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China Auto Rental to launch U.S. IPO for $300 millio

BEIJING – China Auto Rental Ltd., the largest car rental firm in China, on January 18 submitted an application to the U.S. Securities and Exchange Commission to launch its initial public offering of up to $300 million in American depository shares. The move is targeted at raising funds to acquire more vehicles to expand its fleet.

The company plans to list on the New York Stock Exchange under the symbol CARH. It is expected to become the first Chinese auto rental service provider to launch its IPO in the U.S.

According to the prospectus, the company reaped ¥489.37 million ($77.3 million) in operating revenue in the first nine months of 2011, and the firm suffered a net loss of ¥117.63 million in the same period. Total expense for the nine-month period stood at ¥606.77 million.

China Auto Rental said it topped the country’s auto rental industry with a fleet size of 26,000 vehicles at the end of last year. It is the only car rental firm with a fleet of over 10,000 vehicles.

The combined market share of the top five auto rental firms in China, consisting of China Auto Rental, eHi, Avis, Dazhong and Shouqi, reached only around 11 percent last year. By the end of 2010, according to data from consultancy Roland Berger, China had more than 10,000 car rental firms with an average fleet size of only 50 cars. In contrast, the combined market share for the top five auto rental service providers in the U.S. were about 95 percent.

Lenovo Group Ltd., a leading Chinese PC maker, has a 64.49 percent stake in China Auto Rental.

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