share issuance. The partnering company is a leading Chinese manufacturer of electronic vehicles, specializing in small-size multi-function EVs. The pending transaction will be a pioneering major M&A transaction following the establishment of the company’s New Energy Vehicle Unit. This marks the company’s official entry into China’s small size EV market. This is forecasted to reach a 10 million vehicles scale over the next 5 years, according to its partnering company.
About Yujie
Having been established in 2017, the partnering company’s smart factory in Henan has an annual production capacity of 150,000 vehicles. As per Yujie, the company achieved a substantial production cost advantage to peers. The partnering company promotes three models of small size EVs under the POCCO brand, namely DuoDuo, MeiMei, and LaLa. DuoDuo and MeiMei are already in the commercial production stage.
Scope of KXIN Stock’s Partnership
The three models leverage the company’s innovative core technologies in small size EVs to achieve multi-function and large usage space. The partnering company’s in-house developed vehicle control system and core algorithm provide it with competitive advantages in power consumption, mileage, and new energy points. Furthermore, Yujie’s self-developed standardized battery pack can be conveniently replaced within 3 minutes.
Foray into EV MarketSpace
The signing of the term sheet represents a major breakthrough for KXIN stock to enter the electronic vehicle field. This constitutes a step toward the company’s goal of establishing its own EV eco-system, thereby establishing itself as a leading Chinese EV manufacturer. The company is supported by the rapid growth of China’s used car market, which it leverages with its own hybrid business model. This model affords KXIN stock a strong online presence, as well as a strong offline one.
Future Outlook for KXIN Stock
The company reported a strong quarter, consolidated by the signing of the binding term sheet to acquire Yujie. KXIN stock is poised to capitalize on the expanded scope of opportunities afforded to it in the burgeoning EV market space. Investors are hopeful that this will translate into significant and sustained increases in shareholder value over the long term.
