Sign Up

Cash Infusion And Superstore Growth Potential To Catalyze This Stock

The company said it closed a deal first announced last September to sell new stock to shared ride operator Dida for $7.5 million

Key Takeaways:

Uxin has received $7.5 million in funding from Dida, following a similar $27 million cash infusion from longtime investor Nio last month

The company reported strong growth for its two used car superstores in the third quarter, and announced plans to add new stores in the cities of Wuhan and Zhengzhou

China's car market is hardly a place for risk averse investors these days, with a slowing economy and overcapacity driving many brands and dealers into the red. But one potential bright spot could be the used car segment, which is showing signs of benefiting as buyers who previously would only consider new products opt for used cars instead.

That factor is helping to juice up sales for Uxin Ltd. (UXIN.US), which is developing a used car superstore model similar to that used by U.S. giant Carmax (KMX.US). The only problem is that time is working against Uxin, which is perpetually running low on cash as it races to build out its superstore network to the point where it can operate profitably.

Uxin just received a small lifeline in that regard this week with the closing of a new cash infusion from Dida (2559.HK), one of China's smaller shared ride operators. The funding isn't huge, with Dida agreeing to provide $7.5 million by subscribing to new Uxin shares. But that amount, equal to around 55 million yuan, is nearly double the meager 29 million yuan in cash Uxin had in its coffers at the end of last September.

Uxin also said last month that it had closed another deal announced a year earlier to receive a fresh $28 million, also via a sale of new shares, from longtime investor Nio (NIO.US; 9866.HK), one of China's top new energy vehicle (NEV) startups. Nio has been one of Uxin's oldest supporters, and its latest investment should ...

https://www.benzinga.com/news/earnings/25/04/44764716/cash-infusion-and-superstore-growth-potential-to-catalyze-this-stock