CAR Inc. Company Presentation August 15 th 2017
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation materials, you agree to be bound by the following limitations: The information that follows is a presentation of certain information of CAR Inc. (the “Company”) prepared by the Company as of August 2017. The information contained herein (including, among others, the market data, industry data and other industry statistics included in this presentation derived from public or third party sources) has not been independently verified and thus no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information, or opinions contained herein. Neither the Company nor any of its respective directors, officers, employees, advisors, affiliates or agents shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. In addition, no person is authorized to give any information or to make any representation not contained in and not consistent with this material and, if given or made, such information or representation must not be relied upon as having been authorized by or on behalf of the Company. In this presentation, we refer to EBITDA, Adjusted EBITDA and other measures which are not standard financial measures under IFRS. Such measures may not be comparable to similarly titled measures presented by other companies. See the relevant footnotes contained in this presentation for the definition and calculation of such financial measures. This presentation is based on the economic, regulatory, market and other conditions as in effect on the date hereof. It should be understood that subsequent developments may affect the information contained in this presentation, which neither the Company nor its advisors or representatives are under an obligation to update, revise or affirm, and past performance is not indicative of future results. The information communicated in this presentation contains certain statements that are or may be forward looking. These statements typically contain words such as "will", "expects" and "anticipates" and words of similar import. By their nature forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Any investment in securities issued by the Company will also involve certain risks. There may be additional material risks that are currently not considered to be material or of which the Company and its advisors or representatives are unaware. Against the background of these uncertainties, readers should not rely on these forward-looking statements. The Company assumes no responsibility to update forward-looking statements or to adapt them to future events or developments. This presentation and the information contained herein do not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities of the Company. The securities of the Company have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered, sold or delivered within the United States or to U.S. persons absent from registration under or an applicable exemption from the registration requirements of the United States securities laws. No securities may be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Any public offering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer and its management and financial statements. No public offering of securities is to be made by the Company in the United States. This presentation and the information contained herein is being furnished to you solely for your information on a confidential basis and may not be reproduced or redistributed to any other person, in whole or in part. In particular, neither the information contained in this presentation nor any copy hereof may be, directly or indirectly, taken or transmitted into or distributed in the United States, Canada, Australia, Japan, Hong Kong or any other jurisdiction which prohibits the same except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of U.S. or other national securities laws. No money, securities or other consideration is being solicited, and, if sent in response to this presentation or the information contained herein, will not be accepted. BY REVIEWING THIS PRESENTATION, YOU ARE DEEMED TO HAVE REPRESENTED AND AGREED THAT YOU AND ANY CLIENTS YOU REPRESENT ARE EITHER (A) A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF REGULATION 144A UNDER THE SECURITIES ACT), OR (B) NOT A U.S. PERSON AND ARE OUTSIDE OF THE UNITED STATES AND NOT ACTING FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT). YOU ARE ALSO DEEMED TO HAVE REPRESENTED AND AGREED THAT YOU AND ANY CUSTOMER YOU REPRESENT ARE PROFESSIONAL INVESTORS AS DEFINED IN THE SECURITIES AND FUTURES ORDINANCE (CAP 571 LAWS OF HONG KONG) AND ANY RULES MADE UNDER THAT ORDINANCE. 1
Our vision: China’s leading auto mobility provider Infant stage with huge growth potential Market Life-style driven, not only travel demand Demand Dominant leader = High margin Competition Significant entry barriers Landscape O2O and mobile Asset-light network strategy Innovations Strategic collaboration with UCAR We are more than a car rental company 2
I. Industry Overview
World’s fastest growing region for car rental Penetration rate of car rental (1) Car rental sales growth 2013-2018E CAGR (2) 0.4% 27% 1.3% 13% 1.4% 6% 2% 1.6% 2% 2.5% Source: Roland Berger Notes: (1) Defined as the number of rental vehicles as a percentage of the total number of registered passenger vehicles in 2012 4 (2) Represents growth in the car rental market size, based on rental revenues CAGR’s on local currency basis
Key growth drivers 1 2 3 Typical rental market evolution Licensed drivers without cars PRC regulatory reforms Car rental (1) market size (2013) Gap: 160M > 4,000,000 Gap: 133M government-owned cars 310M ~$0.9 bn Limit number and models of 217M cars that may be purchased by 150M government agencies and encourage car rental ~$24.0 bn 84M Official guidance (July 2014) 2016 2013 stipulates that no further Business travel government-owned cars will be No. of driver’s license holders provided for use in regular Leisure travel government affairs or to officials No. of passenger vehicles Replacement car below a certain rank Source: Roland Berger (1) The Company has reclassified the rental revenue and operating fleet to better align with its new development in business natures 5
Significant entry barriers Challenging for new entrants to acquire new Vehicle purchasing licenses restrictions Requires “ deep pockets ” Difficult access to debt financing Difficult, costly and time-consuming to Scale, network and replicate brand 6
II. Investment Highlights
Investment highlights 1 Clear and sustainable market leadership 2 Most trusted brand supported by superior customer experience 3 Industry-leading proprietary technology platform 4 Diversified and stable business 5 Strong and sustainable profitability profile 6 Experienced management team and strong partners 8
Clear market leader 1 Rental revenue Adj. EBITDA Fleet size RMB in millions RMB in millions Vehicles (2016) (2016) (2016) #1 #1 #1 3,057 5,016 96,449 56,916 #2 940 #2 #2 1,664 ~ 3 x ~ 2 x ~ 3 x Larger Larger Larger Source: Public filings 9
Consistently extending leading position 1 +11.4% 31.2% 19.8% +0.5% -0.8% +0.4% 8.2% 7.7% -0.3% 2.7% 1.9% 1.9% <1.5% 1.5% 1.2% eHi Topone Reocar Avis Market share (by revenue) of top 5 car rental (1) companies in China 2013 2011 % Change Source: Roland Berger (1) The Company has reclassified the rental revenue and operating fleet to better align with its new development in business natures 10
Our clear market leadership provides 1 unique competitive advantages 1 Procurement One of the largest passenger vehicle Cost purchasers in China advantages Operational leverage Economy of scale Reinforces our … market leadership 2 Secured licenses to accommodate future provides… growth License cost advantages ~13,000 in Beijing (1) advantages ~8,000 in Guangzhou (1) and creates… barriers to entry 3 Access to diversified debt funding channels including credit facilities Funding Bank, OEM financing, capital leasing advantages Access to global capital markets Note: (1) As of Jun. 30, 2014 11
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