Tiger Global Management Takes Big Stake in Ehi Car Services Ltd (ADR) (EHIC) As Chinese Company Preps for Expansion

The new funding is intended to help Ehi Car Services Ltd (ADR) (NYSE:EHIC) expand its fleet to capitalize on the growth in China’s auto-rental industry, which is part and parcel of the government’s policy to limit vehicle purchases. The company plans to expand its fleet, which amounted to 19,746 vehicles at the end of 2014, to between 37,000 and 40,000 by the end of this year. Fiscal revenues for 2015 are expected to be in the range of RMB1.5 billion (US$242.33 million) to RMB1.6 billion (US$258 million), which represent a significant increase from 2014’s revenues of RMB851.2 million (US$137.5 million).

The company held its U.S IPO in November last year and its stock has appreciated by 30.51% since then. Much of this rise came during the second half of last month, close to the time the company announced its first quarter financial results. Total revenues climbed by a hefty 60.7% to about RMB295.50 million (US$47.7 million) on a year-over-year basis. Car rentals formed the major chunk of the top line and also accelerated the most, by 73.7% to RMB226.39 million (US$36.57 million), as compared to a 29% appreciation in revenues from car services to RMB69.12 million (US$11.17 million). As far as Ehi Car Services Ltd (ADR) (NYSE:EHIC)’s bottom line is concerned, the company turned in a profit of RMB3.56 million (US$574,300) as compared to a loss of RMB17.84 million (US$2.88 million) in the previous quarter.

Disclosure: None