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Kaixin Holdings (KXIN) is a prominent auto retail platform specializing in luxury used cars and imported new cars. The company is renowned for its comprehensive involvement in the research and development, design, manufacturing, and sales of electric vehicles. Kaixin places a significant emphasis on the innovation of next-generation autonomous driving and artificial intelligence technologies.
Kaixin primarily generates revenues from the sales of used cars, along with fees from its role as a channel partner for third-party auto financing and other value-added services. The company's diversification into new energy vehicles marks a strategic transformation aimed at aligning with future industry trends. Kaixin produces a variety of electric passenger and logistics vehicle models and is equipped with professional teams experienced in R&D, production, marketing, and operations.
Recent achievements include the inclusion of Mr. Lei Gu, a seasoned expert in automobile R&D, into its high-caliber team. Under the leadership of Mr. Mingjun Lin, Chairman and CEO, Kaixin is steering towards becoming a new energy vehicle manufacturer. The company has also forged partnerships and expanded its operations internationally, notably with Myanmar's New Power Auto. This strategic move aims to stimulate China's automobile export growth and foster Kaixin's competitive international market position.
Kaixin's commitment to sustainability is evident in its efforts to contribute to the goals of peak carbon emissions and carbon neutrality. By leveraging its expertise and innovative drive, Kaixin is at the forefront of integrating online and offline presence and diversified business operations, setting a strong foundation for future growth and market expansion.
Kaixin Auto Holdings (NASDAQ: KXIN) announced a five-year vehicle supply contract with China National Vehicles Imp & Exp Co., Ltd. (CVC) through its subsidiary Haitaoche Limited on January 11, 2021. The contract, valued at RMB 14.9 billion (approximately US$2.3 billion), will start with RMB 2 billion (around US$300 million) in vehicle supply and increase by at least 20% annually. This partnership marks a strategic initiative to enhance Haitaoche's auto supply and includes plans for further partnerships to expand sales networks, particularly in electric vehicles.
Kaixin Auto Holdings (NASDAQ: KXIN) has entered a definitive Share Purchase Agreement to acquire 100% of Haitaoche Limited, an online platform for imported automobiles, as of December 31, 2020. In exchange for Haitaoche shares, Kaixin will issue approximately 74 million ordinary shares. This acquisition requires Nasdaq approval due to a change of control and is expected to close by March 31, 2021. Haitaoche aims to lead in innovative automotive retail, focusing on electric vehicles and potential collaborations with major manufacturers.
Kaixin Auto Holdings (NASDAQ: KXIN) reported its unaudited financial results for the six months ending June 30, 2020, revealing a significant decline due to the COVID-19 pandemic. Total net revenues fell 83.7% to US$33.3 million, with a gross profit of only US$0.9 million, down 89.3% year-over-year. The number of cars sold dropped to 673 units from 3,657 units. The company experienced a net loss of US$5.8 million, compared to a net income of US$57.3 million in the same period last year. Management anticipates minimal revenue for the second half of 2020.
Kaixin Auto Holdings (NASDAQ: KXIN) announced the appointment of Marcum Bernstein & Pinchuk LLP as its independent registered public accounting firm, effective December 9, 2020. This change follows a comprehensive evaluation process and has received approval from the company's board and audit committee. The new auditor replaces KPMG Huazhen LLP. Importantly, this decision was not due to any disagreements on accounting principles or auditing practices between Kaixin and its previous auditor.
Kaixin Auto Holdings (NASDAQ: KXIN) announced a merger with Haitaoche Limited on November 3, 2020, allowing Haitaoche to become a wholly-owned subsidiary of Kaixin. As part of the agreement, Haitaoche shareholders will own 51% of Kaixin post-merger. Haitaoche is an e-commerce platform for imported automobiles, aiming to enhance its retail presence in China. In a significant leadership change, Mr. Mingjun Lin, the founder of Haitaoche, has been appointed acting CEO, succeeding Mr. Chen Ji and Mr. Jinfeng Xie. The merger's completion is subject to regulatory approvals and minimum asset requirements.
Kaixin Auto Holdings (NASDAQ: KXIN) has initiated legal proceedings against non-controlling shareholders of three dealerships, which contributed significantly to its 2019 revenues. The company is facing substantial revenue losses due to the COVID-19 pandemic impacting its used-car dealership segment. As a result, Kaixin will cease used-car dealership operations, anticipating lower revenues for Q2 2020 and potentially no meaningful revenues starting Q3 2020. These developments raise concerns about the company's financial stability moving forward.
Kaixin Auto Holdings (NASDAQ: KXIN) announced on July 28, 2020, that Tianruo Pu has resigned from its board of directors, effective July 27, 2020, to focus on other business commitments. Pu served as the chairman of the Audit and Compensation Committees since the company's merger with CM Seven Star Acquisition Corporation in April 2019. Following his departure, Lin Cong remains the only independent director and the sole member of both committees. Kaixin operates a significant dealership network in China's premium used car market, leveraging a hybrid business model.
Kaixin Auto Holdings (NASDAQ: KXIN), a leading premium used car dealership network in China, filed its annual report on Form 20-F for the year ended December 31, 2019, with the SEC on July 10, 2020. The report includes the company's audited consolidated financial statements, accessible on the SEC's website and through its investor relations section. Kaixin has successfully transitioned from a tech-enabled financing platform to a nationwide dealer network, capitalizing on the rapid growth of China's used car market.
Kaixin Auto Holdings (NASDAQ: KXIN) reported its 2019 financial results, revealing total net revenues of US$334.7 million, a 22.4% decline from US$431.4 million in 2018. The company reported a gross loss of US$5.5 million, down from a gross profit of US$17.4 million. Net loss attributable to the Company decreased 22.9% to US$69.1 million. Notably, operating expenses surged 148.4% to US$128.0 million, mainly due to a US$74.1 million goodwill impairment. Kaixin's operational performance was impacted by macroeconomic conditions and restructuring efforts.
Kaixin Auto Holdings (NASDAQ: KXIN) has been notified by Nasdaq regarding non-compliance with Listing Rule 5250(c)(1) due to the delayed filing of its annual report, Form 20-F, for the year ending December 31, 2019. The company must submit a compliance plan by August 31, 2020, and, if accepted, has until December 28, 2020, to regain compliance. The delay was attributed to logistical issues stemming from the COVID-19 outbreak. Kaixin plans to file the Form 20-F by July 10, 2020.
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