Recently, Huafang Group, which owns live broadcasting platforms such as Hua pepper and six rooms, once again submitted a prospectus to the Hong Kong Stock Exchange, which submitted the form for the first time in October last year, but the material has expired after 6 months.
Once Huafang Group is listed, it will become another listed live broadcasting company after Momo, Douyu, Huya and Yingke. However, with the increasingly expensive traffic cost and stricter supervision, domestic live broadcasting platforms have begun to be busy transforming into e-commerce, social fields or overseas markets. Huanju Group sold YY, focusing on the overseas platform BIGO; the revenue of the first share of Hong Kong live broadcast is no longer a tip; the proportion of Kuaishou's tip revenue has decreased year by year; on the contrary, the three companies that focus on live broadcast tips, namely Zhiwen Group (Momo), Huya and Douyu, have all experienced a downward trend in performance and stock prices...
What will happen to Huafang Group, which accounts for more than 97% of the revenue of live broadcasting business, to go public at this point in time?
Backed by Songcheng Performing Arts, 360
In the pre-listing shareholder structure, several companies controlled by 360 founder Zhou Hongyi held a total of 38.21% of the equity of Huafang Technology, and the second largest shareholder, Songcheng Performing Arts, held 37.06% of the shares, and Zhou Hongyi served as the chairman of the board.
According to the prospectus, Huafang Group is an online audio and video social entertainment enterprise, mainly providing audio and video live entertainment and social networking services, its main platforms are Huajiao, Liufangfang and Holla, of which the main battlefields of the former two are the domestic mobile terminal and PC terminal, and the latter is a social software for overseas markets.
Peppercorn Live was launched in 2015, the main body of operation is Beijing Mijing and Wind, is the product of Zhou Hongyi's heavy investment, not only incubated investment, but also invited Fan Bingbing and other stars to attend the pepper night, and Wang Sicong frequently interacted in the live broadcast room, etc.; Six Rooms is one of the first three live broadcast platforms in China, is songcheng Performing Arts in 2015 with 2.602 billion M&A assets, in 2019, Songcheng Performing Arts with six rooms as the main body and Pepper Live broadcasting once again integrated into the new main body of "Huafang Group", After the restructuring, the overall valuation of Huafang Group is 8.5 billion yuan, and the largest shareholder is replaced by 360.
Live broadcast revenue accounts for more than 97%, and the ear economy is rising
The prospectus discloses that from 2019 to 2021, the revenue of Huafang Group was 2.831 billion yuan (the same below), 3.683 billion yuan and 4.6 billion yuan, respectively. From the perspective of revenue composition, the current main force of Huafang Group is still the merged peppercorn live broadcast in 2019, and the revenue of peppercorn live broadcasting from 2019 to 2021 is 2.166 billion yuan, 2.826 billion yuan and 3.469 billion yuan, accounting for more than 75% of the group's total revenue. The live broadcast business is still the absolute pillar of huafang group revenue, accounting for 99.6%, 99.6% and 97.3% of the live broadcast business revenue in the past three years, respectively.
Despite relying on the live broadcast business, from the perspective of subdividing the live broadcast track, huafang seems to have no risk of revenue decline for the time being. On the one hand, although the growth of live streaming video to live broadcast revenue was almost stagnant last year, the live broadcast revenue of the six rooms still maintained a growth of nearly 20%; on the other hand, the development of pepper audio content and voice products, the scale of ear economy realization surged, from 193 million yuan in 2019 to 1.106 billion yuan in 2021, and the proportion of revenue increased from 6.8% to 24.7%.
As mentioned above, Huafang did jump out of the circle of "live broadcast platform growth difficulties" in terms of revenue, but the company still needs to face many challenges.
Although Huafang Group hopes to take ITS HALLO Group, which mainly focuses on overseas social platforms, as one of the main growth points of the "three-legged stand" with six rooms and peppercorns, its business revenue currently accounts for only 2.6% of the total business revenue, which is difficult to compare with the live broadcast business that already has a mature revenue model and platform products in a short period of time.
Huafang Group had explored virtual live broadcasting, but failed. In April 2020, Huafang Group acquired Houla Technology, which focuses on virtual stars and virtual live broadcasting businesses, but due to the development speed of the virtual star market being lower than expected, the business of Houla Technology was eventually suspended, and this failed acquisition and business shutdown adjustment also brought an impairment loss of 65.5 million yuan to Huafang Group.
In 2020, the six rooms, which still maintained rapid growth, also fluctuated due to the epidemic and the increase in competitors, resulting in a goodwill impairment of 1.778 billion yuan.
In addition, B station, Douyu, Huya and other platforms have been rumored to lay off employees some time ago, in the live broadcast platform has stepped towards the era of omnipotent, pan-entertainment, whether Huafang Group can maintain its leading position in the "audio content" business module and use the advantages of audio content to expand the territory still needs time test.
Supervision is becoming stricter, and Lianmai PK is restricted
At this year's 315 party, CCTV exposed the industry chaos of "male operators pretending to be female anchors", and subsequently, the Central Cyberspace Administration and other three departments launched a special action to "clear and rectify the chaos in the field of online live broadcasting and short videos". Recently, the Central Civilization Office, the Ministry of Culture and Tourism, the State Administration of Radio and Television, and the State Internet Information Office jointly issued the "Opinions on Regulating Online Live Broadcast Rewards and Strengthening the Protection of Minors" (hereinafter referred to as the "Opinions"). The "Opinions" clearly point out that "minors are prohibited from participating in live broadcast tipping" and "strictly control minors from engaging in anchors", and the website platform should cancel all tip lists within 1 month of the release of the "Opinions", prohibit ranking, drainage, and recommendation of network anchors based on the tip limit as the sole basis, and prohibit ranking users with the tip amount as the standard. The "Opinions" also require that the number of "lianmai PK" in the live broadcast of a single account during the prime time of live broadcasting at 20-22 o'clock every day shall not exceed 2 times, and the PK punishment link shall not be set, and the technical implementation method shall not be provided for the PK punishment.
Nanduwan Finance Agency reporter noted that in each live broadcast, "the big brother of the list" is the most prestigious title, because it not only means more respect and courtesy from the anchor, but also represents the strong financial strength, as well as the status of the jianghu in the entire field of live broadcasting; in addition, the anchors will attract more new fans' attention through the way of Lianmai PK, and the "strange bet" during the PK period can often set off the atmosphere in the live broadcast room to the extreme.
Huafang Group also mentioned the PK system many times in the prospectus, saying that the fierce competition environment caused by PK battles encourages users to participate and tip.
Without a list and limiting the number of PK times, it can be said that it blocks the two core scenarios where the anchor gets a tip. Industry insiders told Nandu reporters, "These policies will hit those platforms that rely on hitting the list, PK and selling and other ways to make a profit, and for other platforms, more feelings will be that making money is not as easy as before." ”
At the same time, Nandu reporter learned through the black cat complaint platform that recently many users have questioned interactive activities such as "guessing" and "unpacking" in the live broadcast of peppercorns, and a complainant pointed out that the platform induces users to recharge and then unpack, each time the minimum recharge is 30 yuan, promising 30 yuan to split 3 times, not to be compensated, but after multiple recharges, it has not yet reached the threshold for withdrawal, can not apply for compensation, and the recharge process shows that the payee is pepper live. Some complainants said that the platform party "did not admit this matter and pretended not to know." In addition, some complainants questioned the suspected gambling of other interactive activities of The Pepper Live Broadcast.
Industry insiders said that this is also worth the vigilance of Huafang Live and even the entire Huafang Group - in the process of the company's development, they need to avoid their own platform being used by scammers, and as a platform company, there are many compliance pits that huafang group needs to fill.
Written by: Nandu Bay Finance Agency reporter Ye Lu intern Duan Xinyu
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