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ANAHEIM, CA - Phoenix Motor Inc. (NASDAQ:PEV), recognized for manufacturing heavy-duty transit buses and providing electrification solutions, announced a partnership today with Beijing Guorun Venture Capital Co., Ltd. to create a 1 billion RMB (approximately USD 140 million) M&A investment fund. This fund aims to support the acquisition and development of electric vehicle (EV) manufacturing sites in China.
The strategic cooperation agreement with Guorun is a significant move for Phoenix Motor’s subsidiary, EdisonFuture International Co., Ltd., to expand its manufacturing base in China. Denton Peng, CEO of Phoenix Motor, expressed enthusiasm about the partnership, highlighting its potential to combine the company’s EV technology with China’s manufacturing capabilities to serve both domestic and international markets effectively. The company’s solid financial position is reflected in its healthy current ratio of 2.19, indicating strong ability to meet short-term obligations, while maintaining an attractive P/E ratio of 5.15.
Guorun will be responsible for mobilizing funds to establish the specialized M&A investment entity. The entity’s focus will be on acquiring strategic EV production assets in China, as identified by EdisonFuture International. This initiative is a key component of Phoenix Motor’s strategy to grow its international presence, leveraging advanced EV technologies and China’s extensive supply chain and low-cost capital.
EdisonFuture International, headquartered in Hong Kong, serves as Phoenix Motor’s global expansion arm, targeting markets across Asia, Europe, and South America. By securing this strategic funding initiative, Phoenix Motor aims to strengthen its position in the Chinese EV market, which is among the largest in the world, while optimizing operational efficiencies and cost structures.
The agreement underscores Phoenix Motor’s commitment to scaling its international business through strategic financial partnerships and infrastructure expansion. The integration of Chinese engineering resources and capital efficiency with Phoenix’s innovative EV technologies positions the company to meet the increasing global demand for commercial and light-duty electric vehicles.
This initiative is in line with Phoenix’s broader vision of advancing sustainable transportation solutions and expanding access to zero-emission vehicles worldwide. With impressive revenue growth of 425% in the last twelve months, Phoenix Motor shows promising momentum. InvestingPro subscribers can access 8 additional key insights and a comprehensive Pro Research Report, offering detailed analysis of Phoenix Motor’s growth trajectory and market position among 1,400+ top US stocks.
This news is based on a press release statement from Phoenix Motor Inc. and does not include any speculative or opinion-based content.
In other recent news, Phoenix Motor Inc. announced it will amend its financial statements for the first and second quarters of 2024 due to errors related to warrant liabilities. The company identified these misstatements during the preparation of financials for the quarter ending September 30, 2024. Specifically, the errors involved the understatement of loss on warrants issued and gain on change in fair value of warrant liability. Meanwhile, Phoenix Motor has secured a $6 million loan from J.J. Astor & Co. to expand its production capabilities, aiming to meet the growing demand for electric transit buses. In another development, the company launched EdisonFuture International Co., Ltd., a subsidiary in Hong Kong, to expand its electric vehicle technologies globally. Additionally, Phoenix Motor has embarked on a new initiative to create autonomous robots for package pickup and last-mile delivery. The company also formed a strategic partnership with Noodoe to advance zero-emissions electric transportation through innovative charging solutions. These recent developments highlight Phoenix Motor’s efforts to enhance its market presence and address financial reporting challenges.
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