On April 2, Luckin Coffee took the initiative to disclose the financial fraud in Q2-Q4 of 219, involving an amount of 2.2 billion yuan, and the intraday trading fell by 8% that day; On April 3rd, CAR Inc.'s share price fell by 54.4%, and UCAR in China fell by 2%. So what is the inevitable connection between two seemingly different industries?
The inextricable connection between the two began with Lu Zhengyao, a legendary figure known as the "capital lion". He is not only the major shareholder of Luckin Coffee holding 23.94%, but also the founder of CAR Inc. holding 29.76%. In 218, he took over Baowo Automobile from "old classmate" Wang Baiyin. In fact, Lu Zhengyao is the head of the "coffee+automobile" industry. Why is Lu Zhengyao called "Capital Lion"? Lu Zhengyao, a former civil servant, devoted himself to the capital world with the upsurge of going to sea after 1992. When they are not satisfied with the position of "IT industry middleman", they begin to seek new business opportunities. In 25, when an accident broke down in the United States, the rescue of AAA, an American auto club, showed him new business opportunities, including diversified AAA, such as auto service providers, rescue agencies and financial communications, which enabled Lu Zhengyao to quickly integrate his ideas and move the business model of AAA to his own "domestic UAA". Subsequently, UAA gradually exploded, attracting the favor of Liu Erhai, a senior investment of Lenovo, and bringing 8 million dollars to Lu Zhengyao. At the same time, Lu Zhengyao began to burn money on publicity and user welfare, so that UAA had 2 million members, 38 million yuan in revenue and 4 million yuan in profit two years later. Staged success did not satisfy Lu Zhengyao, and he began to seek a more stable business model.
At that time, the car rental market was gradually improving, and Lu Zhengyao saw business opportunities again because of the non-essential taxi license, perfect credit system in China and simplified car rental procedures. In 27, Lu Zhengyao set up CAR Inc. with all his capital by integrating the resources of UAA. We have successively obtained an investment of $3 million from Angel Wheel; Legend Holdings invested 1.2 billion yuan; Huaping invested 2 million US dollars. After being rich, Lu Zhengyao spent a lot of money on buying new cars, distributing user benefits and publicity, which increased the rental rate in CAR Inc. to 65%, and the number of business outlets and operating vehicles increased one after another. In September 214, he listed CAR Inc. on the Hong Kong stock market. Since then, the Shenzhou special car has been established, which raised 8 million US dollars between July and September 215 to compete for the special car market. This is not all. In January 216, the Shenzhou UCAR was established and listed on the New Third Board in July, with a market value of 41.7 billion yuan, and the three major businesses in China were established.
Lu zhengyao summed up his entrepreneurial experience: "seize the opportunity, set up a company, expand financing, and start an IPO quickly". From the UAA business model to the "three major businesses in China", Lu Zhengyao achieved rapid layout, attracting financing became his specialty, and once capital sprouted, he immediately attracted the attention of venture capitalists. The overall process of realizing IPO was amazing.
his technique emphasizes "stability and accuracy". Malicious ",pouncing on the" prey ",using crazy means of burning money to promote the listing of the industry. Since June 215, Lu Zhengyao has sold 42% of CAR Inc.'s shares by means of pledge and benefit transfer, realizing cash-out of 1.6 billion yuan, and then realized cash-out by using it in the Shenzhou excellent car of the New Third Board. In fact, it is equivalent to cutting" the leeks of capitalists "and" the leeks of retail investors ". This way of quick financing and quick cashing has also made Lu Zhengyao a "capital lion". It's not a "car market" but a capital game! When the market speculates on how Lu Zhengyao can make the "three major businesses in China" bigger and stronger and seize market share. In October 217, Lu Zhengyao promoted the opening of the first Ruixing Coffee, and Qian Zhiya, the founder of Luckin Coffee, was the former COO of UCAR. She said, "Mr. Lu is very supportive of my entrepreneurship and gives us investment support"! This leaves the market to guess, what exactly does Lu Zhengyao want to play?
under the impetus of Lu zhengyao, Luckin Coffee, like an "alternative car system in China", burned money wildly to raise funds and quickly realized IPO. Luckin Coffee used the same business model as the previous UAA and Shenzhou Car Series, that is, "profit-making activities", and the discount coupons ranging from 5% to 1.8% quickly won the favor of the market and accumulated a large number of consumer customers. By December 219, Luckin Coffee had 4,91 stores in China, 6 more than Starbucks, and the customer base reached 3.7 million. That's not the point. With Lu Zhengyao's "capital lion theory", Luckin Coffee should quickly connect with the capital market to obtain more funds. From 217 to 219, Luckin Coffee * * * made 13 financing, and it took 18 months to realize "package listing"! In May 219, Nasdaq went public with an issue price of US$ 17. According to the financial report at that time, Luckin Coffee's revenue in the third quarter was 1,541.6 million yuan, a year-on-year increase of 54.2%. At the end of 219, Luckin Coffee's share price reached $35.5, and its market value reached $8.532 billion.
From the "automobile market game" and "coffee market game", it is objectively shown that what Lu Zhengyao really plays is neither the automobile market nor the service industry. He wants to get a quick way to realize cash, but he always uses the traditional capital game. In contrast, "coffee" and "China business" are more like a "gimmick" for him to realize financing! The price of capital is painful and happy!
however, the capital market is like a double-edged sword, which can accumulate capital quickly and bear unpredictable risks at the same time. Even before Luckin Coffee's share price was blown, China's business and Luckin Coffee were already scarred. The 219 annual report released by CAR Inc. recently showed that the total revenue was 7.691 billion yuan, a year-on-year increase of 19.35%; The net profit was 31 million yuan, down 89.3%, and the market value of CAR Inc. has evaporated by 82% since its listing in 215; Luckin Coffee's experience is more "face-slapping". In February, Muddy Water Research released an 89-page report on Luckin Coffee, which mentioned that in 219, the single-day sales in Q3 and Q4 in Luckin Coffee were exaggerated by at least 69%, and the unit price was exaggerated by 12.3%. Then the chain reaction caused Luckin Coffee's share price to drop by over 2%. Luckin Coffee replied that "there is no conclusive basis, and at the same time, appropriate measures should be taken to defend against malicious accusations". It happened that on April 2, Luckin Coffee released false information, which seemed to be beyond the scope of paper.
I think it's acceptable that the profits and market value of the enterprises are reduced simply. What's more serious is that from the perspective of American securities law, we will face the risk of delisting, and we will also be fined tens of billions of dollars, and the main responsible person may also have criminal responsibility.
Therefore, it is a severe test for "Shenzhou Car System" and "Luckin Coffee". When the capital bubble burst, Baowo Automobile was shot in China and Ruixing collapsed. What happened to Baowo Automobile? Remember the elevator advertisement "Baowo car, good and expensive!" Really? This is a stage of Lu Zhengyao's "capital operation"-burning money for publicity! Ruixing is the driving force behind it. In addition, Luckin Coffee also launched the activity of "drinking coffee to win the right to use Baowo BX5". At the same time, it is reported that Baowo Automobile owns the resources of China Department, and shares some resources with Ruixing, and is ready to go public. Of course, financing is needed before listing, maybe an entity is needed, or an idea is needed. Baowo Automobile launched the "Shenzhou Baowo New Retail Platform", which will lighten the sales channels of new cars and increase sales. However, the impact is that the new retail and Beiqi Foton dealers have conflicts and the terminal price cannot be unified, so the market laughed at that time that "good and expensive are generated between the new retail and the terminal".
as expected, ucar's revenue in the first half of 219 was 1.919 billion yuan, down 48.92% year-on-year, and its net loss was 652 million yuan, down 55.28% year-on-year. The official reason was the new retail model of Baowo Automobile. Not only that, since the acquisition of Baowo Automobile, its sales volume has been a mystery. In 219, the sales volume was 45,321 vehicles, up 47.3% year-on-year. However, by January and February 22, the cumulative sales volume was less than 2,2 vehicles, down 67.7% year-on-year. Of course, affected by the epidemic, there is no way to verify the specific C-end sales. However, one piece of information shows that in the fourth quarter of 219, CAR Inc. stopped buying new cars. Is it related to the decline in sales of Baowo cars? It is also speculated that the sales volume of Baowo Automobile is suspected of "turning left and right"? Summary: Lu Zhengyao owns the car series in China and Luckin Coffee, and the linkage will have a great development prospect. Furthermore, after the acquisition of Baowo Automobile, it provides new opportunities to master all aspects of traditional automobile manufacturing. In fact, grasping the current resources can lay out the future, but objectively, Lu Zhengyao's focus is not on enterprise development, but on how to realize the capital market with his own "customary means". Eventually, the collapse of Ruixing led to the bursting of the capital bubble. Then how can Lu Zhengyao turn the tide?
This article comes from the author of Chejia, car home, and does not represent car home's standpoint.