Senmiao Technology (AIHS) Stock Pops on Framework Agreement

Sinmiao Technology AIHS Stock News

Senmiao Technology Ltd (NASDAQ: AIHS) is headed for the top in the market this morning, following up on the tremendous gains seen in the stock yesterday after a great quarterly report. Today, the company made another announcement surrounding a Framework Agreement. Here’s what’s going on.

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AIHS Stock Climbs on Framework Agreement

In the press release, Senmiao Technology announced that it has signed a Framework Agreement with BYD Auto Sales, a wholly owned subsidiary of BYD Company Limited. The agreement surrounds the sale of BYD manufactured electric vehicles to AIHS and joint promotion of electric vehicles for use in China’s ride-sharing and ride-hailing market.

As part of the agreement, AIHS agreed to promote and give priority to BYD’s EVs for its leasing customers that use vehicles for ride-sharing. On the other side of the coin, BYD will provide favorable pricing, financial support, charging station priority, marketing, and after-sales service. Senmio is expected to purchase at least 5,000 electric vehicles from 2020 to 2021.

In the release, AIHS reminded investors that it currently ranks as the leading provider to the ride sharing market in large Chinese cities. The company intends on growing this leading position and believes that the agreement will help accelerate this growth.

In a statement, Xi Wen, AIHS Chairman and CEO, had the following to offer:

We are delighted to enter into this framework agreement with such a well-regarded company as BYD as we continue to promote the use of EVs in public transportation. We feel that the combination of our position in the ride-sharing markets where we operate along with the demand for EVs in China generally will be an exceptional fit for our customers. Our goal is to provide a wide range of financing and leasing options as we build out Senmiao’s network throughout China, and agreements such as this are instrumental to achieving appropriate scale.

This Is Big News

The news released today by Senmiao Technology is overwhelmingly positive. After all, the company is doing in the Chinese ride-sharing market what Amazon.com did in the United States eCommerce market. It is making large investments in infrastructure in order to create an economic moat that competitors simply can’t compete with.

With this agreement with BYD, the company will have access to a large fleet of vehicles to further expand its business into priority regions, likely leading to incredible growth in revenue. All in all, AIHS stock is one to watch closely.

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