Short hit pollutes China’s second-hand car lot

Uxin

17/04/2019 10:16

(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.)
    By Alec Macfarlane
    HONG KONG, April 17 (Reuters Breakingviews) - Uxin’s stock
lost a third of its value after a research firm accused the
newly U.S.-listed auto outfit of fudging numbers. True or not,
fumes around an industry backed by Tencent and big buyout names
are becoming noxious. It’s reason to steer clear of rivals
waiting to go public.
    Full view will be published shortly.
    On Twitter https://twitter.com/AlecMac11

    CONTEXT NEWS
    - Shares in Uxin closed more than a third lower on April 16
after China-focused research firm J Capital accused the
Beijing-based online used-car marketplace of overstating
transactions and not reporting all of its debt.
    - The U.S.-listed company exaggerates the volume of vehicle
sales it processes by as much as 40 percent, J Capital said in a
report released on the same day. It added that financial
statements for Uxin’s operating companies in China show a
“staggering” level of undisclosed debt that puts it at risk of
collapse. The research outfit also accused Uxin founder Dai Kun
of siphoning roughly $280 million from the company.
    - “Uxin believes that the allegations in the report are
completely without merit, and strongly condemns the publishing
of false and misleading information,” Uxin said in a statement
on April 16. 
    - Uxin shares closed at $1.95 each on April 16. The
company’s shares are trading 78.3 percent below their June 2018
initial public offering price of $9 a share.   
    - For previous columns by the author, Reuters customers can
click on  MAC/ 
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J Capital Research: Uxin short report      https://www.jcapitalresearch.com/uploads/2/0/0/3/20032477/2019_04_16_uxin.pdf
BREAKINGVIEWS - Chinese used-car sale fails timing test   
 urn:newsml:reuters.com:*:nL4N1TU1CF
BREAKINGVIEWS - Best to kick the tires on Chinese used-auto apps
    urn:newsml:reuters.com:*:nL3N1SU1KV
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 (Editing by Una Galani and Katrina Hamlin)
 ((alec.macfarlane@thomsonreuters.com; Reuters Messaging:
alec.macfarlane.thomsonreuters.com@reuters.net))