Benzinga | Aug 26, 2021 07:09AM EDT

Kaixin Auto Holdings Signed Binding Term Sheet to Acquire EV Manufacturer, Henan Yujie Times Automobile Co.; No Terms Disclosed

Kaixin Auto Holdings ("Kaixin" or the "Company") (NASDAQ:KXIN) today announced that the Company has reached a binding term sheet to acquire 100% equity of Henan Yujie Times Automobile Co., Ltd. ("Yujie") through new share issuance. Yujie is a leading Chinese electronic vehicles ("EV") manufacturer specialized in small size multi-function EVs. The contemplated deal would be the first major M&A transaction following the establishment of Kaixin's New Energy Vehicle Unit. It marks Kaixin's official entry into China's small size EV market, which is forecasted to reach a 10 million vehicles scale over the next 5 years according to Yujie.



Established in 2017, Yujie's smart factory in Mengzhou, Henan has an annual production capacity of 150,000 vehicles and achieved a substantial production cost advantage to peers according to Yujie. Yujie promotes three models of small size EVs under the POCCO brand, namely "DuoDuo", "MeiMei" and "LaLa", with "DuoDuo" and "MeiMei" already in commercial production stage. According to Yujie, the three models tap into its innovative core technologies in small size EVs to achieve multi-function and large usage space. Yujie's in-house developed vehicle control system and core algorithm provide it with competitive advantages in power consumption, mileage, and new energy points. In addition, its self-developed standardized battery pack can be conveniently replaced within 3 minutes.

Yujie follows a product strategy that focuses on multi-functional small size EVs, and aims to enhance competitive position through increased sales volume, cost savings, and platform development and application. Small size EV is a popular vehicle category driven by China's unique market conditions. Its economy, safety, and convenience features have been greatly stimulating China's EV market and industrial chain.

The signing of term sheet represents a major breakthrough for Kaixin to enter the EV field, and constitutes a step toward the vision of establishing its own EV eco-system and becoming a leading Chinese EV manufacturer. The Company will negotiate further details of an acquisition agreement with Yujie consistent with the term sheet, and make timely disclosure of progress.