Inflated income is warned! Why doesn't Jia Nailiang and Cecilia Cheung's Yuanwang Technology make money?
"Don't be an Internet celebrity with women's shoes", how long can live streaming be popular?
Author | Wu Lijuan
Editor丨Gao Yan
Source | Bronco Finance
From selling women's shoes to the Internet celebrity economy, Saturday squeezed into the live broadcast room. Yuanwang Technology has also completed a gorgeous turn from "the first share of women's shoes" to "the first share of live broadcast e-commerce".
Saturday is the first domestic women's footwear company listed on Shenzhen A-shares, and currently has its own brands such as "ST&SAT", "D:FUSE", "SAFIYA", "SATURDAY MODE" AND "FONDBERYL".
Through reorganization, Yuanwang Technology, which laid out the field of live broadcast e-commerce, landed in the capital market as an A-share live broadcast company.
On the evening of December 11, due to two years of inflated revenue and profits, and violations of information disclosure, Yuanwang Technology (002291. SZ) has received regulatory letters and warning letters one after another. The Guangdong Securities Regulatory Bureau's decision to issue warning letters to Hong Tao, Xie Rudong, Li Gang, He Jianfeng, and Ma Chao.
On its official website, you can see star anchors from the cross-border live broadcast industry, including Jia Nailiang, Wang Zulan, Huang Shengyi, Yang Zi, Cecilia Cheung, Huang Yi, Zheng Kai, Zhao Yazhi, etc.
However, in the first three quarters of this year, Yuanwang Technology handed over the worst quarterly report after the transformation of e-commerce. At a time when star-studded and live e-commerce is hot, why is Yuanwang Technology under pressure to lose money?
He was warned for 6 violations, including inflated income
According to the announcement, since the beginning of 2021, Yuanwang Technology has entrusted a third-party company to manage and sell part of the company's footwear inventory, due to poor management of the custody inventory, part of the inventory was sold in the inventory escrow in 2021 and 2022, and in the case of unsettled, it was not found that the book records of the above-mentioned custody inventory were inconsistent with the actual inventory, resulting in an overstatement of 49.6849 million yuan in the company's 2021 financial report and an overstatement of 75.728 million yuan in the 2022 semi-annual financial report.
From 2019 to 2020, Zhejiang Youcaihua Network Technology Co., Ltd. (hereinafter referred to as "Youcaihua"), a subsidiary of Yuanwang Technology, cooperated with a company in game promotion business. You Cauliflower does not bear the main responsibility for the corresponding services, but only the relevant business agent, according to the accounting standards for business enterprises, this type of business should be recognized according to the net method. Yuanwang Technology recognized the above-mentioned business income according to the total amount method, resulting in an overstatement of operating income and operating costs of 22.4005 million yuan in its 2019 annual report and 18.7063 million yuan in its 2020 annual report.
At the end of 2019, Horgos Yuanwang Network Technology Co., Ltd. (hereinafter referred to as "Horgos Yuanwang"), a subsidiary of Yuanwang Technology, recognized a revenue of 5.8885 million yuan (excluding tax) under the condition that the recognition basis was insufficient. In 2020, when it was determined that the above-mentioned income should not be recognized, Horgos Yuanwang did not write off the relevant income in a timely manner, but fabricated the collection of accounts receivable corresponding to the above-mentioned income through a third-party account, and returned the relevant amount to the third party in the form of service fees in 2021 and 2022. As a result of the above-mentioned behaviors, Yuanwang Technology inflated its revenue and profit by 5.8885 million yuan (excluding tax) in 2019, 6.2419 million yuan (including tax) in 2020, and inflated consulting service fees of 2.8219 million yuan and 3.42 million yuan in 2021 and 2022, respectively.
In addition to the inaccurate financial data due to financial accounting problems, Yuanwang Technology also has information disclosure violations.
From March to July 2022, Hangzhou Yuanwang Network Technology Co., Ltd. (hereinafter referred to as "Hangzhou Yuanwang"), a subsidiary of Yuanwang Technology, provided a total of 104 million yuan of financial assistance to five entities, but Yuanwang Technology failed to perform the corresponding review procedures and information disclosure obligations as required.
In 2021, 2022 and the first half of 2023, Yuanwang Technology will provide guarantees of 344 million yuan, 620 million yuan and 530 million yuan to its subsidiaries respectively, and its subsidiaries will provide guarantees of 180 million yuan in 2021, 2022 and the first half of 2023, respectively. 160 million yuan and 150 million yuan, although the above-mentioned guarantee amount was deliberated and approved by the board of directors and the general meeting of shareholders of the company, but when the above-mentioned guarantee occurred, Yuanwang Technology only disclosed the guarantee of 510 million yuan in a timely manner, and the existence of other guarantees was not disclosed in a timely manner.
In addition, the failure to timely disclose the co-investment with professional investment institutions is also the reason why Yuanwang Technology was warned this time.
Mr. Xia, who is engaged in the valuation consulting industry, believes that in some sense, the subjectivity of this kind of financial operation is obvious. For example, overcounting inventory will inflate assets, which will then affect the profits of enterprises, and overcounting operating income and operating costs will also affect the authenticity and accuracy of financial data to varying degrees.
Zhejiang businessmen with a net worth of 2.3 billion have created the "first share of women's shoes", with a loss of 1.4 billion in the past three years
Zhang Zemin, who was born in 1963, went south from Shenyang to make women's shoes.
In 1985, Zhang Zemin, who graduated from Shenyang Normal College, became a teacher at Shenyang Qigong No. 2 School. A few years later, he resigned and headed south.
In 1991, Zhang Zemin started a wholesale business in Guangzhou. In 1992, he became the exclusive general agent of Shenzhen Belle Shoes.
Soon after, Zhang Zemin was not satisfied with the sales channel and had the intention of creating an entity. In 1993, he gradually began to get in touch with the shoe industry and set foot in the shoe industry by setting up a company and investing in a shoe factory. In July 1994, the first ST&SAT shoe store opened in Shenyang after the "separation".
In 2009, Saturday was listed on the Shenzhen Stock Exchange, becoming the first A-share listed women's shoe company, and the net worth of Zhang Zemin and his wife reached 2.3 billion yuan at the issue price of 18 yuan per share at that time.
However, shortly after the listing, Saturday suffered a continuous decline in performance. In 2017, there was a huge loss of 347 million yuan.
So, starting in 2018, Saturday made an important decision: gradually shift to asset-light operations and start a transformation plan. In 2019, Saturday also announced the transfer of 100% of the shares of Foshan Saturday Technology R&D Co., Ltd., a move that was nicknamed "taking off shoes" by the outside world.
Hangzhou Yuanwang Network Technology Co., Ltd. (hereinafter referred to as "Yuanwang Network") is an Internet content production organization (MCN) founded in 2010 and has been deploying the field of live broadcast e-commerce since 2018. Chairman Xie Rudong has won the title of "2022 Zhejiang Entrepreneur of the Year". Yuanwang Technology was listed on the New Third Board in December 2015, but was delisted on March 22, 2017.
One is facing the pressure of loss, and the other has ideas about the capital market, at this time, the two companies bonded.
On Saturday, August 2018, it was announced that it planned to spend 1.788 billion yuan to acquire 89.4% of the shares of Yuanwang Network. In 2019, the acquisition was officially completed. In December 2022, it was announced on Saturday that it would change its name to "Yuanwang Technology", and Xie Rudong became the chairman, with a market value of nearly 15 billion yuan.
The transformation seems to be quite smooth, and after entering the field of live broadcasting, Yuanwang Technology's revenue continues to grow. The revenue of one of Yuanwang Technology's two major businesses, the Internet advertising industry, began to soar, gradually supporting half of the revenue.
From 2018 to 2022, the revenue of Internet advertising business will be 169 million yuan, 854 million yuan, 1.486 billion yuan, 2.266 billion yuan, and 3.574 billion yuan respectively, accounting for 11.17%, 41.26%, 69.1%, 80.62%, and 91.64% of the revenue respectively.
According to the 2022 annual performance report of Yuanwang Technology, the mobile Internet business, one of the two major businesses, mainly relies on the acquisition of Yuanwang Network Company in 2019 and the acquisition of fashion new media companies in 2017, such as Fashion Fengxun and Beijing Shixin.
However, since "not making women's shoes and becoming an Internet celebrity", Yuanwang Technology is in a situation of increasing revenue but not increasing profits. From the perspective of net profit, from 2018 to 2022, its net profit will be 13 million yuan, 165 million yuan, 27 million yuan, -695 million yuan, and -263 million yuan respectively. In the first three quarters of this year, the operating income was about 3.444 billion yuan, up 13.42% year-on-year, and the corresponding net profit was about -452 million yuan, down 318.6% year-on-year.
When the two companies sweetly hold hands, it is also the highlight moment of Yuanwang Technology. From January 2, 2019 to January 22, 2020, in just over a year, the share price of Yuanwang Technology soared by more than 500%.
With the sluggish performance, since 2020, the annual K-line chart of Yuanwang Technology's stock price has shown a downward trend as a whole. Up to now, it has closed at 10.93 yuan / share, with a total market value of 10.2 billion yuan, which is more than 31% lower than the market value of 14.981 billion yuan when the name change was announced on "Saturday" last year, and compared with the high point of 23.4 yuan / share in May this year, it is even more cut off.
In recent years, China's live broadcast e-commerce industry has entered an explosive period, and celebrities have joined live broadcast to bring goods. According to the data of the Shaking Research Institute, in 2022, the market size of the live broadcast e-commerce industry will reach 3.5 trillion yuan, a year-on-year increase of 48.21%, and in the first half of 2023, the market size of the live broadcast e-commerce industry will be about 1,991.6 billion yuan, and it is expected that in the whole year of 2023, the market size of the live broadcast e-commerce industry will reach 4,565.7 billion yuan, a year-on-year increase of 30.44%.
Despite the unsatisfactory profitability, Yuanwang Technology has built its own reputation with its star effect. In 2022, it already has more than 50 celebrities such as Jia Nailiang, Wang Zulan, Cecilia Cheung, and hundreds of anchors such as Shangyu Dagongzi and Li Xuanzhuo, and continues to sign stars Zhao Yazhi, He Rundong, Che Paul, etc. this year.
Yuanwang Technology is famous for making friends with Luo Yonghao, the humble culture of Wei Ya and his wife, and worry-free media that created Liu Genghong's phenomenal IP, and is known as the "Four Kings of MCN".
Wang Zhaojiang, executive dean of Beishan Changcheng Fund Investment Research Institute, believes that the company can indeed attract more traffic by signing a large number of celebrities, but in the end, it still depends on the conversion rate and customer unit price. Yuanwang Technology needs to improve its operating performance as soon as possible in order to reverse the situation of performance loss. Relying on concepts to increase market capitalization is not long-lasting.
Is celebrity live broadcast still fragrant?
Star Jia Nailiang, as the head anchor, set a remarkable record of total sales of more than 1.36 billion yuan during this year's Double 11. According to the company's disclosure, Yuanwang Technology's total GMV during the Double 11 period this year was 3.29 billion yuan, an increase of 38% compared with the same period in 2022.
However, with the return of the popularity of theaters, the warmth of the film and television industry has become stronger, and more and more stars have begun to give up live streaming and return to their main business. Starting from 2022, Liu Tao, Qin Hailu, Jing Tian and other once-hot star anchors have left the team or completely stopped broadcasting.
The trend of celebrities giving up live streaming also tortures the business model of Yuanwang Technology. Shen Meng, director of Xiangsong Capital, believes that the performance and business of MCN are highly correlated with the performance of anchors, but they are also in contradiction. Moreover, the stability of e-commerce live broadcast is not prominent, and the guarantee of sustainability is also limited.
However, Yuanwang Technology is very good at chasing hot spots, and has also expanded many emerging fields in recent years. In addition to celebrity live broadcasts, popular concepts such as virtual digital humans, NFTs, web3.0 and the metaverse have appeared on it.
Earlier, when the concept of metaverse and AI was on fire, Yuanwang Technology announced that it had a layout, and even studied Web3 and created digital humans.
In June this year, Messi's trip to China involved hundreds of millions of fans, and Yuanwang Technology planned a marketing show through its anchor Li Xuanzhuo, which was watched by 2.92 million people in just 15 minutes, becoming Messi's first show on Taobao Live.
Yuanwang Technology has also recently made its own skit. On November 3, the company replied on the interactive platform, "The mini program short drama platform is in trial operation, the self-made short drama is being filmed, and the self-made content and platform are expected to be officially launched in December."
In addition, since May this year, Yuanwang Technology has frequently mentioned the company's progress in the direction of artificial intelligence.
It can be seen that after separating from the industry, although the revenue situation of Yuanwang Technology has improved, the future transformation and upgrading road still needs to be adjusted and clarified.
Wang Zhaojiang said that the business model of Yuanwang Technology has yet to be tested by the market, although the company is a live broadcast with goods, but the essence is still a retail consumption economy, but the business model is different. Whether Yuanwang Technology can gain a firm position in the retail industry through the live broadcast model mainly depends on three indicators: GMV, customer unit price, and return on investment.
According to the research report of Guojin Securities, the company's short-term performance is under pressure due to the weak recovery of consumption, the company's layout of local life live broadcast may lead to a decrease in gross profit, and the need for moderate investment in the early stage of AI applications.
The research reports of major brokerages generally believe that Yuanwang Technology is facing risks such as the operation effect of the platform is less than expected, the loss of head anchors, the policy risk of live broadcast e-commerce, and the application of new technologies is less than expected.
It is worth mentioning that in recent years, both shareholders and founders have been reducing their holdings.
After acquiring the equity of Hangzhou Yuanwang Network Technology Co., Ltd. from 2019, from 2020 to June this year, Yunnan Zhaolong, which is actually controlled by Zhang Zemin, and LYONE GROUP PTE. LTD. started to reduce its holdings.
In 2022, Yunnan Zhaolong will be the largest shareholder of Yuanwang Technology. Zhang Zemin and his wife Liang Huaiyu are the actual controllers of Yuanwang Technology.
From December 7, 2022 to June 1, 2023, Yunnan Zhaolong reduced its holdings by a total of 17.9569 million shares, with an average price of 15.6 yuan, and a total of about 280 million yuan. On June 7, it was announced again that Yunnan Zhaolong plans to reduce its holdings of the company's shares by centralized bidding within 6 months after 15 trading days from the date of the announcement of this shareholding reduction plan.
For the reasons for the above two reductions, Yuanwang Technology explained that it is to resolve the debt pressure of shareholders, reduce the risk of stock pledge financing, and other investment needs.
By the end of the third quarter, Yunnan Zhaolong had fallen to the third largest shareholder, with its stake falling from 17.7% to 6.11%.
In addition, on December 27, 2022, Xie Rudong, chairman of Yuanwang Technology, reduced his personal holdings by 18.2 million shares, due to the block transaction, with an average transaction price of 14.68 yuan per share, involving an amount of 267 million yuan.
Do you usually pay attention to celebrity live broadcasts? When do you think Yuanwang Technology will be able to achieve profitability?