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Home >> Automaker Email this story   Print this story to spin off used-car sales website to raise cash
Bloomberg | 2015/12/1 Inc., a Craigslist-style online service that lists classified ads for products, jobs, housing and services, plans to spin off its used-car trading platform. said it will divest a controlling 54-percent interest in its Inc. subsidiary to Co-chairman Mark Haoyong Yang in exchange for cash.

Yang, who will become the used-car website's CEO, will invest $600 million (3.8 billion yuan), Chinese news portal reported.

"As the middle class develops and they consume more, one of the first things they buy is cars," said Wayne Lin, a money manager at QS Investors LLC who invests in Chinese stocks. " may just be positioning more specifically by spinning it off and saying that there may be faster growth other than a Craigslist kind of site."

A spokeswoman in the U.S. said the company declined to comment on financial terms of the deal, which wasn't disclosed in the statement.

"We see this move as positive for's share price, as the market previously discounted the money-burning segments, especially the used-car segment Guazi," Credit Suisse Group AG analysts led by Evan Zhou said in a note to investors. "It should greatly help investor sentiment toward cash burden and profitability trajectory in the coming years."

China's technology and e-commerce companies are battling for market share, with expanding its offerings and building its customer base through mergers and acquisitions. It broadened real-estate listings in March after purchasing Anjuke Inc. and bought a minority stake in To8to, an online interior decorating service.

The company's shares have gained 38 percent this year, compared with a 13 percent increase in the Bloomberg gauge of Chinese ADRs.

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