Senmiao Technology Stock

Senmiao Technology Limited provides automobile transaction and related services, connecting auto dealers, financial institutions, and consumers, who are ride-hailing drivers affiliated with different operators of online ride-hailing platforms in the People’s Republic of China (PRC or China, excluding, Hong Kong, Macau and Taiwan).

The company provides automobile transaction and related services focusing on the online ride-hailing industry in the PRC through its wholly owned subsidiaries, Yicheng Financial Leasing Co., Ltd. (Yicheng); Chengdu Corenel Technology Limited (Corenel); and its majority owned subsidiary, Hunan Ruixi Financial Leasing Co., Ltd. (Hunan Ruixi), its wholly owned subsidiary, Hunan Ruixi Automobile Leasing Co., Ltd., (Ruixi Leasing), and its variable interest entity (VIE), Sichuan Jinkailong Automobile Leasing Co., Ltd., (Jinkailong).

The company has been operating an online ride-hailing platform through Hunan Xixingtianxia Technology Co., Ltd. (XXTX), which is a majority owned subsidiary of Sichuan Senmiao Zecheng Business Consulting Co., Ltd., a PRC limited liability company and wholly-owned subsidiary of the company (Senmiao Consulting).

Services

Automobile Transaction and Related Services

The company’s Automobile Transaction and Related Services are mainly consisted of the automobile operating lease where the company provides car rental services to individual customers to meet their personal needs with lease term no more than twelve months (the auto leasing); automobile sales where the company procures new cars from dealerships and sells them to its customers in the automobile financing facilitation business (the ‘auto sales’); facilitation of automobile transaction and financing where the company connects the prospective ride-hailing drivers to financial institutions to buy, or get financing on the purchase of, cars to be used to provide ride-hailing services (the ‘auto financing and transaction facilitation’); and automobile financing where the company provides its customers with auto finance solutions through financing leases (the auto financing).

The company’s ride hailing platform enables qualified ride-hailing drivers to provide application based transportation services in China. XXTX holds a national online reservation taxi operating license and operates its platform by collaborating with two well-known aggregation platforms in China. The platform is presently servicing ride-hailing drivers in Chengdu City, Neijiang City, Nanchong City and Panzhihua City in Sichuan Province, Changsha City in Hunan Province, and Guangzhou City in Guangdong Province, China, providing them a platform to view and take customer orders for rides. The company earns commissions for each completed order as the difference between an upfront quoted fare and the amount earned by a driver based on actual time and distance for the ride charged to the rider (the ‘Online Ride-hailing Platform Services’).

Automobile Transaction and Related Services

Auto Operating Leasing

The company leases its own automobiles or sublease automobiles from certain online ride-hailing drivers it served before to other individuals, including new online ride-hailing drivers. With the authorization from online ride-hailing drivers who exited the online ride-hailing business, the company subleases their automobiles to new online ride-hailing drivers for a lease term no more than twelve months. Due to the intense competition and the COVID-19 pandemic, as of March 31, 2021, approximately 1,289 online ride-hailing drivers (primarily in Chengdu City) have exited the online ride-hailing business. The company is authorized to sublease or sell these drivers’ automobiles in order to offset the repayments those drivers owed to it and the financial institutions. The company sub-leased over 1,100 automobiles from these ride-hailing drivers and approximately 80 of its own automobiles.

Auto Financial Leasing

The company began offering auto financing services in 2019. In its self-operated financing, the company acts as a lessor and a customer (i.e., online ride-hailing driver) acts as a lessee. The company offers to the lessee a selection of automobiles that were purchased by in in advance.

Auto Sales

The company is also engaged in the sale of automobiles through Hunan Ruixi and Yicheng. As it is targeting to sell cars to online ride-hailing drivers, Hunan Ruixi and Yicheng procure new cars of model and specification acceptable to online ride-hailing industry in Chengdu and Changsha. The company has shifted its business focus to automobile leasing so the sales of automobiles has significantly decreased in the year ended March 31, 2021.

Auto Financing and Transaction Facilitation

The company facilitates the auto financing transactions between the online ride-hailing drivers and financial institutions. As of March 31, 2021, over 95% of the customers it service are online ride-hailing drivers. The company’s services simplify the transaction process for both these drivers and the financial institutions. Primarily, its facilitation services include purchase services and management and guarantee services for new automobile transactions.

The company’s purchase services cover a range of services provided to online ride-hailing drivers during the process of an automobile financing transaction, including but not limited to credit assessment, preparation of financing application materials, assistance with closing of financing transactions, license and plate registration, payment of taxes and fees, purchase of insurance, installment of GPS devices, ride-hailing driver qualification, and other administrative procedures.

The company’s management and guarantee services are provided to online ride-hailing drivers after the delivery of automobiles, covering management services, including, without limitation, ride-hailing driver training, assisting with purchase of insurances, insurance claims and after-sale automobile services, handling traffic violations and other consulting services; and guarantee services for the obligations of online ride-hailing drivers under their financing arrangement with financial institutions.

The company has established collaborations with various financial institutions in China, including commercial banks, financial leasing companies, as well as online peer-to-peer lending platforms, which finance the purchase of automobiles by its automobile purchasers through the Financing Agreements.

Auto Transaction Facilitation Services

Through Hunan Ruixi and Jinkailong, the company also facilitates automobile purchase transactions between dealers, its cooperative third party sales teams and the automobile purchasers, primarily online ride-hailing drivers. It provides sales venue and vehicle sourcing for the transactions. The company charges third party sales teams and automobile purchasers a facilitation fee based on the type of vehicle and negotiation with each dealer, third party sales team and purchaser.

The company also provides a series of services for the purchasers throughout the automobile purchase transaction process, including registration of license plates and permits from the relevant government authorities, insurance facilitation and assistance with applications to financial institutions to finance the purchase. Its service fees are based on the sales price of the automobiles and relevant services provided. As of March 31, 2021, the company provided facilitation services for an aggregate of 1,687 automobiles. During the year ended March 31, 2021, it provided facilitation services for 61 automobiles.

Online Ride-hailing Platform Services

In October 2020, the company began operating its own online ride-hailing platform in Chengdu. The platform (called Xixingtianxia) was owned and operated by XXTX. As the March 31, 2021, the platform is presently servicing online ride-hailing drivers in Chengdu, Changsha, Neijiang, Guangzhou, Nanchong and Panzhihua, China, providing them a platform to view and take customer orders for rides.

The company collaborates with two major aggregation platforms in China, Gaode Map, a map application owned and operated by AutoNavi Software, Co., Ltd.; and Meituan, an e-commerce platform for services. The company earns commissions for each completed order as the difference between an upfront quoted fare and the amount earned by a driver based on actual time and distance for the ride charged to the rider. It settles the company’s commissions with the aggregation platforms on a weekly basis.

Since October 2020, the acquisition date, to March 31, 2021, the company has expanded marketing of its online ride-hailing platform to a larger pool of potential drivers and riders in Chengdu, Changsha, Neijiang and Guangzhou through cooperation with certain local car rental companies and through offering attractive incentives and awards to drivers.

Customers

Majority of the company’s customers are online ride-hailing drivers. Its automobile leasees typically lease automobiles which meet the criteria of cars used for online ride-hailing for their own business in the industry. The company’s automobile purchasers typically become affiliated with it through affiliation agreements pursuant to which the company, as a qualified management company, provide them post-transaction management services during the affiliation period, which is usually the same as the term of the Financing Agreements. Its platform users typically use the company’s online ride-hailing platform to view and take customer orders for rides.

The company acquires customers through the network of third-party sales teams, cooperated lease companies and its own efforts, including online advertising and billboard advertising. The company also sends out fliers and participate in trade shows to advertise its services. During the year ended March 31, 2021, the company had serviced over 2,500 customers for its Automobile Transaction and Related Services.

Post-Financing Services

The company’s post financing management department is in charge of monitoring and managing monthly payments by the purchaser/leasee. The company sends text messages and makes phone calls as reminders three business days prior to the due date.

Intellectual Property

The company owns 16 software copyrights and 38 trademarks. It has 20 trademark applications pending at the PRC Trademark Office. The company has also registered various domain names, including www.51ruixi.com, www.jklqc.com, www.senmiaotech.com and http://senmiaotechir.com/.

Competition

The company faces competition primarily from companies that operate in Chengdu City, such as Chengdu Jingtengjian Business Consulting Co., Ltd.; FAW Huidi Automotive Technology Co., Ltd.; and Jingming Automobile Leasing Co., Ltd.

The company faces competition primarily from companies that operate in Changsha City, such as Caocao, Jishiyongche and Xiehua Chuxing.

History

Senmiao Technology Limited was founded in 2014. The company was incorporated in the state of Nevada in 2017.