On October 3, a rental car submitted an application for the IPO to the United States. This was the second Chinese car rental company to be listed after Shenzhou Car Rental (00699.HK) successfully listed and funded Hong Kong for HK$3.45 billion in September. In 2010, Zhang Ruiping, the founder and CEO of Car Rental Co., once stated that he planned to go public in one or two years. However, in 2012, the company that was leading the rest of the industry in China was unsuccessful in its listing in the United States, and the Chinese car rental industry was no longer listed on the market. Today, the market environment is very different. Not only did companies that once withdrew from the capital market in a privatized manner restarted their listings, but also a variety of emerging modes such as platformization and sharing in the car rental market prospered and developed together. The China Car Rental Corporation went to Hong Kong in September. The second sprint is also listed on the perfect ending with 201 times oversubscription. Zhang Junyi, a partner in the automotive industry at Roland Berger International Management Consulting, said that the entire car rental market is starting in China and abroad. Even if there are more platform companies in the car rental market in the future, they will need to be supported by the operating companies of the physical models. Now that the entire Chinese market and the policy environment are also conducive to the development of the car rental business, the companies choose this time to go public. Business operations are constantly improving. However, unlike the Shenzhou Car Rental, which was successfully listed one step ahead of schedule, the IPO documents submitted by the rental car show that it was still in a loss state as of the first half of 2014. It is not optimistic from the perspective of financial data or business “closed loopâ€, how to persuade the market “Storytelling†is a test that we must face in the future. Not beautiful data A rental car this time went to the United States to raise 200 million U.S. dollars in the listing plan. According to the published IPO documents, as of June 30, 2014, there were 15,409 rental car fleets, and business operations in 2012, 2013 and the first half of 2014. Revenues were RMB 450 million, 566 million and 384 million respectively. Since its founding in 2006, one-time rental car has won many rounds of investment including Enterprise Holdings, Qiming Ventures, JF Asia, CDH Ventures, and Goldman Sachs. In December 2013, Ctrip also became the second-largest strategic partner for car rentals, as soon as the car was hired by Ctrip for $100 million in financing. After that, Ctrip has included a car rental online reservation system. In June 2014, a mobile application for renting a car was also included on the Ctrip website. Benefiting from this, in its car rental orders, orders from mobile phones exceed 30%, and online bookings approach 55%. The average daily income of the entire fleet of bicycles was 145 yuan, 156 yuan and 160 yuan in the first half of 2012, 2013 and 2014, respectively, and the average short-term rental rate remained at around 70%. Despite the continued growth in performance, the high cost has caused financial data to remain unoptimistic. The ratio of operating cost to sales revenue of car rental in 2013 was 1.175, which improved in the first half of 2014 and the operating cost accounted for 97% of sales revenue. From the perspective of the core net profit, the net profit after taxation of a rental car for the last three years were -330 million yuan, -3.71 billion yuan, -156 million yuan, and the net profit after tax was -74% and -55%, respectively. -41%. The degree of net loss in operations in recent quarters has continued to improve, such as a loss of 11.84 million yuan in the first quarter of 2014 and a loss of 2.85 million yuan in the second quarter, but if it counts the interest of its convertible bonds (preferred shares), its The net profit was -156 million yuan. In contrast, after several years of scale and operational efficiency improvement, the company has achieved a net profit of 218 million yuan in the first half of the year, and its net profit rate has also reached 15.8%. From the perspective of cash flow, the cash flow of a rental car from 2012 to the first half of 2014 was -250 million yuan, -570 million yuan, -760 million yuan; and during the same period, the operating cash flow from Car Rental (before the vehicle purchase and disposal) For many years of affluence, it reached 440 million yuan in the first half of 2014. And in the short term, the rental car will face repayment pressure. At present, a total of RMB 790 million is used for car rental, of which RMB 290 million is required to be repaid within one year, RMB 413 million is required to be repaid from one to three years, and RMB 87.76 million is required to be repaid from three to five years. yuan. In Zhang Junyi's view, not-so-pretty financial data will certainly cause investors to question, but it is not important for companies that go to the United States to have a loss. The key is whether they can develop in a good direction. For example, Tesla (NASDAQ: TSLA) has not been profitable. He believes that the U.S. environment is relatively loose compared to the domestic environment, but it is still based on a major premise - the future development story and development intent. Any investor does not want his invested money to suffer long-term losses. The financial status of a rental car to the United States will affect the listing, China's car rental and a car rental future development direction will be separated, the Economic Observer reporter called a car rental, the company said that prior to the listing inconvenience to make any comments. Established pattern of difficulties According to Roland Berger’s data, the size of China's car rental market has grown from 9 billion yuan in 2008 to 34 billion yuan in 2013, a compound annual growth rate of 29%; the number of vehicles has increased from 100,000 in 2008 to 369,000 in 2013. Vehicles, a compound increase of 30%. It is expected that the scale of China's car rental market will increase to RMB65 billion in 2018, and the number of vehicles will reach 779,000 units. From the current pattern of car rental industry, this market demand is far from being satisfied. According to public statistics, as of June 30, 2014, there were 52,500 cars in China's 70 cities operating in 717 direct-rent car rental service stores in China, and they had joined 202 service centers in 162 cities. . While the rental car is currently operating in more than 90 cities across the country, its fleet is over 15,000 vehicles. It is due to the size of the team that there is a clear gap between the financial data of both parties. Relative to the rapid expansion of the rival China Car Rental, the performance of a car that was set up for eight years was slightly flat. And this time a trip to the United States to choose a car rental scene, and two years ago, China's car is somewhat similar. At that time, the financial data of China’s car rental companies were not so “brilliant†now. Despite the dramatic increase in fleet size and operating income, the cost pressures of rapid expansion did not find exports. Not a beautiful financial situation and incomplete business model became stumbling block. When sprinting the secondary listing, the financial performance of China Shenzhou Car Rental Co., Ltd. has significantly improved. Not only does the net profit exceed RMB 200 million, but Shenzhou Car Rental and You Xinpai have also reached a cooperation in second-hand car processing to create a “closed-loop business†and accelerate the operation efficiency of the company. Raise and fund recovery. The data disclosed in this rental car did not show detailed sales of used cars. According to its sales revenue, it was approximately RMB 20 million in 2012 and 61 million in 2013. In the first half of 2014, it was 27 million, assuming that each car sold at a price of 5 Millions of dollars are estimated to be about 400 cars, 1200 cars, and 500 cars for sales of used cars in 2012, 2013, and 2014 respectively. In the first half of 2013, Xianzhou Car Rental disposes 9,986 sets and 11,722 used cars. The proportion of used car sales revenue is increasing, accounting for 18.3% and 25.8% of total revenue respectively. Whether to solve the problem of second-hand car sales and form a complete closed-loop business is one of the reasons why China Shenzhou Car Rental Co., Ltd. failed to enter the US market for the first time. It is also a problem that this car rental cannot avoid. An industry source told the Economic Observer News that corporate assets such as China Car Rental and Car Rental are relatively "heavy," and costs will continue to grow with the growth of the fleet size. It is difficult to balance expansion and profitability in the short term. Moreover, the current car rental industry is in a state of “burning moneyâ€. Although the traditional car rental companies set up earlier have started to change, some new car rental models are basically “losing money and earning moneyâ€. Zhang Junyi said that Zhang Ruiping, who has an IT background, has always attached great importance to operational efficiency. Although both Shenzhou Car Rental and one rental car are heavy asset companies, they are also constantly transforming and developing new businesses, such as used car disposal and new vehicle fleets. In the process of adding electric vehicles, the first step in this process is to ensure stability. In less than a month, the two giants of the traditional car rental industry have completed and announced plans for listing. The recognition of the capital market may also indicate that the development of the Chinese car rental market has passed a period of barbarous growth and ushered in a preliminarily mature stage of competition. Zhang Junyi told the Economic Observer reporter that China's car rental industry has passed its initial stage. Although there will be operating losses and relatively low profits in the short term, it will change with the expansion of scale and operational efficiency. After all, it has experienced so many years of development. , as the top three companies in the industry also summed up some experience. “The car rental market is very large, and companies can walk out of the road of differentiation,†he said.
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