Kaixin Auto Holdings Announces Acquisition SPA with Morning Star

Rhea-AI Summary

Kaixin Auto Holdings (NASDAQ: KXIN) announced a share purchase agreement to acquire 100% equity of Morning Star Auto Inc. for 100 million shares of Kaixin ordinary shares. This acquisition includes all assets related to the POCCO brand of electric vehicles, marking a significant step in Kaixin's transition into the new energy vehicle market. CEO Mingjun Lin emphasized the strong growth of electric vehicles in China and the company's commitment to expanding its market share through strategic acquisitions and investments.

Positive

• Acquisition of 100% equity of Morning Star enhances Kaixin's presence in the electric vehicle sector.
• Control over POCCO brand assets strengthens the company's product offerings.
• Strategic move to capitalize on the rapid growth of the electric vehicle market in China.

Negative

• Issuing 100 million shares may lead to shareholder dilution.

BEIJING, Nov. 04, 2022 (GLOBE NEWSWIRE) -- Kaixin Auto Holdings (“Kaixin” or the “Company”) (NASDAQ: KXIN) today announces the signing of a share purchase agreement with the shareholders of Morning Star Auto Inc. (“Morning Star”), according to which Kaixin will acquire 100% equity of Morning Star by issuing 100 million shares of Kaixin ordinary shares.

Morning Star owns 100% equity of Wuxi Morning Star Technology Co., Ltd. and Henan Yujie Times Automobile Co., Ltd. At completion of the acquisition, Kaixin will own all assets and business operations related to the POCCO brand of electric vehicles (POCCO EV), which constitutes big progress toward Kaixin’s successful transformation into a new energy vehicle manufacturing company.

Mr. Mingjun Lin, chairman and CEO of the Kaixin, said: "The electric vehicles business is experiencing strong growth in China. Kaixin is committed to achieving accelerated transition into the EV industry through mergers & acquisitions and intensive investment to quickly gain the desired market share."

About Kaixin Auto Holdings

Kaixin Auto Holdings is one of the primary dealership networks in the premium used car segment and new car sales in China. Supported by the rapid growth of China's used car market and leveraging its own hybrid business model that offers both strong online and offline presence, Kaixin is in the process of transforming from a nationwide dealerships network to one of the important players in China’s electric vehicle market.

Safe Harbor Statement

This announcement may contain forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook for 2021 and quotations from management in this announcement, as well as Kaixin’s strategic and operational plans, contain forward-looking statements. Kaixin may also make written or oral forward-looking statements in its filings with the U.S. Securities and Exchange Commission ("SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Kaixin’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our goals and strategies; our future business development, financial condition and results of operations; our expectations regarding demand for and market acceptance of our services; our expectations regarding the retention and strengthening of our relationships with auto dealerships; our plans to enhance user experience, infrastructure and service offerings; competition in our industry in China; and relevant government policies and regulations relating to our industry. Further information regarding these and other risks is included in our other documents filed with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Kaixin does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For more information, please contact:

Kaixin Auto Holdings 
Investor Relations
Email: ir@kaixin.com 

SOURCE: Kaixin Auto Holdings

FAQ

What is the purpose of Kaixin's acquisition of Morning Star Auto Inc.?

The acquisition aims to strengthen Kaixin's position in the electric vehicle market by gaining control over the POCCO brand assets.

How does the acquisition of Morning Star affect Kaixin's stock symbol KXIN?

The acquisition is expected to enhance KXIN's market position, potentially impacting its stock performance positively.

When was the acquisition of Morning Star Auto Inc. announced?

The acquisition was announced on November 4, 2022.

What are the expected benefits of Kaixin's acquisition?

Expected benefits include increased market share in the electric vehicle sector and expanded product offerings.

How will the acquisition impact Kaixin's business operations?

The acquisition is intended to accelerate Kaixin's transition into a new energy vehicle manufacturing company.