In early trades today, shares of Kaixin Auto (NASDAQ: KXIN), a China-based used car dealership network, have been surging. Kaixin Auto stock was priced at $3.70 at the last check, rising +7.25% or $0.35. A market cap of $218M has been reached by KXIN stock with a rise of 3.60% increase over the past week. Although there do not appear to be any news directly connected to the momentum in KXIN stock, recent developments may well be driving the Kaixin Auto stock to continue making gains.
Kaixin Auto Holdings is an automobile sales enterprise involved in dealership of used cars in the People’s Republic of China. By December 31, 2019, there were 14 dealerships in the company’s network. In addition, Kaixin Auto provides financing, insurance, extended warranties, and after-sales services to its customers through its partnership with financial institutions. KNIX is a subsidiary of Renren Inc and was founded in 2015 with its headquarter located at Beijing, the People’s Republic of China.
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Haitaoche Limited early this month, unveiled that it was in talks with a leading online retailer in China about a partnership to tap into China’s booming e-commerce auto market.
Kaixin has established a definitive merger agreement with Haitaoche shareholders on December 31, 2020. The agreement indicates that Kaixin will purchase 100% of the Haitaoche from its shareholders upon completion of the acquisition.
What’s in it for KXIN?
By leveraging its expertise in consumer vehicle sales and full range of value-added services, Haitaoche hopes to gain access to China’s fast-growing e-commerce auto sales market and tap into diversified revenue source and growth opportunities. The firm with which Haitaoche had been discussing partnership was one of the leading e-commerce platforms in China that services hundreds of millions of active customers from a variety of e-commerce product categories. Ultimately, that move will prove beneficial to Kaixin Auto (KXIN) once the merger transaction is completed.