On the one hand, it is the net profit attributable to the mother of the continuous loss, and on the other hand, the personnel changes of the top management and the continuous reduction of the major shareholders. At the end of 2021, it is still unknown whether Xuanya International can improve its operating conditions
Lu Gong, a researcher at Investment Times
In today's era of Internet big data, traffic plays a crucial role in the success of business. According to the "Statistical Report on the Development of the Internet in China", with the continuous increase of the base of netizens, the growth rate of the scale of netizens has gradually shown a slowdown trend. As of June 2021, the number of Internet users in China reached 1.011 billion. This also means that the Internet dividend has almost peaked, and online traffic is no longer available.
In this context, as an advertising and marketing company transforming to the Internet, Xuanya International Marketing Technology (Beijing) Co., Ltd. (hereinafter referred to as Xuanya International, 300612.sz) will undoubtedly face more new challenges.
The researchers of the Investment Times noted that since the strategy of transformation and upgrading to operators of marketing technology was proposed in early 2019, Xuanya International has continued to increase the transformation and upgrading of the company. In June 2020, the company released the all-scenario intelligent application technology platform "Chiron Engine", and recently sought financial support for projects such as technology platforms.
On the evening of October 21, 2021, Xuanya International disclosed its intention to issue shares to specific targets. The target of this offering is no more than 35 specific targets that meet the requirements of the CSRC, and the total amount of funds raised does not exceed 30,000 yuan, and after deducting the issuance fee, it will be planned to be used for the chilang technology platform upgrade project, the interest e-commerce marketing center project, the supplementary working capital and so on.
However, Xuanya International, which is on the road of transformation and upgrading, is not so smooth. In addition to the net profit attributable to the mother, which has fallen into losses since 2020 and is still a turnaround in the first three quarters of 2021, there are stock prices that have fallen all the way after peaking in late 2020, the departure of new executives for less than two years, and the continuous reduction of major shareholders.
In response to the above situation, the researcher of the Investment Times email communication outline asked the relevant departments of the company, and as of press time has not received a reply.
The loss in the first three quarters was 16 million yuan
Xuanya International was established in January 2007, and landed on the capital market ten years later, and its main business is integrated marketing. In the early days of its establishment, the company focused on traditional marketing, and then gradually entered the field of digital marketing, with its main target customers covering automotive, Internet and information technology, manufacturing and other industries.
It is worth noting that due to the impact of the epidemic, Xuanya International experienced its first loss since its listing in 2017 in 2020, and as of the first three quarters of 2021, the company has still not turned a loss into a profit.
According to the third quarter performance report of 2021 disclosed by Xuanya International a few days ago, although the company's revenue in the first three quarters of this year increased by 61.27% year-on-year to 603 million yuan, the net profit attributable to the mother in the same period continued its continuous downward trend since 2018, with a year-on-year decline of 43.05%, and the scale of losses expanded compared with the same period of the previous year, at -0.16 billion yuan.
The reason for Xuanya International's continued loss situation in 2020 and the first three quarters of 2021 may not be completely attributable to the impact of the epidemic in early 2020. "Investment Times" researchers combed the company's recent financial reports and noted that since the second year after the listing, the performance of Xuanya International has begun to decline sharply, and the operating income has dropped from 505 million yuan in 2017 to 369 million yuan in 2018 and 354 million yuan in 2019. Although the revenue in 2020 rebounded to 619 million yuan, it turned profit into loss in the same year, and the net profit attributable to the mother was -0.29 billion yuan. Moreover, by the first three quarters of 2021, the company's net profit attributable to the mother still did not turn a loss into a profit.
Or affected by performance, the company's stock price has also peaked at 50.66 yuan / share since August 2020, and as of the close of trading on November 4, 2021, Xuanya International has only quoted 13.25 yuan per share, and the share price per share has shrunk by more than 30 yuan in more than a year.
The growth of Xuanya International's operating income and net profit attributable to the mother
Source: Company earnings
The new executive left less than two years in office
In addition to the performance of continuous losses, the senior management of Xuanya International has also changed significantly in recent years. At the beginning of October 2021, Xuanya International issued an announcement that it had recently received a written resignation report submitted by Liu Yang, a director and chief executive officer (president) of the company. Due to personal development reasons, Liu Yang applied to resign from the above positions and will no longer hold any positions in the company and its subsidiaries thereafter.
In fact, as early as two years ago, the board of directors of Xuanya International had just undergone a "big change" in personnel.
In November 2019, Zhang Xiubing, the actual controller of Xuanya International, resigned as chairman of the board, director, chairman of the strategy committee, member of the nomination committee, etc. of the company, and has since ceased to hold any position in the company. Another actual controller of the company, Wanli, resigned as a director of the company and only served as a financial manager. At the same time, the company's director Yan Guizhong, general manager Wu Tao and chairman of the board of supervisors Yu Weijie also submitted their resignations on the same day.
Since then, Xuanya International has appointed Liu Yang as chief executive officer (president) and Wang Yazhuo as vice president and chief technology officer, and elected Wang Xiaowen as chairman of the supervisory board. In addition, Wu Tao, Liu Yang and Ren Xiang were elected as non-independent directors of the third board of directors, and Wu Tao was elected as the chairman of the third board of directors. In just one month, Xuanya International's directors and supervisors completed the "great blood exchange".
It is interesting to note that Liu Yang, who recently submitted his resignation application, was just appointed as the chief executive officer (president) in the "great blood change" of personnel two years ago, and was also elected as a director. So, why did Liu Yang propose to leave his post after less than two years in office?
Major shareholders continue to reduce their holdings
In addition, as of the close of trading on November 4, 2021, the total market value of Xuanya International was 2.15 billion yuan, which was only 30% of the company's last market capitalization peak of 7.54 billion yuan, and only more than a year had passed.
Another aspect of Xuanya International's stock price and the continuous decline in the company's market value is the continuous reduction of shares held by the company's major shareholders holding more than 5%.
During 2020, Beijing Orange Power Consulting Center (Limited Partnership) (hereinafter referred to as "Orange Power"), one of the major shareholders of Xuanya International, reduced its holdings by a total of 7.281 million shares, accounting for 4.58% of the total share capital of the company; during the year, Jinfeng Yinhuang reduced its holdings by a total of 5.27 million shares, accounting for 3.31% of the total share capital of the company; and Beijing Wei'an Zhonghe Consulting Center (Limited Partnership) reduced its holdings by a total of 12.85 million shares, accounting for 8.08% of the total share capital of the company. In 2020, the three major shareholders reduced their holdings by a total of 25.401 million shares, accounting for 15.97% of the company's total share capital.
It should also be noted that the reduction of shares in Orange Dynamics, one of the company's major shareholders, is still continuing. According to the latest announcement, Orange Power reduced its holdings in the company by about 24,100 shares from September 3, 2021 to September 7, 2021, accounting for 0.02% of the total shares of the company, and the time of the reduction plan has passed.