Recently, Tuanche.com (Nasdaq:TC) issued an announcement stating that it has received a non-binding preliminary proposal from the company’s chairman and CEO Wen Wei on January 21, 2021, proposing a share of American depositary shares ( ADS) $4.25 in cash to acquire all the company’s issued common stock that Wen Wei does not own.
In other words, Tuanche.com will become a member of the privatization and delisting of China Concept Shares. Stimulated by related news, Tuanche.com's share price on January 21 rose by 11.96% from the previous trading day to $3.9, with a total market value of $78,427,100.
According to public information, Tuanche.com is a group-buying website for cars and auto supplies. Its affiliate is Tuanche Internet Information Service (Beijing) Co., Ltd., established in 2012, and its legal representative is Wen Wei. In November 2018, Tuanche.com was listed on NASDAQ in the United States with an issue price of US$7.8.
It is understood that Tuanche.com issued a total of 4 million ADS shares in the US IPO (each ADS represents 4 Class A ordinary shares). If the underwriters fully exercise the over-allotment option, the issuance volume will be 4.6 million ADS, and the maximum fundraising will be about 35 million US dollars.
As of the close of trading on January 21, 2020, Tuanche.com's share price is only 3.9 US dollars, down 50% from its issue price. This also means that investors in Tuanche.com have lost 50% since its listing. If calculated at the price of US$4.25, it would lose 45.5% in a period of about two years.
Earlier, Wen Wei stated on the Tuanche online market, “The Tuanche is listed, but this is not a sign of success for Tuanche, but just a milestone. We should never regard a milestone goal as a successful goal, but just A small step on the road to success."
Tuanche.com Wen Wei
According to Tuanche.com's 2019 annual report (20-F annual report), as of April 30, 2020, Tuanche.com has issued 321,752,295 ordinary shares. The report shows that its CEO Wen Wei holds a total of 18.0% of the shares and 75.7% of the voting rights; President Sun Jianchen holds 4.4% of the shares, and directors and executives hold 22.9%.
Among institutional shareholders, K2 Evergreen Partners LP holds 12.7%, Best Cars Limited holds 5.7%, Highland Funds holds 9.5%, and Bertelsmann holds 8.9%. Among them, Best Cars Limited reduced its holdings by more than 20 million shares, accounting for more than 5% of the reduction.
It is worth noting that Tuanche has lost money for 7 consecutive quarters after its online market. From the first quarter of 2019 to the third quarter of 2020, its adjusted net losses were 27.3 million yuan, 30.4 million yuan, 37.9 million yuan, 57.8 million yuan, 50.7 million yuan, 32.1 million yuan, and 37 million yuan, respectively. 273 million yuan.
In the most recent quarter (the third quarter of 2020), Tuanche.com’s revenue was 100 million yuan, a decrease of 26.2% from the 135.6 million yuan in the same period in 2019; the net loss attributable to Tuanche.com’s shareholders was 41.2 million yuan. It narrowed by 11.9% year-on-year.
In the third quarter of 2020, Tuanche.com’s net income from auto shows decreased by 33.2% compared with the same period in 2019, that is, from 123.6 million yuan to 82.6 million yuan; the net income from online marketing services and others was 5.9 million compared with the same period in 2019 Yuan increased by 160.9% to 15.4 million yuan.
It is understood that Tuanche.com expects its net income in the fourth quarter of 2020 to be 145 million to 155 million yuan, a year-on-year decrease of approximately 20.7% to 15.2%. Regarding the reasons for the decline, Tuanche.com said that the number of events such as auto shows and promotions is expected to decline.