Reporter | Yang Song Editor| Xia Chong
Zhou Hongyi has another company that wants to be listed on the Hong Kong stock market.
On October 25, huafang group, which was merged with six rooms by Huaxian Live, submitted a prospectus to the Hong Kong Stock Exchange after three years of restructuring.
According to the prospectus of Huafang Group, Zhou Hongyi is the chairman of the board of directors of the group, and as of the public offering, he has a total of 38.21% of the equity through his controllable companies, ranking the largest shareholder.
However, according to the "21CBR" reporter's inquiry, Zhou Hongyi, who even had to use peppercorns to broadcast the spontaneous combustion of his BMW car, has recently been busy with new car-making businesses, and rarely re-amway's live broadcast products on social media.
The major shareholder, Yi Xingshan, can reflect to a certain extent that under the attack of short video products such as douyin and Kuaishou, the "predecessors" of live broadcasts such as six rooms and peppercorns have touched the growth ceiling.
01
Peppercorns have dropped by tens of millions per month, and user growth depends on new products
Judging from the development history of Huafang Group, this is a late listing.
Its main PC live broadcast product Six Rooms was established in June 2006; in 2015, the industry set off a "thousand broadcast war", backed by 360 pepper live broadcast survived, but users were snatched away by short video products.
More traditional live broadcast products, had to huddle together for warmth. In June 2018, the two sides announced a merger.
According to the prospectus, as of August 31, 2021, Huafang Group had 372 million registered users, of which Huafang Group had 207 million and 77 million registered users in Huafang and Six Rooms respectively; in the first eight months of this year, the average monthly active users of Huafang Group were 59.9 million.
As far as the main product, Peppercorn Live, is concerned, in 2018, its monthly active users reached its peak, and in the past three years, the data has fallen by more than 10 million.
From 2018 to August 31, 2021, the monthly active users of Huazhu Live were 41 million, 23.6 million, 27.2 million and 29.5 million, respectively. In three years, monthly activity fell by 11.5 million.
The prospectus did not publish the monthly active data of the six rooms, only showing that the latest monthly active users were 25 million.
Citing iResearch data, Huafang Group said that it ranked in the top two in terms of monthly active users and monthly usage time of mobile terminals and PC terminals on all channels in the first eight months of 2021. However, in the face of the short video reduction blow of short videos that gather live content such as e-commerce, games, and reality shows, it is difficult for Pepper and six homeowners to have a competitive advantage.
The "reality SHOW live" industry has been on the decline. According to the China Internet Network Information Center (CNNIC), as of June 2021, the number of live reality TV users was 177 million, a year-on-year decrease of 8.75 million, accounting for 17.6% of the total netizens.
In order to expand users, Huafang Group has continuously launched a series of new products such as voice products such as "Hua Squeak", and launched a video social product HOLLA for overseas markets.
In terms of overseas users, as of August 31, 2021, the number of registered users of overseas products (including HOLLA and Monkey) of video social networks was 85.3 million; in the first eight months of this year, about 26.7 million new registered users of overseas products were registered.
02
Monthly income of 400 million, mainly rely on live broadcast tips
Huafang Group belongs to the enterprise of making a fortune in a muffled voice.
From 2018 to 2020, Huafang Group's revenue was 1.993 billion yuan, 2.831 billion yuan and 3.683 billion yuan respectively; in the first eight months of this year, its revenue increased by more than 25% year-on-year to 2.96 billion yuan, with an average monthly revenue of 370 million yuan.
During the Reporting Period, excluding the impact of impairment losses on goodwill and intangible assets and share-based compensation expense, the other three periods were profitable except for a net loss of $160 million in 2018.
From 2019 to the first eight months of 2021, the adjusted net profit was 210 million yuan, 370 million yuan and 260 million yuan, respectively.
During the reporting period, except for the first eight months of 2021, the proportion of live broadcast revenue in total revenue was 97.5%, and the proportion of other time points exceeded 99%. In terms of cost, anchor spending accounts for 90% of the total cost.
Its business model is easy to understand; through the anchor live broadcast content, attract users to the platform tip, Huafang Group and the anchor share the tip fee. Therefore, the number of anchor users and the degree of activity are directly related to the company's revenue.
According to the prospectus, as of August 31, 2021, the pepper platform has about 10.1 million registered anchors, with an average of 200,000 active anchors per month; in the same period, the six rooms have 500,000 anchors, and Huafang Group emphasizes that most anchors have used six rooms for more than 5 years.
In order to maintain the stability of the anchor, Huafang Group has established cooperation with brokerage companies. In the first 8 months of this year, the vast majority of Huafang Group's 500 big anchors came from brokerage companies.
With the outbreak of new live broadcast content such as e-commerce and games, the single live broadcast mode of the show is facing the dilemma of user loss. Some anchors engaged in the industry told reporters that it is becoming more and more difficult to get tips, and some peers have transformed into e-commerce live broadcasts.
On the "Black Cat Complaint" platform, there are 70 complaints about the live broadcast of peppercorns, mainly focusing on inducing the purchase of virtual currency, recharge consumption abnormalities and other aspects.
The "Measures for the Administration of Online Performance Brokerage Institutions (Draft for Comments)" researched and drafted by the Ministry of Culture and Tourism shows that online performance brokerage institutions should strengthen the constraints on contracted online performers, requiring them not to induce users to consume by means of special treatment, language stimulation, promised rebates, etc.
Taking the voice live broadcast, which currently contributes 22.1% of the revenue of Huafang Group, as an example, the revenue of this business has grown rapidly in recent years. Huafang Group quoted iResearch consulting data as saying that the market size of emerging services in audio social exploration and game accompaniment will be 15.1 billion yuan in 2020, and is expected to increase to 65.1 billion yuan in 2026 with a compound annual growth rate of 27.6%.
However, the general environment is not optimistic. In September, many game accompaniment products were removed from the shelves, and the head game accompaniment products were called to the outside world, and the game companion function was permanently removed.
Huafang Group said in the prospectus that the funds raised by the IPO will be mainly used to further diversify and enrich products, content and services in the next three years; implement marketing plans, expand domestic and foreign user groups and promote brands.
The listing of Huafang Group is imminent, and the energy of the major shareholder Zhou Hongyi has shifted to a new business of car manufacturing.
At the same time that Huafang Group submitted the prospectus, Zhou Hongyi's 360 issued an announcement to the outside world that it invested 2.9 billion yuan in Nezha Automobile, ranking the second largest shareholder.
The major shareholders are busy building cars, the main product pepper live broadcast, six room users are "cut off" by short video products, the show live broadcast encounters strong supervision, to go public Flower House Group, need to find a new growth story.