On October 25, Huafang Group, the operator of Zhou Hongyi's live broadcasting platform, submitted a prospectus for listing in Hong Kong, with CCB International and Haitong International as the joint sponsors of the company.
According to the prospectus, Huafang Group is mainly composed of three business lines: six rooms of the PC live broadcasting platform launched in 2006, the sichuan pepper live broadcast launched in 2015, and the overseas platform HOLLA Group acquired in 2020.
According to the data released in the prospectus, in the eight months from 2018 to 2020 and until August 31, 2021, huafang group's revenue was 1.993 billion yuan, 2.831 billion yuan, 3.684 billion yuan and 2.96 billion yuan, respectively, gross profit was 302 million yuan, 706 million yuan, 1.011 billion yuan and 820 million yuan, and the gross profit margin should be 15.1%, 24.9%, 27.5% and 27.7%, and the net profit was -187 million yuan, respectively. It was $191 million, -$1,525 million and $232 million, while adjusted net profit was -$158 million, $211 million, $367 million and $260 million, respectively.
In 2019, the price of peppercorns and six rooms was merged, when the price of six rooms was 3.4 billion yuan, the price of peppercorns was 5.1 billion yuan, and all shareholders of peppercorns exchanged peppercorns for equity in six rooms. After the completion of the transaction, all shareholders of Huajiao accounted for 60% of the equity of the restructured entity, and Songcheng Performing Arts and strategic shareholders accounted for a total of 40% of the equity of the restructured entity.
At present, the largest shareholder of Huafang Group is Zhou Hongyi, holding 38.21% of the shares, and Songcheng Performing Arts is the second largest shareholder, holding 37.06% of the shares. After the completion of the IPO, both shares will be diluted to less than 30%.
According to the iResearch report, according to the cumulative number of mobile device downloads during the track record period, Huafang Group ranked first among all online entertainment live broadcasting platforms in China.
If Huafang Group is successfully listed, this means that Zhou Hongyi has reaped another IPO. Previously, he gained three listed companies of Qihoo 360, 360 Finance and Master Lu.
<h1 class="pgc-h-arrow-right" data-track="8" > Zhou Hongyi's live broadcast dream</h1>
Business tycoons cross-border play live broadcasting in 2015, but the live broadcast industry can be traced back to 2008, the 9158 video community first launched live video, followed, YY live broadcast and six questions have been online, before 2010 live broadcast market, is the WORLD of PC end show live broadcast. After 2010, live broadcasting platforms competed to launch the Web version of mobile APP, began to explore the development model of mobile live broadcasting, and mobile YY, Crazy Live, Douyu Live and Battle Flag Live were also launched.
In 2015, the live broadcasting industry almost copied the grand situation of the Hundred Regiments War that year, hundreds of startups poured into the market in a short period of time, and BAT, Xiaomi, 360, LeTV, NetEase and other companies also followed up, Tencent laid out Penguin Live, Fancy Live, Tencent Live, NOW; Alibaba's live broadcast platform has covered Taobao Live, Youku Live, Lai Crazy Live; Baidu also has Baixiu Live, ALa Live...
Zhou Hongyi stepped into the field of live broadcasting at this time, as a rookie in the field of live broadcasting, Qihoo 360's peppercorn live broadcast entered the live broadcast market in June 2015.
In the field of live broadcasting, Zhou Hongyi's ambitions have never been hidden. At the time of the "Hundred Broadcast Wars", the intention of "Pepper Live Broadcast" for the position of industry leader was very obvious, and he himself spared no effort to promote it.
The day after the launch of the peppercorns, Zhou Hongyi said on Weibo, "Interesting, I am going to spend five minutes a day on the peppercorns to share the entrepreneurial experience and product experience, will you come to see?" In half a year, he has published more than 50 microblogs and more than 40 circles of friends related to peppercorns. Subsequently, the live broadcast of peppercorns has been highly praised by Zhou Hongyi, who once used peppercorns to live broadcast "BMW on fire", which can be called "using life" to promote the peppercorn platform.
In order to divert the live stream of peppercorns, in March 2016, the 360 secure browser with more than 400 million monthly active users announced the launch of the "one-click live broadcast" function, in addition to the 360 browsers, the daily PV of more than 700 million 360 navigation opened up a special entrance location for the live broadcast of peppercorns, helping the live broadcast of peppercorns to take the lead in seizing the live broadcast track.
Under the efforts of Zhou Hongyi, peppercorn live broadcast also ushered in a period of rapid growth, Analysys data shows that in May 2016, the top 500 APP list of video live broadcasting boom growth, of which pepper performance, its month-on-month growth rate reached 191%, far more than similar products 50% growth, the growth rate is the first pan-entertainment live broadcast platform.
After Li Xiang joined Qihoo 360 and brought a large number of star resources, Pepper Live continued to attract fans by doing interviews with stars and letting stars be the anchors of the program. In September 2016, the peppercorn night held by Hua pepper live, Fan Bingbing, Zhang Jike and other star platforms, became the largest award ceremony in the live broadcast industry that year, and the pepper live broadcast gradually became an industry oligarch, with a user volume of more than 200 million, and the monthly active users were as high as 40 million.
Zhou Hongyi broke his heart for the live broadcast of peppercorns, and it is reported that Zhou Hongyi monitored the live broadcast every day before going to work. 360 insiders have said that "Zhou Hongyi often scolds people in the WeChat group that discusses the live broadcast business." It can be seen that Zhou Hongyi has invested great efforts and expectations for the live broadcast of peppercorns.
The reason why Zhou Hongyi is so obsessed with live broadcasting is nothing more than the anxiety he has caused in the face of the mobile Internet.
Zhou Hongyi, who lagged behind in the era of mobile Internet, witnessed the strong rise of competitors in the same period: Tencent held the two major social entrances of QQ and WeChat, creating a huge empire in the era of mobile Internet, and Lei Jun's use of Xiaomi mobile phones as the core layout of intelligent hardware has achieved initial results...
At this time, 360 still has not found the core play of mobile Internet, before entering the live broadcast industry, Zhou Hongyi also laid out search and mobile phone business, but the results were not ideal.
In the PC Internet era, 360, which started with free antivirus software, occupies the PC market, in the face of the mobile Internet, the advantages of 360 are decaying, sitting on the traffic brought by security services, 360 is difficult to achieve traffic monetization like Tencent and Ali.
For 360, the product tool attribute of the backbone business is too heavy, and after reaching the mobile terminal, it is in urgent need of a product with strong user viscosity. When the live broadcast outlet came, Zhou Hongyi believed that it helped 360 grasp the last "straw" ashore in the mobile Internet era. He once said: "In any industry, a company to become a king, just like in the era of Weibo, there must be an account, a big V, today we must also learn to use live broadcasting, the latest expression of the Internet." ”
<h1 class="pgc-h-arrow-right" data-track="23" > how is the peppercorn performing today? </h1>
In addition to the live broadcast of peppercorns, 360 has also launched water drops live broadcasts, fast videos, and also invested in Wang Sicong's Panda TV, but for various reasons, peppercorn live broadcasts are the only fruits left today.
However, in the end, because the positioning has long deviated from expectations, this live broadcast business, which was once attached great importance to Zhou Hongyi, has gradually faded out of Zhou Hongyi's sight.
At the beginning of the launch, Hua Pepper imitated the foreign streaming media live broadcast application Periscope, and most of the project team was composed of 360 media people, and Zhou Hongyi's expectation was a product with social attributes: "Hua Pepper is based on Weibo, WeChat and the third social platform that uses video to communicate with people. After several transformations, Pepper Live has also ranked among the first echelon of live broadcasting on the show, but it is not the product that Zhou Hongyi desires, and without Zhou Hongyi's platform, public attention has begun to decrease."
Now on the market, the current business status of peppercorns has also been disclosed. According to the prospectus, as of August 31, 2021, the cumulative number of registered users of Peppercorns reached 207 million. In 2018, 2019, 2020 and the eight months ended August 31, 2021, the average monthly active users of Peppercorns were 41 million, 23.6 million, 27.2 million and 29.5 million, respectively. As of August 31, 2021, Hua pepper had about 101 million registered anchors, and for the eight months ended August 31, 2021, There were more than 200,000 average monthly active anchors.
In 2019, Peppercorn merged with six rooms. Six Rooms is the flagship PC product of Huafang Group, with its own mobile applications, including Six Rooms Live, Pomegranate Live and Flower Room Live. As of August 31, 2021, the six rooms have 500,000 anchors and a cumulative registered user of 77.3 million, most of which have been using the six rooms for more than five years.
The profit model of Huafang Group is similar to that of the entire live broadcast industry, basically relying on users to tip the anchor, and the platform will take another profit. As for costs, the vast majority of Huafang Group's sales costs are the revenues from virtual tipping that it shares with anchors or anchor brokerage companies on live streaming services. From 2018 to 2020 and the first eight months of this year, the proportion of anchor costs to revenue in each period was 74.6%, 67.8%, 66.4% and 66.1%, respectively, showing a decreasing trend year by year.
As of August 31, 2021, Huafang Group had 372 million registered users, and a large proportion of active users in the first eight months of 2021 were aged 35 and below; the average monthly active users were 59.9 million, and the retention rate of paid users of Huali and Six Rooms was 78.8% and 66.1% respectively.
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<h1 class="pgc-h-arrow-right" data-track="32" > the live broadcasting industry has changed</h1>
At this time, the competitive landscape of the live broadcasting industry is very different from that of a few years ago, and the live broadcasting platforms that were born together in the past, such as Yingke, Douyu and Huya, have long been listed.
From the perspective of the industry, the stock prices of several social pan-entertainment companies currently listed are not ideal. In addition to Kuaishou, Station B, Momo and other companies can achieve a market value of 10 billion + yuan, the first share of the Hong Kong Stock Exchange live broadcast has fallen from 10 billion market value to more than 3.1 billion Hong Kong dollars, after the merger of Huya Douyu failed, the total market value evaporated by 10 billion US dollars.
Relatively speaking, live broadcast platforms with strong development momentum, such as Douyu and Huya, have a clear positioning and corresponding advantages in content. Peppercorn Live has transformed from the initial news self-media into a national show, and has been continuously explored in the fields of pets, outdoors, dancing, games, talk shows and other content areas, but it still has not formed a unique competitive representative content, and in 2018, it launched a game live column, but it did not cause great waves.
According to the data of the report, as of June 30, 2021, the average monthly active users of Yingke Interactive Entertainment reached 46.43 million, in the second quarter of 2021, the average quarterly MAU (monthly active users) of Douyu Mobile terminal was 60.7 million, the MAU (average monthly active users) of Huya Live Mobile end reached 77.6 million, and the annual revenue of the three companies on the scale of revenue was about 10 billion, far higher than that of Huazhu Live, and whether the backward Huafang Live broadcast could get the ideal valuation is still unknown.
At the same time, with the gradual disappearance of the mobile live broadcast dividend, short video platforms based on Douyin and Kuaishou, social platforms such as B station and audio platforms are accelerating into the live broadcast track, further intensifying the fierceness of market competition, and how should the belated Huafang Group counterattack in the future, Zhou Hongyi may have to work harder.