- The stock price of Jiuzi Holdings, Inc. (NASDAQ: JZXN) increased by over 25% pre-market today. This is why it happened.
The stock price of Jiuzi Holdings, Inc. (NASDAQ: JZXN) – a new energy vehicles franchisor and retailer under the brand name Jiuzi in China – increased by over 25% pre-market today. Investors are responding positively to Jiuzi Holdings announcing that it has entered into a cooperation agreement with Zhejiang Youxing New Energy Co., Ltd., the sole nationwide distributor of Chongqing Ruichi Automobile Industry Co., Ltd. for institutional clients.
Pursuant to the agreement, both parties will jointly engage in the procurement and sales of Ruichi Electronic Vehicles (EVs) across China. And the parties are targeting sales of up to 1,000 Ruichi brand EVs in 2022. Specifically, the company is going to provide RMB 10 million in a revolving credit line to Youxing to partially cover its advance payment (i.e., allow withdrawals of up to 70% of each EV purchase) to Ruichi, and allow Youxing to repay the loan after the sales of the EV. If Youxing fails to repay, the company will be entitled to sell the EVs in auction at market price.
“We are excited to establish this partnership with Youxing. Youxing is the exclusive nationwide distributor for institutional clients as well as the general agent of Ruichi Auto in Hangzhou. On the other hand, Ruichi is one of the leading electronic mini commercial van manufacturers in China. Our cooperative model will both alleviate the financial burden of Youxing and boost Jiuzi’s sales of the Ruichi EV, and effectively minimize our financial risk as we have the right to sell the EVs in case of Youxing’s default to repay.”
“We anticipate that this cooperation will bring approximately RMB 35 – 45 million in sales revenue to Jiuzi New Energy in the coming year. We also expect a long term and sustainable growth out of this cooperative partnership going forward.”
— Shuibo Zhang, CEO of Jiuzi Holdings
Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.