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Competition in the automobile market continues to intensify, further accelerating the pace of industry reshuffle.

After nearly six months of suspension of work and production and self-rescue, HiPhi Auto's parent company Human Horizons (Jiangsu) Technology Co., Ltd. entered the pre-reorganization stage.

On August 8, the People's Court of Yancheng Economic and Technological Development Zone issued a decision to accept the pre-reorganization application of HiPhi Auto's parent company Human Horizons (Jiangsu) Technology Co., Ltd. The pre-reorganization period is six months from the date of the decision, and can be extended for three months upon application by the pre-reorganization administrator for legitimate reasons.

The decision shows that as of April 30, 2024, the known debts that have not been repaid when due by Human Horizons (Jiangsu) Technology Co., Ltd. have exceeded the company's total assets, and the assets are insufficient to repay all debts, and the company has already met the grounds for bankruptcy.

The People's Court of Yancheng Economic and Technological Development Zone believes that Human Horizons' business involves the research and development and production of new energy vehicles, autonomous driving, cloud computing, etc. The new energy vehicle industry in which it is located has broad prospects. Pre-reorganization will help improve the efficiency of corporate reorganization, reduce corporate reorganization costs, and give full play to the function of the reorganization system to save troubled companies and better protect the legitimate rights and interests of creditors. The debtor has pre-reorganization value and meets the pre-reorganization conditions.

In February this year, HiPhi was forced to suspend operations due to tight cash flow and production difficulties. Founder Ding Lei said that he firmly believed that the company would find a turnaround in the next three months and start to actively save itself.

Driven by Ding Lei, HiPhi executives began to promote products on live streaming platforms, and said that all revenue from live streaming would be invested in HiPhi's after-sales service. However, third-party data platforms show that HiPhi's last live streaming promotion was on April 23.

In addition, in the past six months, there have been several rumors that car companies will take over HiPhi, including FAW, Changan Automobile, Avita, Lifan Technology, etc. Ding Lei revealed that 5 to 10 companies have had in-depth negotiations with HiPhi.

In May this year, news came out that HiPhi Auto’s parent company Human Horizons and automotive investment consulting platform iAuto signed a comprehensive strategic cooperation agreement in Hong Kong.

It is reported that iAuto plans to invest 1 billion US dollars under the guarantee of relevant investment institutions as the first round of special funds for the restructuring of Human Horizons. At the same time, iAuto will fully support HiPhi Auto's resumption of work and production.

Public information shows that iAuto is a company registered in Delaware, USA, with its core business being the research and development, production, integrated sales and operation of clean energy vehicles and key components. It is worth mentioning that a memorandum of understanding announcement by Hong Kong-listed company Hybrid Kinetic Energy (01188.HK) in September 2023 shows that the ultimate beneficial owner of iAuto is Yang Rong, Chairman of the Board of Directors of Hybrid Kinetic Energy.

The industry generally believes that the investment in iAuto will become an important "straw" for HiPhi to save itself. However, HiPhi Auto has not made a clear response to the authenticity of this cooperation. It only stated that for more information, please pay attention to the official channels and said that the company has been promoting the resumption of work and production.

Since its establishment, HiPhi has been positioning itself as a high-end new energy vehicle brand, and has been pursuing a "high-end" approach from branding to product design. However, in the fierce market competition, HiPhi's product sales are not optimistic.

Cui Dongshu, secretary-general of the National Passenger Car Market Information Joint Conference, believes that the current complex automobile market will, to a certain extent, accelerate the elimination of some weak brands with small sales volumes and tight capital chains.