Text: Bullet Finance Wang Yajing
Editor|Egg Total
American Editor | Wu Yizhong
Audit | Ode
Zhu Bajie is still struggling on the road to listing.
After the failure of the first two prospectuses, on December 7, the enterprise service e-commerce platform ZBJ.com (hereinafter referred to as ZBJ) submitted its report to the Hong Kong Stock Exchange for the third time, with CITIC Securities and CCB International as joint sponsors.
In order to go to the capital market, ZBJ.com has been planning for more than 10 years. Before moving to the Hong Kong Stock Exchange, ZBJ.com also sought a listing on the NASDAQ in 2011, but abandoned it in 2015, and planned to list on the A-share market in the same year, but ultimately did not formally apply.
ZBJ's listing road can be described as twists and turns, and it is not without reason that it is so obsessed with the capital market.
According to the prospectus, the agreements signed by some investors such as Changjiang Fund and Hanjiang Fund include a right to withdraw investment. This right will be terminated before ZBJ's first submission of the prospectus to the HKEX, but if it is withdrawn, rejected or returned, the terminated right to withdraw investment will be automatically reinstated, and the above-mentioned investors have the right to request Zhu Mingyue, the founder of ZBJ, Bajie Industrial and/or ZBJ, to repurchase the shares.
As of November 30, 2023, ZBJ's cash and cash equivalents amounted to $161 million. According to Zhu Bajie, the working capital is sufficient to meet the working capital needs for at least the next 12 months from the date of this document.
However, if it is necessary to repurchase the investor's shares at this time, it will inevitably have an impact on the company's capital chain, which is undoubtedly worse for Zhu Bajie, who has suffered losses for a long time. At this moment, landing on the Hong Kong Stock Exchange is a fast channel to alleviate the pressure on the capital chain and solve the VAM agreement.
It's just that if you want to "get the true scriptures", Zhu Bajie still has a lot of difficulties to overcome.
1, the long road to the market, Zhu Bajie "picked up" Pan Shiyi
Because of the collision with the character "Zhu Bajie" in "Journey to the West", the outside world is Xi to compare Zhu Bajie's listing road to "learning scriptures".
Within the company, Zhu Bajie is also moving closer to "Journey to the West". For example, Zhu Mingyue indirectly controls ZBJ.com through a company called Gao Laozhuang, which launched a SaaS solution called Somersault Cloud and established a subsidiary called Huaguoshan.
However, people seem to pay little attention to where the name Zhu Bajie came from?
All this should start with Zhu Mingyue, and the process is full of drama.
Photo / Zhu Bajie official website
In 2005, Zhu Mingyue created the first version of the ZBJ.com, but when it came time to register the domain name, he found that the names he had come up with were registered.
In an exclusive interview with Upstream News, he recalled this past incident and said: "In a fit of anger, my surname is not Zhu, no one should register Zhu Bajie, but after a check, zhubajie.com was also registered, but zhubajie.com.cn has not yet, I immediately preemptively registered it." ”
And this domain name was originally Pan Shiyi's. When Pan Shiyi developed the commune at the foot of the Great Wall in 2003, he wanted to build a life service platform, which was called Zhu Bajie, but later forgot to renew the fee and was "picked up" by Zhu Mingyue.
Zhu Mingyue has some luck in his body. He was the chief reporter of Chongqing Evening News, and he caught up with the era of Internet e-commerce for the first time.
In 2006, Zhu Mingyue founded Iwalk, the predecessor of Zhubajie. In Zhu Mingyue's words, at that time, the development of Taobao was in full swing, Dangdang's books were selling well, and Jingdong began to sell electrical appliances online instead of setting up a spot in Zhongguancun.
At the beginning, ZBJ.com was positioned as an "online reward platform" and adopted a "reward-bidding" commission model, from which ZBJ.com took 20% of the commission, which was a community model.
The idea of an enterprise e-commerce platform first came from Xiong Xinxiang, an angel investor in Zhubajie and chairman of Born Group. In 2007, Xiong Xinxiang told Zhu Mingyue when he invested in Zhu Bajie that the company should do "Taobao in the service industry". Later, Zhu Bajie changed from a community to a trading platform.
coincided with the east wind, and Zhu Bajie rode the wind. Tianyancha shows that Zhu Bajie has received a total of 8 rounds of financing, and investors include IDG Capital, Yi Yitian, Chongqing Cultural Investment Group, etc. At the time of the C round of financing in 2015, Zhu Bajie's valuation had soared to 11 billion yuan.
You can take off by the wind, but how high you fly depends on your strength after all.
More than 10 years have passed, and the success of Taobao and JD.com does not need to be repeated, Dangdang has experienced a "roller coaster" of listing, delisting and layoffs. Only Zhu Bajie is still hovering outside the capital market.
Since 2011, ZBJ.com has been seeking a listing, targeting the Nasdaq in the United States, and by 2015, when it chose to abandon its overseas listing, the plan was still in its preliminary stages and no formal application had been submitted.
Photo / Zhu Bajie prospectus
After that, Zhu Bajie turned his attention to A-shares and submitted to the Chongqing Securities Regulatory Commission in July 2019 for listing guidance and filing. This time, Zhu Bajie still did not formally submit a prospectus.
Photo / Zhu Bajie prospectus
Zhu Bajie claimed that since the timetable for the A-share listing was uncertain and relatively long, while the timetable of the Hong Kong Stock Exchange was more reasonable and predictable, and considering that the Hong Kong Stock Exchange could provide an international platform to access foreign capital and overseas investors, it began to attack the Hong Kong Stock Exchange.
On October 14, 2022 and April 14, 2023, Zhu Bajie submitted the report to the Hong Kong Stock Exchange twice, both of which ended in the invalidation of the prospectus.
In "Journey to the West", the story of Zhu Bajie and Tang Seng obtaining the true scriptures is widely circulated, but whether this can be staged in reality is still full of uncertainty.
2、累亏19亿，朱明跃大额套现
Behind the repeated defeats of various exchanges for many years is the reality of Zhu Bajie's dismal performance.
Zhu Bajie has been established for 17 years, but it has not yet come out of the quagmire of losses. The number of shares shows that from 2020 to June 2023, its net profit loss will be 269 million yuan, 367 million yuan, 230 million yuan, and 78.248 million yuan.
Photo / Zhu Bajie prospectus
The long-term losses have pushed the total losses of Zhu Bajie to a high level. As of June 30, 2023, the cumulative loss attributable to equity shareholders of the company has reached 1.954 billion yuan.
Photo / Zhu Bajie prospectus
On the one hand, it is mired in losses, and on the other hand, revenue growth is also failing. In the same period, ZBJ's revenue was 757 million yuan, 768 million yuan, 541 million yuan and 252 million yuan respectively, showing a downward trend.
Regarding the decline in performance, ZBJ.com believes that it is mainly due to the industry-wide impact of the COVID-19 epidemic, and does not mean that the company's competitive position in the industry or long-term business prospects have changed unfavorably.
However, "Bullet Finance" found that the number of customers in Zhubajie's transactions is declining significantly. From 2020 to June 2023, the number of customers transacted was 259,900, 330,700, 256,900 and 100,700 respectively.
Photo / Zhu Bajie prospectus
At the same time, the company's repurchase rate also began to loosen in the first half of this year. From 2020 to 2022, the business repurchase rates were 46.1%, 53.2% and 56.7%, respectively. As of June 30, 2023, this figure is 53.7%.
Although Zhu Bajie's performance was not bright and the listing was not smooth, this did not affect Zhu Mingyue's huge benefits from the company.
According to the prospectus, from 2020 to June 2023, Zhu Mingyue received remunerations of 54.184 million yuan, 946,000 yuan, 31.738 million yuan and 1.814 million yuan respectively. In just three and a half years, Zhu Mingyue has earned nearly 90 million yuan.
Photo / Zhu Bajie prospectus
Zhu Mingyue, who has been in the shopping mall for several years, has a more sophisticated level of capital operation.
For example, during the reporting period, Chongqing ZBJ.com Yichuang Microfinance Co., Ltd. (hereinafter referred to as "ZBJ.") provided loan services to ZBJ's customers, which was also controlled by Zhu Mingyue's affiliates.
From 2020 to June 30, 2023, the amount settled by ZBJ.com on behalf of the loan customer was 110,000 yuan, 1.2 million yuan, 280,000 yuan and 1,678 yuan.
Photo / Zhu Bajie prospectus
In addition, Zhu Mingyue and his friends easily cashed out hundreds of millions of yuan in the transfer of Didi's equity.
According to the prospectus, Chongqing somersault Yunyuan was an investment fund originally set up by Zhu Bajie to invest in Didi, and indirectly held Didi's interests. Zhu Bajie claimed that in the process of preparing for the A-share listing plan, Chongqing somersault was spun off from ZBJ.com in 2017 and awaited the completion of the Chongqing Municipal Development and Reform Commission's foreign investment approval procedures.
Zhu Bajie did not disclose the price at the time of the divestiture, but it cost hundreds of millions to repurchase the shares. On November 18, 2020, Jiaxing Lingchuang, a non-wholly-owned subsidiary of ZBJ, entered into equity transfer agreements with ZBJ.com Financial Services, Duilong Gaolaozhuang, Chongqing Xinsuan and Zhou Yun respectively to acquire a paid-in capital contribution of RMB 103 million to Chongqing Spreading Cloud, with a total consideration of RMB 110 million.
Regarding this acquisition, Zhu Bajie explained that he was full of confidence in Didi's business prospects and future development.
Photo / Zhu Bajie prospectus
On December 6, 2023, Chongqing Spreading Cloud only indirectly held 8,121 preferred shares of Didi, and if calculated on this basis, the price per share of Didi exceeded 10,000 yuan.
It is reported that after Didi was delisted in the United States, it has not yet been listed, but looking at the global capital market, stocks with a share price of more than 10,000 yuan have never been seen for eternity.
Photo / Zhu Bajie prospectus
As for whether Chongqing Spreading Cloud has developed a more valuable business, the price at which ZBJ divested Chongqing Spreading Cloud, what is the basis for the acquisition consideration, and whether it has sold Didi's equity in the middle of the process? In response to these questions, "Bullet Finance" tried to understand ZBJ, but the other party said that the company was in a quiet period and it was inconvenient to reply.
It is worth noting that Tianyan check shows that among the sellers, Duilong Gao Laozhuang is wholly owned by Zhu Mingyue, his wife Dong Yuxia, and Dong Yuxia's sister Dong Yuhua.
Before the exit, ZBJ, which held 81.30% of the equity of Chongqing Spreading Cloud, was Zhu Mingyue's contact, and Dong Changcheng, the legal representative and executive director of ZBJ, was Dong Yuxia's brother and Zhu Mingyue's brother-in-law.
Photo / Zhu Bajie prospectus
In an exclusive interview with Upstream News, Zhu Mingyue mentioned that when the Zhu Bajie website was just launched, someone was on duty, and at that time, Dong Changcheng University dropped out of school and was at home with nothing to do, so he got this job. "There is no salary, only three meals a day. ”
Now, backed by Zhu Mingyue, Dong Changcheng has become a high-level of Zhu Bajie. According to the prospectus, Dong Changcheng once served as a senior vice president and director of ZBJ, and is now a non-executive director.
3. The VAM agreement was suspended, and many shareholders left the market ahead of schedule
For the listing of Zhu Bajie, Zhu Mingyue had to continue to run.
Because the VAM agreement signed with investors is like a "sword of Damocles", and there is always a risk of falling.
Specifically, the agreements signed between some investors, such as Changjiang Fund and Hanjiang Fund, and Zhu Bajie included a right to withdraw their investment. According to the prospectus, this right was terminated before ZBJ's first submission of the prospectus to the Hong Kong Stock Exchange, but if it is withdrawn, rejected or returned, the right to withdraw the investment will be automatically restored.
In other words, if the requirements are not met, the above-mentioned investors have the right to require the Bajie Industrial and/or ZBJ, which is actually controlled by Zhu Mingyue, the founder of Zhu Bajie, and Zhu Mingyue and his wife, to repurchase the shares.
Photo / Zhu Bajie prospectus
This is tantamount to adding insult to injury for Zhu Bajie, whose cash flow is already quite tight.
For a long time, Zhu Bajie lacks "hematopoietic ability", and its operating cash flow has been negative. From 2020 to June 2023, its net operating cash flow was -34.962 million yuan, -93.886 million yuan, -203 million yuan, and -99.411 million yuan respectively.
Photo / Zhu Bajie prospectus
Therefore, in operation, enterprises can only rely on financing to survive. Before the IPO, ZBJ.com had received several rounds of investment, and the investment amount in the form of registered capital reached 2.595 billion yuan, but these funds have all been used up.
Photo / Zhu Bajie prospectus
As at 30 November 2023, ZBJ's cash and cash equivalents amounted to $161 million, and the credit line was $213 million, of which $153 million had been utilized.
Photo / Zhu Bajie prospectus
However, in the prospectus, ZBJ.com still stated that it can meet its working capital needs for at least the next 12 months from the date of this document.
Photo / Zhu Bajie prospectus
However, if at this time, ZBJ.com does not complete the VAM agreement and needs to repurchase the investor's shares, which will inevitably have an impact on the company's capital chain.
It's just that before Zhu Bajie went to the capital market, some investors had already chosen to "get off" in advance. According to incomplete statistics from "Bullet Finance", among the investors, Chongqing Cultural Fund divested in 2018, Beijing Harmony divested in 2021, and Hangzhou Mengsheng divested in 2022.
Photo / Zhu Bajie prospectus
Among the investors who did not exit, many were also involved in litigation disputes. According to the prospectus, Born Group, Zhirong Zhuoxin, and Chongqing Caixin were all involved in litigation disputes, and the equity of Zhubajie held by the three shareholders was also implicated.
In addition, Zhu Mingyue and Zhu Bajie also face claims.
In August 2023, Guangzhou Junlu, which holds about 5.24% of the limited partner interest in Cybernaut Zhongying, filed a claim against Cybernaut Zhongying, Ningbo Cybernaut Redstone Investment Management Co., Ltd., Wang Shiqiang, Shanghai Cybernaut Greentech, Zhu Mingyue and Zhu Bajie, alleging that Cybernaut Zhongying had defrauded its investors and demanded that Cybernaut Zhongying return the investment of 24 million yuan to Guangzhou Junlu with interest.
Photo / Zhu Bajie prospectus
At the same time, Guangzhou Junlu alleged that Zhu Mingyue and Zhu Bajie concealed the fact that Cybernaut Zhongying transferred certain shares, causing the loss of Cybernaut's property, and this case is still ongoing.
Looking back on the growth process of the past 17 years, we can see that Zhu Bajie has walked out of a roadmap of high and low. In Xiong Xinxiang's mouth, Zhu Mingyue's scene of being able to "be bigger than Taobao and bigger than Ma Yunniu" has not been realized after all. Now, in Zhu Mingyue's version, whether Zhu Bajie can obtain the "true scripture" will be proven by time.