On the evening of September 12th, Didi Chuxing (HK: 02559) announced that its indirectly wholly-owned subsidiary, Pinduoduo Beijing, has entered into a memorandum of understanding with Youxin Co., Ltd. Accordingly, Youxin Co., Ltd. agrees to issue and sell, and Pinduoduo Beijing agrees to subscribe for a total of 1543845204 shares of Youxin Co., Ltd.'s Class A common stock at a subscription price per share. The shares will be delivered to Pinduoduo Beijing in the form of 5146151 American depositary shares, with a total subscription amount of 7.5 million US dollars (approximately 53.2 million RMB).
The board of directors of Dida Travel announced that on September 12th, PinTu Beijing and Uxin Anhui entered into a loan agreement. According to this agreement, PinTu Beijing agrees to provide Uxin Anhui with an equivalent amount of RMB loan of 7.5 million US dollars for a period of 18 months from the withdrawal date, subject to the terms and conditions of the loan agreement. Affected by this news, UXIN surged nearly 29% in pre-market trading on September 13th.
Uxin Limited is mainly engaged in providing second-hand car purchasing products and services to customers nationwide through online platforms and offline retail stores. The board of directors of Dida Travel believes that due to the potential synergies between our group and Uxin Limited in the automotive aftermarket industry and the growth opportunities in the second-hand car market, it is recommended that the subscription be beneficial to our group. Dida Travel hopes to provide more after-sales services for private car owners on its platform through cooperation with Youxin Co., Ltd., promote second-hand car transactions, attract more private car owners, and enhance Dida's passenger transportation capacity.
Dida Travel also stated in the announcement that the loan must be approved, agreed upon, and authorized by overseas direct investment for use as operating capital by the domestic subsidiary of Youxin Co., Ltd.
The announcement mentioned that the total subscription amount is 7.5 million US dollars, calculated based on the subscription price of 0.004858 US dollars per share (or 1.4575 US dollars per American Depositary Share). The subscription price was determined through consultation between PinTu Beijing and Uxin Co., Ltd., and a discount of approximately 17% of Uxin's average closing price per share on NASDAQ for the 60 consecutive trading days prior to the signing of the memorandum of understanding was calculated. As of press time, Uxin reported $1.53 per share, a slight increase of 0.66%.
According to the memorandum of understanding, Pinduoduo Beijing and Youxin Co., Ltd. will negotiate an additional investment of 7.5 million US dollars ("Future Financing") and strive to sign a final agreement, provided that Youxin Co., Ltd. must complete one or more new investments with a total amount of no less than RMB 100 million or equivalent US dollars with investors unrelated to Youxin Co., Ltd.
According to the financial report information, in the first half of this year, Dida Travel's revenue was 404 million yuan, an increase of 2.0% year-on-year. The net profit was 948 million yuan, a year-on-year turnaround. Adjusted net profit (not measured under International Financial Reporting Standards) was 130 million yuan, an increase of 51.3% year-on-year. As of June 30, 2024, the registered users of Dida Travel have exceeded 368 million. The platform provides ride hailing services in 366 cities across the country and taxi hailing services in 96 cities in China.
According to third-party industry statistics, China has become the world's largest growing private passenger car market by 2023. As of the end of 2023, the number of private passenger cars in use was 275 million, and it is expected to reach 378 million by December 31, 2028. Some industry insiders believe that the supply side of the ride hailing business is mainly private car owners, who already have a large demand for after-sales services. The after-sales service business can help Dida explore new growth points, improve the ride hailing business chain, and enhance the platform's car owner stickiness.
At the 2024 mid-term performance conference, Song Zhongjie, Chairman and CEO of Dida Travel, made it clear that in the second half of the year, he will continue to focus on optimizing user experience and enhancing user stickiness and value through various means. This includes providing diversified after car services to a large number of private car owners, ensuring that users can enjoy high-quality and reasonably priced after car services through cooperation with reliable partners, and providing more convenience and protection for users' travel.