The car home (nyse:autohome) after the change of name “peace” did not live in peace。
On 9 january, the second-largest car dealer in the country sent an internal letter requesting that cooperation with the automotive house be discontinued, including on new members, advertising and contracting payments。
A number of leading car dealers followed. The youngda group, which ranks among the top five in the country, has a huge car trade, and has protested against the significant increase in membership fees at the motor house。
The motor home, china's most successful vertical information platform for the industry, had once exceeded $10 billion and was currently close to $9 billion, with net interest rates remaining at over 20 per cent per year。
At the end of the year, the cost of cooperation between distributors and car houses rose。
“a vertical web site based on automobile dealers, when its wings grow stronger, wants to rely on monopolies for ingestion.” li qiang, president of beijing express national investment, wrote on twitter to question the situation. Beijing express is a large group of distributors with an operating income of $31. 8 billion in 2017, ranking industry 15th。
Homes were listed on the united states new york exchange in december 2013。
Two years ago, china was able to put it under control for $1. 817 billion. The “sealed killings” occurred, with one voice saying that after china took over safely and cleaned up the old management, the car house became a capital-for-profit tool, and that the company's vision and mission gave way to profits and stock prices。
The price of a winter's reversal rose
The automotive home website was established in 2005 with a rapid rise in quality content, commercialization began in 2007 and a trail sales business for distributors began around 2009。
The thread is that the user leaves his or her own contact information after searching the platform for a particular car type of information, which constitutes a clue。
The platform wraps up the information collected and sells it to distributors, who visit by telephone to inquire about user needs and to get users to buy cars and complete the sale。
Sales trails are the main source of income for motor homes. According to the financial data, in the third quarter of 2018, income from this sector of operations amounted to 739 million yuan, an increase of 20. 4 per cent over the same period, or 39. 1 per cent of the proceeds。
According to data released to the outside world by u tao, vice-president of the house of automobiles and managing director of the ministry of marketing, in 2018 an average of 4580 leads could be obtained from the house of automobiles, calculated at a 4 per cent turnover rate, providing 180 items per year for each 4s store. Based on an average membership price of $100,000, the transaction cost for a bicycle is $555 and, based on an average vehicle sale price of $150,000, the cost for a car home is 0. 4 per cent of the sale price for a vehicle。
The main contradiction is that the automotive house has increased the dealer's fees by 20 per cent and has added a new version of wisdom and wisdom based on the original base membership fees and luxury membership fees. Of these, the cost of smart publications is $5,984 million and the cost of smart science publications is $6,284 million。
According to li yan wei, a member of the expert committee of the chinese automobile circulation association, this price is equivalent to a one-year profit for some small and medium-sized dealers. Many small and medium-sized distributors described prism as having a profit of less than $600,000 for the year 2018。
In an interview with the chinese automotive newspaper, wu tao tried hard to defend the price increase, “20 per cent of which is an increase in membership fees, not a single lead. In 2019, the total number of trails for motor homes is expected to grow by 10 per cent, with the unit price converted into clues rising by only 9 per cent, which we believe is reasonable compared to the increase of 6 per cent in inflation and 15 per cent in market flows.”
According to a report released by china in peace, from the third quarter of 2016 to the second quarter of 2018, the daily activity of motor homes increased from 219 million to 35. 5 million, an increase of 62 per cent。
However, some distributors have questioned the quality of the clues, arguing that there is more water in them, that some of the clues are even reused, that conversion rates are low and that their value is significantly reduced。
“it is against the rules of the market that the trails sold by the car houses to dealers are of increasingly poor quality and are subject to forced price increases. The only reason a product can increase prices is the increase in value for money, but it does not actually exist, because it thinks it has a monopoly status to operate now.” a professional who has been in the car sales business for more than 20 years told prism。
The core value of car houses as internet platforms is to reduce information asymmetries by providing users with professional automobile knowledge, objective assessments and a good community atmosphere, on the one hand, and by matching consumer needs and facilitating transactions in a more efficient manner, on the other。
Over the past decade, china's automobile industry has seen a great deal of progress, with a community of interests emerging from internet platforms and dealers such as automobile houses, automobiles and ika. With the onset of a chilling industry, car consumption has shifted from stock to incremental markets, and car homes have been targeted for price increases。
According to the chinese association of automotive industries, chinese automobile sales exceeded 28 million in 2018, a 2. 4 per cent decline compared to 2017, the first negative growth in the industry since 28, and few cars had met the annual sales target。
In an interview with the economic watch, chairman pang qinghua of a large group said, “the market is good and the price rises are understandable. It's not a good time. The price rises
In communicating with the automotive house, enterprises, including large groups, believe that the cost of purchasing and operating the distributors is increased by the high cost of membership when the industry is experiencing winters, when distributors have difficulty operating, and when the market costs of each 4s store are limited。
They hoped that the car house would make price concessions to help dealers reduce efficiency gains。
As more than 23,000 dealers had been contracted for membership fees and over 19,000 had been paid prior to the “sealing” incident, and if direct intervention in prices would cause confusion, the car house claimed to be looking at other ways to reward dealers。
It's an undefeated acquisition
Behind this conflict of higher prices is a history of capital that has to be mentioned。
In 2008, australian telecommunications purchased 55 per cent of each of the shares of the corporate media and bubble web belonging to the motor house, it168 and other websites at $73 million. Subsequently, australian telecommunications carried out several capital operations to increase the share of the car house to 71. 5 per cent。
At the time of the success of the ipo at the automotive house in december 2013, the number of aus shares remained constant, with shares and voting rights being diluted to 66. 2 per cent. Power in australia is undoubtedly the largest beneficiary of car homes。
According to the book, from 2008 to 2012, the income from the car house surged from $52 million to $733 million, an average annual increase of over 70 per cent. On the day the car house was put on the market, stock prices rose by 83 per cent, the company's market value reached $3. 17 billion, australian telecommunications holdings reached $2,267 million, and investments increased 20 times。
Two years ago, there was a major equity war that broke the face of the management and major shareholders of the motor home。
On 15 april 2016, australian telecommunications claimed that an agreement had been reached with china for the sale of 47. 7 per cent of the shares of the car house for $1. 6 billion at a trade price of $29. 55/ads。
Management did not know anything about this and responded quickly。
At that time, however, australian telecommunications continued to hold 54. 2 per cent of the shares of the automotive house, an absolute large shareholder with five seats on the board of 10; by contrast, the then ceo held 2. 9 per cent of the shares, the founder of which, li, wanted 2. 6 per cent, had no special voting rights, and the management of the company was unable to reverse the war on its own。
In the early morning hours of 16 april, a consortium of qin chi, boung capital, redwood capital and high capital issued a privatization offer to the board of directors of the automotive house at $31. 5/ads, which was higher than the safe bid. The consortium has repeatedly stated to the outside world that the privatization offer it initiated would be conducive to the long-term development of the car house and has publicly accused short-term investors who are safe and secure。
A “three-nation killing” opened the way. In order to prevent peace in china, the management, headed by qin, has done everything possible。
On 26 april, the automotive house announced the establishment of a special committee, composed of three independent directors of the automotive house, who would assess the management's offer。
Moreover, as required by policies such as the antimonopoly act, since both the automotive house and the safety insurance group had a turnover of over 400 million yuan in china in 2015 and had a combined turnover of over 2 billion yuan, meeting the reporting requirements of the antimonopoly act required them to apply to government departments for a centralized declaration。
On 11 may, the public shareholder of the motor house submitted a written letter of notification of the violation of the department of commerce antimonopoly act by the safe trust, which ended without delay。
On 13 may, in the absence of other shareholders and independent directors on the board, apt temporarily appointed a sixth member, increasing the membership of its board of directors from five out of the original 10 to six, and adopted an agreement with the chinese side for the registration of shares to clear the way for safe entry。
The management expressed great dissatisfaction with this behaviour and filed an appeal with the cayman islands court requesting the court to examine the details of the equity transaction before an independent audit committee and stated in the document that “the actions of australian telecommunications and their representatives to the directors of the car house were exercised in an improper manner, without any proper review or consideration, to the detriment of the small shareholders only in order to obtain the interests of one of the shareholders”
On 25 june, the court hearing in cayman announced the revocation of the car house's “prohibition” and australian telecommunications subsequently handed over the updated list of shareholders to china for peace. This means that ownership is officially completed, and china is safe and the largest shareholder in the car house。
Following the official change of owner of the motor home, the management who failed in the stock battle, including the ceo and the cfo bellheads, were replaced。
The former chief editor of the motel house, weisschin, argued that the motel house had lost control of these people and would no longer be the motel house, “the genes of every enterprise are closely linked to the genes of its founding team. Business success is also due to the genes of this group of people. The genetics of the team that created the motor home say it's a matter of principle."
On 23 february 2017, australian telecommunications sold the remaining 6. 5 per cent of the stock held in the car house to safety, at a cost of $217 million, and thus withdrew completely from the car house。
An active shareholder named arbitrage
China's home for the safe purchase of automobiles was originally completed through the science, technology and innovation investment fund under the peace trust, which is china's main pe (private equity investment) investment platform。
At the height of the competition for equity, there were details of the purchase of the car house by the media: the purchase of the house's share by the peace trust through the establishment of limited partnerships。
The “life of the partnership” shall be three years from the date of its establishment, and the duration of the partnership may be extended twice, each time for not more than one year, commonly referred to as 3+2. From a financial point of view, the safe trust buys a car house or a short-term investment of up to five years。
Whether the details of the transaction are safe or not。
“peace trust is not a butcher, it is a cattle trader whose transaction is financed by the peace trust, and the equity transaction is sold as a financial trust product to other syndicates for a period of three years. In other words, within three years, the peace trust must be cashed out of the stock exchange at the car house and share the benefits with the consortium behind it.” ma, former vice president of the car house, wrote earlier。
No one would deny that a car house is a good investment。
According to the report issued by the iri consultation, in the first quarter of 2016, the number of internet advertisements posted by various advertisers in the chinese automobile industry was 1. 93 billion yuan, an increase of 18. 4 per cent over the previous year. Of these, the market share of motor homes reached 31 per cent。
“peace trust loves such enterprises, is a team that is excellent, cash-rich, and has never been a disappointment. More importantly, the company stands in the most fashionable fashion of the car-internet industry, which does not have to work too hard to pay off new shareholders.” the horse just said。
In june 2016, when china officially took over the automotive house, it had a stock price of less than $30 and a market value of $2. 86 billion, but the stock price had now risen to over $70 per share, with a market value of $8. 9 billion。
Compared to the deteriorating situation of dealers, the growth in income in the motor home remains in the “fast lane”. In terms of income, in the third quarter of 2018, the car house received 1,889 million yuan, an increase of 33. 5 per cent over the previous year; the net profit was 681. 3 million yuan, an increase of 59. 9 per cent over the same period last year。
However, the three-year life of the safety trust product will expire in 2019, but under the original contract the partnership's life may be extended twice to 2021。
Prism contacted the car house official in multiple ways and tried to ask the other side to comment on issues such as whether the safe trust had exit plans. By the end of the text, prism had not been responded to。
It is worth noting that the conflict did not continue to expand with the mediation of industry associations and that the “sealing of doors” came to an end。
On 21 january, lu weimin and others, president of the national chamber of automobile dealers of the national chamber of commerce and industry, communicated with ceo of the automotive house and ceo lu min, to announce a concrete solution after the spring festival。
However, the capital shadow over the car house is far from being dispersed。
