NEW YORK – SunCar Technology Group Inc. (NASDAQ: SDA), a cloud-based B2B auto services and auto e-insurance provider in China with a market capitalization of $950 million, has announced securing an exclusive contract with Walmart (NYSE:WMT) (China) Investment Co., Ltd. for their 2025 Sam's Club Premium Membership Car Wash Project. According to InvestingPro analysis, the company currently appears fairly valued, despite showing strong revenue growth of 28.5% in the last twelve months. SunCar will provide car wash services to Sam's Club members in 17 cities, including economic hubs such as Shanghai and Shenzhen. The contract is valued at approximately 49 million RMB (USD 6.8 million).
The agreement extends SunCar's year-long partnership with Walmart and underscores Walmart China's confidence in SunCar's technological capabilities and service quality. While the contract aims to enhance the value of Sam's Club Premium Membership and expand SunCar's footprint in the automotive after-service market, InvestingPro data reveals the company faces challenges with weak gross profit margins of 10.8%. InvestingPro subscribers have access to 7 additional key insights about SDA's financial health and growth prospects.
Ye Zaichang, Chairman and CEO of SunCar, expressed the company's commitment to delivering a high-quality car wash experience and indicated plans to broaden the scope of their collaboration with Walmart China to include more service categories.
SunCar Technology Group, established in 2007, has become a prominent player in China's B2B auto service and auto e-insurance sectors, particularly for electric vehicles. The company's cloud-based platforms connect drivers with a variety of auto services and insurance options through a network of sales partners.
The information for this article is based on a press release statement. While SunCar's forward-looking statements indicate plans for growth and expansion, InvestingPro analysis suggests analysts do not anticipate profitability this year, with the company operating with moderate debt levels. Actual results may vary based on various factors, including market conditions and regulatory changes.
In other recent news, SunCar Tech has made significant strides, securing its first major contract with gas-powered automaker SAIC's Maxus brand. This move marks SunCar's entrance into a new segment, which analysts suggest could be a key growth catalyst. BTIG has projected an impressive 28% compound annual growth rate (CAGR) for SunCar's revenue through 2027, more than triple the 9% CAGR anticipated for its peers.
The firm's valuation of SunCar at 1.75x EV/Sales, despite the company trading at a modest premium compared to peers, indicates confidence in SunCar's growth potential and market leadership. InvestingPro has also shown optimism by setting a high target of $20 per share.
Moreover, SunCar is seeking to expand its market share in insurance policy renewals, a sector where its current share is less than 1%. BTIG suggests that a favorable regulatory environment in China could allow SunCar to increase eInsurance commission rates, potentially boosting the company's revenue by approximately 15%. These developments highlight SunCar's ongoing efforts to tap into new growth avenues and reinforce its competitive position.
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