High inventory, reliance on rebates and Langzi’s gambling, Wakaba once again hit the IPO

High inventory, reliance on rebates and Langzi’s gambling, Wakaba once again hit the IPO
In the past two years, Guangzhou Ruoyuchen Technology Co., Ltd. (hereinafter referred to as “Ruoyuchen”) once again hit the A-share door.On March 13, if Yuchen updated the pre-disclosure prospectus on the official website of the SFC, he was waiting for the meeting.The prospectus shows that the company intends to land on the Shenzhen Stock Exchange, and the sponsor institution changed from the first GF Securities to CICC Securities.Ruo Yuchen, established in 2011, is the Chinese e-commerce operator of Maison, Swisse and other mothers and babies, beauty and personal care, and health care brands.As early as August 2017, Ruo Yuchen submitted a prospectus to the SFC, but only as expected; in June 2019, Ruo Yuchen once again launched an impact on A shares.At present, Ruoyuchen, Lirenlizhuang and Yiwangyichuang are all related companies in the field of e-commerce operation. Among them, Yiwangyichuang successfully passed the meeting in September last year, and Liren Lizhuang and Ruoyuchen are waiting.status.The high inventory, low gross profit “retailer” model and heavy reliance on platforms and brands all seem to be “sucked” by Ruo Yuchen; under the new retail background, the company’s development direction has also received much attention from the capital market.This time, can Ruo Yuchen pry open the A-share door?Langzi became a shareholder. Ruoyuchen was actively preparing for the IPO. Guangzhou Ruoyuchen Technology Co., Ltd., formerly known as Guangzhou Ruoyuchen Information Technology Co., Ltd., was established on May 10, 2011 by Wang Yu and Wang Wenhui.According to public information, Ruo Yuchen is an integrated e-commerce service provider for global consumer brands. Its main businesses include online agency operations, channel distribution and brand planning, and its services include brand positioning, store operations, and channel distribution.This is not the first time Ruo Yuchen has sought to list on the A-share market.In December 2015, Ruo Yuchen once listed on the New Third Board, and within less than a year, he announced that the company had entered the listing counseling state.Five years after its establishment, Ruo Yuchen’s net profit has exceeded 30 million.From 2014 to 2016, Ruo Yuchen achieved revenue1.1.2 billion yuan, 1.8.7 billion and 3.7.8 billion, with a net profit of 345.200,000 yuan, 488.790 thousand yuan and 3415.470,000 of which, the attributable net profit in 2015 increased by 87 per year.65%.This has attracted the attention of the “gold master” listed company Longzi.On April 26, 2015, Langzi shares and Ruo Yuchen signed a capital increase agreement to complete the first round of single home1.RMB 1 trillion in financing corresponds to a registered capital of 2.5 million, and the remaining 107.5 million is included in the capital reserve at a price of 12.67 yuan.The reporter consulted Ruo Yuchen’s public transfer statement issued in August 2017 and found that Ruo Yuchen and Langzi signed a gambling agreement.Specifically, Ruo Yuchen promised that the company’s net profit in 2015, 2016 and 2017 will not decrease and be at least 31.5 million yuan, 40.95 million yuan and 54.6 million yuan.Otherwise, Langzi shares have the right to request to adjust the shareholding ratio or adjust the investment quota.But Ruoyu Yuchen did not fully realize his performance promise.From 2015 to 2017, Ruo Yuchen’s net profit was 521, respectively.310,000 yuan, 3064.760,000 yuan, barely reached 5763 until 2017.520,000.However, when signing the gambling agreement, the two parties did not cut off all the exit routes: According to the supplementary provisions of the gambling agreement, if the company plans to conduct an IPO at that time, Langzi agreed to suspend the “performance commitments and adjustments” clause of this agreement before submitting the IPO declarationIf the company’s IPO succeeds, the above clauses will become invalid from the beginning.In August 2017, Ruo Yuchen submitted his prospectus to the CSRC for the first time, and then entered the state of termination of review.The prospectus shows that Langzi is currently the “second shareholder” of Ruo Yuchen, directly holding 15 million shares, with a 20% shareholding ratio.The inventory is high, and the receivables remain high. Yu Yuchen said in the prospectus that the company’s main business includes online agency operations, channel distribution and brand planning. The first two types of business are the main sources of the company’s operating income. In 2016As of the first three quarters of 2019, they accounted for 98% of the main business income.06%, 94.98%, 91.49% and 93.28%.Currently, online generation operations are divided into a retail model and a service fee model.The reporter noted that the “price difference” is the main source of profit for the retail model and channel distribution.Ruo Yuchen stated in the prospectus that under the retail settlement method, the company’s profit source is mainly reflected in the purchase-sale difference of goods; the channel distribution’s profit source is the purchase-sale difference of goods.”Ruo Yuchen is essentially a distributor in the e-commerce field.This may result in if Yuchen’s bargaining power with the brand side is not high, the company needs to purchase commodities from partner brands for sale or to maintain cooperation.”A senior veteran told reporters.This has led to a large increase in the inventory level of Ruo Yuchen’s inventory and the inventory in the past three years. As an e-commerce operating company mainly based on “light asset” operators, the proportion of inventory assets in total assets is not low.The data shows that from 2016 to 2018, the inventory of Ruoyuchen was 8324 respectively.870,000 yuan, 1.2.3 billion yuan, 1.50ppm, the proportion of net inventory value to asset scale is 34 respectively.23%, 30.21%, 23.85%, inventory in the first three quarters of 2019 has reached 1.8.8 billion yuan, accounting for 33% of the asset budget.20%; from 2017 to the first three quarters of 2019, the inventory size was 47.53%, 22.13%, 25.35%.During the same period, Ruo Yuchen’s accounts receivable increased at the same time.From 2016 to the first three quarters of 2019, the company’s accounts receivable were 3123.270,000 yuan, 7882.730,000 yuan, 1.1.5 billion and 6388.340,000 yuan, accounting for 12 of the total assets at the end of the period.84%, 19.39%, 18.23% and 11.28%, the accounts receivable accounted for more than 90% are within one year.According to the company, at the end of September 2019, the company’s accounts receivable declined, and finally the repayment of JD.com’s receivables due to the double eleven at the end of 2018 caused the company’s receivables to be significantly reduced.It may be that Ruo Yuchen’s gross profit margin is not optimistic.From 2016 to the first three quarters of 2019, the company’s comprehensive gross profit margin was 43.12%, 33.41%, 32.79% and 32.43%, showing a declining trend.In addition, from 2016 to the first three quarters of 2019, Ruo Yuchen’s retail business gross profit margin was 41.56%, 31.21%, 31.75% and 32.83%, the gross profit margin of channel distribution was 36.27%, 23.84%, 20.70% and 20.25%. Except for the increase in the retail business gross profit margin in the first three quarters of 2019, the average gross profit margins of the two major revenue businesses declined during the other reporting periods.This explanation of the company is due to the difference in gross profit margins under each model, and the change in the proportion of different business models in each period of the reporting period caused the company’s overall gross profit margin to fluctuate.”Gross margin is low and overall it is normal.”This is related to the operating cost of the brand, the cost of acquiring e-commerce platform traffic, and the gradual saturation of the e-commerce service provider market.The above-mentioned person analyzed the reporter.”The bargaining power is low, the performance relies heavily on the brand rebates and the gross profit margin drops, but if Yuchen’s net profit is relatively stable.From 2016 to the first three quarters of 2019, the company achieved a net profit of 3064.760,000 yuan, 5763.520,000 yuan, 7741.740,000 yuan and 5006.200,000 yuan, the net interest rate is 8.23%, 8.59%, 8.32% and 7.98%.However, Ruo Yuchen’s operating cash flow situation does not match the net profit.From 2015 to the first three quarters of 2019, Ruo Yuchen’s net cash flow from operating activities was -4978, respectively.790,000 yuan, -2679.700,000 yuan, -2511.110,000 yuan, 6176.390 thousand yuan and 169.660,000 yuan.”This can be related to the platform rebate policy.”The original person told reporters.”Obviously, if Yuchen stated in the prospectus that the brand side is incentivizing sales and controlling the price system, it usually gives the purchaser a certain percentage of purchase rebates based on the completion of the procurement target, or the cost of the sales process (full reductionExpenses, coupons, etc.), the difference in sales at a specified price compensates the purchaser in the form of a sales rebate, which is a business practice of the brand side to promote product sales.Rebate is the normal operation of e-commerce on behalf of operators. OneNet, OneCreat, and Liren.com all hinted in the prospectus that Ruoyuchen is no exception.From 2016 to the first three quarters of 2019, the purchase rebate amount of Ruo Yuchen’s suppliers was 2,695.140,000 yuan, 2429.380,000 yuan, 3975.390 thousand yuan and 2801.220,000 yuan, the sales rebate amount was 2,573.410,000 yuan, 6561.820,000 yuan, 1.1.7 billion and 9281.380,000 yuan.For e-commerce operators such as Ruo Yuchen, “rebate” is a sensitive word.Its main beauty, Lizhuang, denied the initial public offering, and the opinion issued by the Development and Examination Committee at that time was “questioning whether the accounting treatment of rebates does not meet the accounting standards, the interim calculation of rebates, and whether the rebates are withdrawn is reasonable.”””, Yu Yuchen operated 98 brand stores such as Mei Mei Jing, Li Shi Delin, THREE, etc., relying heavily on brands and platforms.The reporter noticed that South Korean beauty and skincare brand Mediheal was an important source of revenue increase for Ruo Yuchen’s online agency operation-service fee model and channel distribution in 2017 and 2018, but in 2019 the brand’s revenue andThe above sales have dropped significantly.In this regard, the company explained that because Mediwair mainly distributes channels through JD.com, the Vipshop platform realizes final sales from the platform; and in the first three quarters of 2019, JD.com increased purchases of Mediwair products from other channels, Leading to the issuer ‘s decrease in the distribution revenue of the Mediflex brand channel.If Yuchen ‘s distribution customers are mainly e-commerce customers such as JD.com, Vipshop, Tmall Supermarket, etc., this is also an uncertain factor facing him. If the platform unilaterally reduces the purchase price, extends the burden period, etc., or otherThe cooperation of authorized agents may lead to a decline in the company’s distribution business revenue or excessive use of working capital.Low bargaining power, relying on brand rebates, if Yuchen is thinking of a way.The reporter noticed that once again the impact on the IPO, if the funds raised by Yuchen quietly added a “new brand incubation training platform construction”, the project is expected to have a total investment of 2.70 billion, accounting for 7.1.7 billion 37.67%.The remaining items are the integrated construction of agency brand marketing services, the construction of e-commerce operation supporting service center, the construction of enterprise information management system and the supplementary working capital.Sauna, Ye Wang Zhang Zeyan editor Zhao Zeyue Cai Zhou proofreading Liu Baoqing reporter email: zhangzeyan @ xjbnews.com