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Public company info - CAR Inc. , 00699.HK
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CAR Inc., 00699.HK - Company Profile
Chairman -
Share Issued (share) 2,127,000,000
Par Currency U.S. Dollar
Par Value 1.0E-5
Industry Public Transport
Corporate Profile Business Summary: The Group is principally engaged in the car rental business. Performance for the year: For the year ended 31 December 2020, car rental revenue was RMB3,755 million, compared with RMB4,917 million for the same period last year. For the six months ended 31 December 2020, car rental revenue was RMB2,105 million, representing an increase of 28% over the first half of 2020. For the year ended 31 December 2020, Adjusted EBITDA was RMB2,019 million, compared with RMB3,464 million for the same period last year. For the six months ended 31 December 2020, adjusted EBITDA was RMB1,202 million, representing an increase of 47% over the first half of 2020. Business Review 2020 ended with a promising start. Towards the end of 2020, the Company moved several big steps ahead. The Company ultimately brought in a reputable shareholder and subsequently raised a sizeable funding to strengthen liquidity. In December 2020, MBK Partners, through its affiliate Indigo Glamour Company Limited （the “Offeror”), completed the acquisition of approximately 21% of the total issued share capital of the Company. In the following month, Mcqueen SS Ltd., an affiliate of MBK Partners, subscribed for an aggregate of USD175 million convertible bonds of the Company. The two milestones signalled a reboot of the Company after the prolonged impact of novel coronavirus (“COVID-19”) and uncertainty of shareholding structure. Despite the periodic disruption of mobility activities by the outbreak of COVID-19 throughout 2020 and the normal seasonal declines in the fourth quarter, the Company experienced an increasing pace of recovery in the second half of the year. During the Reporting Period, the Company recorded a recovered adjusted EBITDA of approximately RMB2,019 million, RMB1,202 million of which was generated in the second half of 2020, representing an increase of 47.2% as compared with that in the first half of 2020. Rental revenue and revenue from sales of used vehicles also showed a meaningful rebound at the same time. For the six months ended 31 December 2020, rental revenue was RMB2,187 million, representing an increase of 21.1% over the first half of 2020, revenue from sales of used vehicles was RMB1,179 million, representing an increase of 23.8% over the first half of 2020. In 2020, the Company generated a record high inflow of free cash flow of RMB4,929 million, safeguarding the Company against the outbreak of the COVID-19 pandemic and temporal financing limitations resulted from delicate shareholding structure at the time. In the difficult year of 2020, the Company has repaid all interests and maturities on time, and proactively communicated with lenders from time to time to prepay loans before maturities in a manageable manner to relieve lenders’ concerns in order to support long term relationship. During the Reporting Period, the Company repaid a total of over RMB8 billion to lenders. Looking back to the year of 2020, since early 2020, the outbreak of COVID-19 has caused an unprecedented decline in rental demand, which materially affected the Company’s business performance. For the year of 2020, the Company’s total revenue, which includes rental revenue and revenue from sales of used vehicles, was RMB6,124 million, representing a decrease of 20.4% year-over-year. During the Reporting Period, the Company recorded a net loss of RMB4,163 million, compared with a net profit of RMB31 million during the year ended 31 December 2019, mainly due to a decrease of 28.2% in rental revenue to RMB3,994 million, mostly attributed to the outbreak of COVID-19, the significant impairments of (a) the equity investment in UCAR Inc. (“UCAR”) of approximately RMB2,801 million; (b) trade receivables from related parties and other customers, who were mostly customers leasing vehicles from the Company, of approximately RMB593 million; (c) the prepayment of the subscription price of the shares and convertible bonds to be issued by FDG Electric Vehicles Limited (a company listed on the main board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”), stock code: 729, “FDG”) of approximately RMB86 million; and (d) adjustment of approximately RMB499 million of the residual values of all vehicles manufactured by Beijing Borgward Auto Co., Ltd. (“Borgward”). During the Reporting Period, car rental revenue was RMB3,755 million, representing a decrease of 23.6% year-over-year due to the significant impact of the outbreak of COVID-19. ADRR decreased by 13.8% year-over-year to RMB181, as a result of pricing initiatives to stimulate demand. Utilization rate was 53.3% due to weak demand as a result of the outbreak of COVID-19. Digital and paperless operations have continued to evolve. In December 2020, the Company’s self-served transactions increased to 91% of total reservations. In the fourth quarter, 99% of the Company’s car rental reservations were made through the Company’s mobile APP. As at 31 December 2020, the total fleet size was 109,688(1) . During the Reporting Period, the Company disposed of 38,378 used vehicles, compared with 29,203 vehicles for the same period of 2019. The sales of used vehicles generated a revenue of RMB2,131 million. The cost-to-sales ratio of used vehicles was 103.7%. Prospects: Since the outbreak of COVID-19 in early 2020, the government of the People’s Republic of China (the “PRC”) has continued to implement a variety of measures to contain the spread of COVID-19, including travel restrictions, quarantine advisories, required closure of business units, practice of social distancing, etc. The strain of COVID-19 and the resulting economic conditions, coupled by financing constrains, have placed the Company in the most difficult time ever. Now this is all behind and the Company is ready to move in to a new year. Sustaining the business through 2020 has proven that efficient asset management is a crucial protection to the Company. The proven track record of strong operation capability and cost discipline allowed the Company to react swiftly to different market conditions. Looking into 2021, the Company is committed to getting back on track to recovery, restoring stable business performance, and improving profitability. On the operational side, the Company aims to increase revenue by optimizing pricing mechanism, new customer acquisition, and fleet network redeployment. On the cost end, the Company will focus on improving cost structure through further upgrade of used car sales program and control of costs. The Company will continue to focus on digitalization across various aspects, through developing various mobile APPs, i.e. the car rental APP to serve customers with hassle free experience, the Smart Assistant APP to increase the efficiency of store operation and management, and new APPs for other programs. At the management level, the Company will introduce new incentive schemes to incentivise business performance, strengthen succession planning at each level to identify the best-fit talent for different positions, and further elevate corporate governance. The health and safety of customers and staff will continue to be the Company’s priority post COVID-19. Cleanliness and disinfection of rental facilities and vehicles are the top focuses of store operation. The Company will continue to enhance business performance while keeping customers and staff safe. On 4 March 2021, the Offeror and the Company jointly announced the closure of the conditional voluntary general cash offers (the “Offer”) to acquire all of the issued shares of the Company, after receiving a valid acceptance of approximately 92% of the disinterested shares in respect of the Offer. The acceptance results in the Offeror holding over 94% of the issued shares of the Company. Having MBK Partners as the controlling shareholder of the Company will bring the shareholding uncertainty (since April 2020) to an end, which in turn will help to stabilize the Company’s business operations and support positive views on the Company’s outlook and further strengthen the ability of the Company to meet its obligations.

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