(Yicai Global) March 25 -- Uxin's shares surged in New York yesterday after the owner of one of China's largest online used car marketplaces said it will sell its business-to-business platform to classifieds publisher 58.Com for USD105 million.
Uxin's stock price [NASDAQ: UXIN] jumped 13.8 percent to USD1.36 with a USD344 million market cap. The benchmark Nasdaq Composite Index was up 8.1 percent.
The enhanced cash flow from the sale of Youxinpai will improve Uxin's long-term outlook, while it will focus on boosting its customer-facing Quanguogou platform's user experience, Dai Kun, founder and chief executive of the Beijing-based firm, said in a statement yesterday.
China's second-hand car sales have been hit by a double whammy as overall passenger vehicle sales had already entered a downturn in 2018 and this year's Covid-19 outbreak has extinguished hopes of a fast recovery. Used car sales fell 13 percent to 13 million units last year.
Early this month, Uxin said that it would suspend operations for the foreseeable future to wait out the novel coronavirus epidemic while employees will receive a minimum living wage as dictated by regional guidelines. Before that, it had already cut staff pay.
58.Com, whose core strategy includes selling cars to dealers, will further enhance Youxinpai's service capacity, Chief Executive Yao Jinbo told Yicai Global. The Beijing-based firm's shares [NYSE: WUBA] climbed 4.6 percent to USD49.22 yesterday.
The listings giant invested USD100 million in Uxin's convertible bonds last May while gaining the right of appointing one board director. After that, the target firm's car loan business merged with the investor's fintech platform Golden Pacer.
Editor: Emmi Laine