Suncar Technology Group (stock code: NASDAQ: SDA) officially completed its merger with Goldenbridge Acquisition Limited in May 2023 and was listed on NASDAQ through a SPAC transaction on May 18th. The group is a leading digital enterprise in China, providing automotive after-sales service and online auto insurance intermediary services. Frost & Sullivan (Frost & Sullivan, hereinafter referred to as 'Frost & Sullivan') provided exclusive industry advisory services for the listing of Suncar Technology Group and hereby warmly congratulates them on their successful listing.
During the process of listing in the US, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing the relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important chapters), helping the issuer communicate with the SEC and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and assisting the issuer in completing various feedbacks from the SEC regarding industry issues.
Investment highlights
The company is a leading digital enterprise in China, providing automotive after-sales service and online auto insurance intermediary services;
The company has accumulated rich experience and can meet the continuously expanding needs of car owners;
The company has established a digital, technology-driven online platform to provide its B2B services;
The cross-use and interconnection between the company's automotive after-sales service and insurance intermediary business lines have created a positive feedback loop, mutually promoting their growth.
According to a report by Frost & Sullivan:
The annual compound growth rate of new energy passenger vehicle sales in China is expected to be about 26.0% from 2021 to 2026;
The after-sales service market for new energy vehicles in China is expected to have an annual compound growth rate of about 35.4% from 2021 to 2026.
Overview of China's B2B Auto Comprehensive After-sales Service Market
As the world's largest passenger car market, China's massive automobile ownership brings tremendous market potential to its B2B comprehensive automotive after-sales service market. In addition, in order to improve service quality and maintain customer loyalty, corporate customers such as banks, airlines, and insurance companies have begun to provide automotive after-sales services through cooperation with comprehensive automotive after-sales service providers.
According to a Frost & Sullivan report, in the past five years, China's B2B comprehensive automotive after-sales service market has increased from about 3.9 billion yuan in 2017 to about 9.1 billion yuan in 2021, with an annual compound growth rate of about 23.6% during this period. As regulations continue to standardize the market environment and promote integration across all parties in the automotive after-sales value chain, it is expected that by 2026, China's B2B comprehensive automotive after-sales service market will increase to about 16.4 billion yuan, with an annual compound growth rate of about 12.5% from 2021 to 2026.
Sales volume of new energy passenger vehicles in China
Driven by government regulations to achieve carbon neutrality and emission peak targets, there has been an increasing number of new energy passenger vehicle manufacturers and traditional automakers. In addition, with the development of infrastructure for new energy passenger vehicles, these vehicles have been recognized by more people in recent years.
According to a Frost & Sullivan report, the sales volume of new energy passenger vehicles increased from about 579,000 units in 2017 to about 3.341 million units in 2021, with an annual compound growth rate of about 54.9% over the past five years. With the decrease in the cost of new energy passenger vehicles and technological progress, as well as improved performance, the market may receive substantial stimulus from demand. It is expected that by 2026, the sales volume will further increase to about 10.609 million units, with an annual compound growth rate of about 26.0% over the next five years.
Sales volume of new energy passenger vehicles in China, 2017 - 2026E
Source: Frost & Sullivan report
Overview of China's New Energy Vehicle After-sales Service Market
In the past few years, new energy vehicles have been a hot topic of discussion within the industry. With continuous R&D investment by companies in the field of new energy vehicles, recent years have seen strong sales growth demonstrating their tremendous market potential. In addition, as governments set targets such as carbon neutrality and emission peaks, more and more participants are rapidly entering the new energy vehicle after-sales service market to gain an advantage over market leaders. More and more auto after-sales service providers are deploying specific equipment and initiating pilot collaborations with new energy vehicle manufacturers to prepare in advance for potential growth momentum. From 2017 to 2021, the new energy vehicle after-sales service market increased from about 2.7 billion yuan to about 13.3 billion yuan, and it is expected to grow to about 60.6 billion yuan by 2026, with an annual compound growth rate of about 35.4% over the next five years.
Overview of the Chinese Auto Insurance Market
Due to the strong demand brought about by the continuous growth in automobile sales, the market size increased from approximately 759.4 billion yuan to approximately 818.8 billion yuan from 2017 to 2019. However, since the implementation of the insurance premium reform in 2020, the market has been impacted to some extent, with a large number of unqualified automobile insurance companies being fined and some even exiting the market. In addition, with the prosperity of other non-auto insurance products, the proportion of the automobile insurance market in the overall property insurance market is also declining. As a result, the market fell to approximately 777.3 billion yuan in 2021, maintaining an annual compound growth rate of about 0.6% between 2017 and 2021. With the growth in automobile sales, market maturity, and standardization, the automobile insurance market is expected to become more concentrated. By 2026, China's automobile insurance market is expected to increase to approximately 783.5 billion yuan, with an annual compound growth rate of about 0.2% over the next five years.
Overview of the China Automobile Insurance Agency Market
Due to the closer connection between auto insurance agencies and target customers, clients tend to purchase auto insurance through agencies that can better grasp their consumption scenarios. As a result, the auto insurance agency market increased from about 352.5 billion yuan in 2017 to about 426.8 billion yuan in 2020. Affected by the government's strengthened supervision of the entire auto insurance industry, the auto insurance agency market declined to about 412 billion yuan in 2021. With the gradual weakening of market supervision, it is expected that the auto insurance agency market will reverse its downward trend in the future and increase to about 427 billion yuan by 2026, with an annual compound growth rate of about 0.7% from 2021 to 2026.
Overview of China's Online Auto Insurance Market
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Frost & Sullivan has extensive research experience in the automotive and transportation industries, assisting well-known companies in successfully accessing capital markets. Successful listings include: Youpin Auto (NASDAQ: UCAR), HSAI Technology (HSAI.NASDAQ), ECX Technology (ECX.NASDAQ), Buyang International (2457.HK), NWTN Group (NWTN.NASDAQ), Zhongxin New Energy (3931.HK), Leapmotor (9863.HK), DBS Global (2418.HK), Kuaidou Taxi (2246.HK), NIO (NIO.SGX), NIO (9866.HK), Canggang Railway (2169.HK), YGMZ (YGMZ.NASDAQ), Asia Express (8620.HK), InfinityL&T (1442.HK), TOMOHOLDINGS (6928.HK), EH (EH.NASDAQ), Aodima (8418.HK), Xiangxing International (8157.HK), CIMC Vehicle (1839.HK), Xunlong (1930.HK), CSSC Leasing (3877.HK), Chengdu Expressway (1785.HK), Tianrui Automotive Interior (6162.HK), Baren Holdings (2885.HK), Huazi International (2258.HK), Pulin Chengshan (1809.HK), NIO (NIO.NYSE), Wanlida (8482.HK), Qilu Expressway (1576.HK), Yingheng Technology (1760.HK), Asia Industry (1737.HK), Ruifeng Power (2025.HK), Gaomeng Technology (8065.HK), Hebei Yichen (1596.HK), Zhengli Holdings (8283.HK), Junao Holdings (8035.HK), Yade Group (1585.HK), Yihai Car Rental (EHIC.NYSE), Xincheng Power (1148.HK), Zhengxing Wheels (ZX.NYSE), Shuanghua Holdings (1241.HK), Changfeng Axles (1039.HK).
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