Renren Inc. (NYSE: RENN) operates a social networking service (SNS) business, used auto business and SaaS business. Renren’s American depositary shares, each of which represents fifteen Class A ordinary shares, trade on NYSE under the symbol “RENN.”
The company’ business and market profile leverage on its widespread presence in internet business (SnS) along with improving market share in used car sales platform. Looking ahead, the company will be serving global, vertical industries with internet and artificial intelligence.
- On January 28, 2019, Kaixin Auto Group (“Kaixin”), a leading premium used car dealership network in China owned by Renren, entered into a convertible loan agreement with Kunlun Tech Limited, a Hong Kong company owned by Beijing Kunlun Tech Co., Ltd., pursuant to which Kunlun has agreed to fund, subject to customary closing conditions, a $23 million convertible loan to Kaixin (the “Loan”), with interest payable at the rate stipulated by the People’s Bank of China. The first tranche of the Loan, in the amount of $20 million, was funded on January 28, 2019, and the remaining $3 million is to be funded on or before January 31, 2020.
- On Nov. 13, 2018, the company announced that Beijing Qianxiang Wangjing Technology Development Co., Ltd., a China-incorporated subsidiary wholly controlled by Renren, has agreed to sell all tangible and intangible assets in www.renren.com and its related business to Beijing Infinities Interactive Media Co., Ltd., for a cash consideration of US$20 million. Also, in consideration and as part of the foregoing asset sale, the Buyer, has agreed to issue to Renren shares of the Buyer Parent with a value of US$40 million based on an agreed-upon estimated valuation of the Buyer Parent at US$700 million.
Management Commentary: Renren is confident that an asset sale is the most viable path to dispose of its Renren SNS business and to set Renren onto its next phase of growth. With the consummation of this transaction, Renren will focus on its used car business in China, and its businesses outside China, notably the Trucker Path business and the SaaS business in the United States. Renren intends to remain listed on the NYSE.
About Kaixin Auto Group:
Founded in 2015 as a venture into China’s used car financing market by its corporate parent Renren Inc., Kaixin Auto Group is a leading premium used car dealership in China. Supported by the rapid growth of China’s used car market and leveraging its own hybrid business model that offers both strong online and offline presence, Kaixin has transformed from a tech-enabled financing platform into a nationwide dealer network that combines self-owned and affiliated dealers as well as value added and after-sale services.
About the company’ Social Networking Platform:
Renren, which means “everyone” in Chinese, enables users to connect and communicate with each other, share photos and access mobile live streaming. The community is highly engaged by university students and young white-collar professionals across the country. The Company’s SNS business started in 2005 under its prior name Xiaonei, which meant “On Campus,” synonymous to its initial roots within Universities.
Product and Services at a glance:
Key highlights of 3rd Quarter:
- Total net revenues for the second quarter of 2018 were US$135.0 million, representing a 582% increase from the corresponding period in 2017, due to the launch of the used auto retail business in the second quarter of 2017.
Used auto sales revenue was US$122.7 million. RENN initiated used auto sales business through one of its subsidiaries in the second quarter of 2017
Internet Value-Added Services (IVAS) and other net revenues were US$12.1 million, an 18.6% increase from the corresponding period in 2017
Financing income was US$0.2 million, a 97.4% decrease from the corresponding period in 2017
- Cost of revenues was US$129.6 million, compared to US$15.1 million from the corresponding period of 2017. The increase was primarily due to the cost of used auto sales.
- Net income attributable to the Company was US$166.1 million, compared to a net loss of US$17.2 million in the corresponding period in 2017. The improvement was primarily due to a US$180.8 million one-off gain recognized resulting from the transaction the Company announced on April 30, 2018.
Dividend declaration: The company declared a cash dividend of $0.6125/share or $9.1875/ADS to shareholders on record of June 14, 2018.
Outlook over the near to medium term: The Company expects to generate revenues in an amount ranging from US$123 million to US$128 million in the third quarter of 2018, representing a 104.3% to 112.6% year-over-year increase. This forecast reflects the Company’s current and preliminary view, which is subject to change.
Key risk factors and potential stock drivers:
- Company’ ability to ramp up operations while improving its capital structure and financial position would continue to remain a key stock sensitivity factor over the medium term.
- Exposure to intense competition leading to constrained profitability
- With ongoing losses, Renren’s remaining cash balance is restricted.
- Company’s ability to maintain its liquidity and financial flexibility to fund its incremental capital requirements.
- On Wednesday, March 6th, 2019, RENN closed at $1.61 (up by +1.91%), on an above average volume of 7.89 million shares exchanging hands. Market capitalization is $111.089 million. The current RSI is 55.62
- In the past 52 weeks, shares of RENN have traded as low as $1.27 and as high as $10.44
- At $1.61, shares of RENN are trading above its 50-day moving average (MA) at $1.57 and above its 200-day moving average (MA) at $1.62
- The present support and resistance levels for the stock are at $0.97 & $2.79 respectively.
Traders News Source is a wholly owned subsidiary of Traders News Source LLC, herein referred to as TNS LLC.
Traders News Source has not been compensated for this report by anyone and the opinions if any are that of the author Vikas Agrawal, CFA. Author’s Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I, wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in the article.
This web site, published by TNS LLC, and is an investment newsletter that is built on the premise of assisting individual investors in learning about investing. Our goal as publishers of financial information is to provide research and analysis of investments to our subscribers. TNS LLC does not give buy or sell recommendations. We do purchase distribution rights from analyst, financial writers and bloggers for a fee that may be licensed to issue price targets and recommendations. Furthermore, we encourage you to speak to a licensed professional prior to making an investment in any type of publicly traded security.
We do sell advertising to other companies including brokerage firms, web sites, publicly traded issuers, investor relations firms, and investment publications, among others. TNS LLC makes no warranty as to the policies of these organizations, and in no way endorses their offers, services, or the content of their advertisements.
When an advertiser is a publicly traded company or a third party acting on behalf of a public company, we fully disclose all compensation in the email advertisement. Such disclosure is included in a disclosure statement in each of the advertisements sent via email.
Our reports/releases are a commercial advertisement and are for general information purposes ONLY. We are engaged in the business of marketing and advertising companies for monetary compensation. Never invest in any stock featured on our site or emails unless you can afford to lose your entire investment. The disclaimer is to be read and fully understood before using our services, joining our site or our email/blog list as well as any social networking platforms we may use.
PLEASE NOTE WELL: TNS LLC and its employees are not a Registered Investment Advisor, Broker Dealer or a member of any association for other research providers in any jurisdiction whatsoever.
Release of Liability: Through use of this website viewing or using you agree to hold TNS LLC, its operator’s owners and employees harmless and to completely release them from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. TNS LLC encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled or is available from public sources and TNS LLC makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. None of the materials or advertisements herein constitute offers or solicitations to purchase or sell securities of the companies profiled herein and any decision to invest in any such company or other financial decisions should not be made based upon the information provide herein. Instead TNS LLC strongly urges you conduct a complete and independent investigation of the respective companies and consideration of all pertinent risks. Readers are advised to review SEC periodic reports: Forms 10-Q, 10K, Form 8-K, insider reports, Forms 3, 4, 5 Schedule 13D.
TNS LLC is compliant with the Can Spam Act of 2003. TNS LLC does not offer such advice or analysis, and TNS LLC further urges you to consult your own independent tax, business, financial and investment advisors. Investing in micro-cap and growth securities is highly speculative and carries an extremely high degree of risk. It is possible that an investor’s investment may be lost or impaired due to the speculative nature of the companies profiled.
The Private Securities Litigation Reform Act of 1995 provides investors a ‘safe harbor’ in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be “forward looking statements”. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as “projects”, “foresee”, “expects”, “will”, “anticipates”, “estimates”, “believes”, “understands”, or that by statements indicating certain actions & quote; “may”, “could”, or “might” occur.
Understand there is no guarantee past performance will be indicative of future results. In preparing this publication, TNS LLC has relied upon information supplied by its customers, publicly available information and press releases which it believes to be reliable; however, such reliability cannot be guaranteed. Investors should not rely on the information contained in this website. Rather, investors should use the information contained in this website as a starting point for doing additional independent research on the featured companies. The advertisements in this website are believed to be reliable, however, TNS LLC and its owners, affiliates, subsidiaries, officers, directors, representatives and agents disclaim any liability as to the completeness or accuracy of the information contained in any advertisement and for any omissions of materials facts from such advertisement. TNS LLC is not responsible for any claims made by the companies advertised herein, nor is TNS LLC responsible for any other promotional firm, its program or its structure.