On 22 July 2016, Shenzhou Youche Company Limited (“UCAR” or the “Company”, stock code: 838006.OC), a China-based chauffeured car rental company backed by L.R. Capital Group, was successful listed on National Equities Exchange and Quotations (“NEEQ”, also known as the “ New Third Board”). Senior management team of L.R. Capital Group including Chief Executive Officer Mr. Raymond Yung, Managing Director and Head of Greater China Region Mr. Howard Cong were invited to attend the grand listing celebration ceremony held in Beijing on 23 July 2016.
As China’s first-ever listed chauffeured car rental company, UCAR’s listing was well received by the market, with its share price closed at RMB 55.26, or 13% above the debut price on its first trading day. With its market capitalization reaching over RMB 41.8bn, UCAR has become the largest one among NEEQ-listed companies. Although NEEQ has relatively lower liquidity and market capitalisation, UCAR’s trading volume is very active and is comparable to main board companies. Moreover, this remarkable achievement is made only 1 year and 7 months since the Company launched its chauffeured car business.
“The successful listing of UCAR relied not only on the solid execution abilities of our experienced team, but also the great support from our investors. The internet technology revolution and the automotive technology revolution are deeply changing customers’ consumption habits, bringing disruptive changes to the travel industry and automotive ecosystem. Our next step is developing a whole-life-cycle service including automobile financing, insurance and repair and second-hand car sales”, says Mr. Zhengyao Lu, Chairman of UCAR.
Apart from the investment of L.R. Capital, UCAR has attracted a number of well-known strategic investors including Warburg Pincus, the largest private equity firm in the U.S.; Legend Capital, a professional venture capital platform of Legend Holdings Corporation; Yunfeng Capital, a leading private equity firm founded by Mr. Jack Ma, Chairman of Alibaba Group; and GF Securities, China’s largest non-state-owned securities company. In April 2016, UCAR signed a strategic cooperation agreement with Alibaba Group and established strategic partnership thereafter. The two parties will form a comprehensive partnership in the field of “Internet + Cars”, aiming to reshape the industry chain and ecosystem.
In the listing ceremony, Mr. Raymond Yung, Chief Executive Officer of L.R. Capital congratulated Mr. Zhengyao Lu on the successful debut of UCAR. Mr. Yung stated that, as a global multi-family office, L.R. Capital is devoted to acting as a linkage for capital and resources by connecting China and the international capital markets, with technology investment as one of the major focuses. Mr. Yung continued and said that going forward, L.R. Capital will continue to support UCAR’s innovation and business development, and look forward to creating long term investment value.
Since its establishment, UCAR has been focusing on travel and automobile industry chain, and mainly engages in four business segments including Shenzhou Zuche, UCAR, Shenzhou Maimaiche and Shenzhou Car bank. UCAR is a leading brand in China internet industry and is one of the largest chauffeured car service providers in China, covering 60 cities nationwide. All vehicles from UCAR are either self-owned or from third party leasing companies. All drivers are hired and trained by third party service companies, which is based on stronger control over the employment relationship. By leveraging its innovative B2C development pattern, UCAR has grown with strong momentum. “Chinese car market analysis report” from Roland Berger pointed out that, among all domestic network platform operators in the current car rental market, UCAR has the lowest policy and regulatory risk due to its fully self-operating car fleet. Also, the market share, growth rate and customer retention rate of UCAR are all ranked on the top level.
The ongoing digital transformation of strategic industries and the increasing penetration of smartphones are important factors leading to a disruptive change in consumer behavior and offering great investment potential in online-to-offline market applications. In recent years, the “Internet +” concept has become a major industrial development trend and has deeply affected and transformed the traditional economy. L.R. Capital has continuously emphasized the importance of industrial innovation, and increased its investment in sectors related to the “New Economy”. Some of these investments include Dianrong.com, a major Fintech player in China; Youche.com, a major online-to-offline trading platform for used vehicles in China, as well as Credible.com, a leading internet financing company in the US.