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InvestmentsPing An seeks to sell $2.1 billion stake in Autohome -sources By...

Ping An seeks to sell $2.1 billion stake in Autohome -sources By Reuters


© Reuters. FILE PHOTO: The firm emblem of Ping An Insurance is seen in Beijing, China, Aug. 27, 2020. REUTERS/Thomas Peter

By Julie Zhu and Kane Wu

HONG KONG (Reuters) – Financial conglomerate Ping An Insurance Group of China is searching for to offload its 44% stake in auto companies portal Autohome, three folks accustomed to the scenario informed Reuters.

Ping An, which is at present the largest shareholder of Beijing-based Autohome by way of an offshore entity, has held talks with a number of strategic and personal fairness buyers for the stake in current months, stated the folks.

The stake could be value round $2.15 billion primarily based on Authome’s present valuation.

Autohome faces rising difficulties in China the place automakers, in explicit electrical automobile (EV) makers, more and more depend on their very own distribution networks as a substitute of dealerships for gross sales, stated two of the folks.

That has affected the enterprise of many sellers in the world’s greatest auto market after which compelled them to lower budgets for on-line portals like Autohome, stated the folks.

Founded in 2005, Autohome primarily serves as an info portal for vehicle patrons and an internet car-trading market in China.

Advertisements and costs from automakers and sellers typically account for greater than 80% of its income as they use its platform for companies together with model and gross sales promotions.

Ping An, China’s largest insurer by market worth, declined to touch upon “market rumours”. Autohome, which is listed in each New York and Hong Kong, didn’t instantly reply to a request for remark.

Autohome’s U.S.-listed inventory was down greater than 70% Thursday from this 12 months’s peak of $147.7 in January. It went public in Hong Kong in March with lukewarm curiosity and its share value has fallen greater than 60% from a peak of HK$199.60 in March.

Australian telecom big Telstra (OTC:) offered its 47.4% stake in Autohome to Ping An in 2016 for $1.6 billion, saying Autohome would profit from the Ping An’s experience in automotive insurance coverage and financing because it moved away from being purely on-line and commenced offline gross sales in China.

Ping An’s insurance coverage enterprise and funding returns have been hit by weak spot in China’s economic system, which posted its slowest development in a 12 months in the third quarter as energy shortages and property sector worries took a toll.

The insurer reported a 31.2% fall in third-quarter web revenue due to decrease premium earnings and losses on funding belongings.

Ping An had reached out to Tencent Holdings (OTC:) for the stake sale, stated two of the sources. The web and gaming big owns Bitauto, an internet platform comparable to Autohome.

However, Tencent didn’t deem the deal viable due to antitrust considerations, stated one in every of them.

Tencent didn’t instantly reply to a request for remark.

Autohome reported $300 million of web income and $116 million of web earnings for the second quarter this 12 months, down 16% and 9% respectively year-on-year.

It has 64 million month-to-month energetic customers on its cell phone app and 45 million every day energetic customers on its internet portal, in accordance to its web site.

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