Chinese online re-invest 1.47 billion layout QR target company revenue depends on a single game

according to the data disclosed in the audit report, Chenzhike's current net book assets are only 296 million yuan. According to the summary of the report on issuing shares and paying cash for asset purchase and related party transactions released by Chinese online, the company plans to acquire the remaining 80 per cent stake in Chenzhike at a consideration of 1.473 billion yuan, achieving 100 per cent holding.

less than a year later, Chinese online twice increased its stake in Shanghai Chenzhike Information Technology Co., Ltd. (hereinafter referred to as Chenzhike). After the completion of the acquisition, the latter became a wholly-owned subsidiary of Chinese online. The reporter also noticed that while buying at a premium of 5 times, Zhu Ming, chairman and CEO of Chen Zhike, the subject of the transaction, also made a high performance commitment, that is, the net profit of Chenzhike in 2017, 2018 and 2019 (after deducting Fei) was not less than 150 million yuan, 220 million yuan and 264 million yuan respectively.

in the eyes of the outside world, Chenzhike, which was still in a state of loss in 2015 and made a net profit of less than 100 million yuan even though it made a big profit in 2016, is at risk if it wants to achieve the above performance commitment.

< strong > five times premium acquisition performance promises risk < / strong >

according to the data disclosed in the audit report, Chen Zhike's current net book assets are only 296 million yuan. According to the summary of the report on issuing shares and paying cash for asset purchase and related party transactions released by Chinese online, the company plans to acquire the remaining 80 per cent stake in Chenzhike at a consideration of 1.473 billion yuan, achieving 100 per cent holding. Among them, 450 million yuan will be paid in cash, 1.023 billion yuan will be paid by issuing shares, and 64.02 million shares will be issued according to the share issue price agreed by both parties.

that is to say, Chinese online values Chenzhike as a whole at a valuation premium of 5 times. The acquisition at a high premium will lead to an increase of 1.392 billion yuan in goodwill of listed companies. after the completion of the transaction, the goodwill of listed companies accounts for 31.52% of the total assets of listed companies in the preparation for the examination on May 31, 2017.

it is worth mentioning that in December 2016, Chinese online acquired a 20% stake in Chenzhike with a consideration of 250 million yuan, which calculated that the overall valuation of Chenzhike at that time was only 1.25 billion yuan, while just eight months later, Chenzhike's valuation has reached 1.841 billion yuan.

the reason behind the short-term increase in the valuation of Chenzhike, the subject of the acquisition, has aroused concern and discussion from the outside world. In response, the reporter called Wang Jingjing, the secretary of Chinese online on September 10, 2017, who said, "as early as August 2016, we decided to invest 20% of Chenzhike. In November of the same year, the company completed its audit and the board of directors adopted the investment resolution." It has been more than a year since the initial investment. During this period of time, from the original operation of several games to now have more than 30 IP and simultaneously develop a number of games can be seen, Chenzhike is growing. "

while buying at a premium of 5 times, Zhu Ming, chairman and CEO of Chenzhike, the transaction object, also made a high performance commitment. According to the data disclosed in the audit report, Chenzhike promised that the net profit for 2017, 2018 and 2019 (after deducting non-profit) would not be less than 150 million yuan, 220 million yuan and 264 million yuan respectively.

however, to the outside world, the achievement of this performance commitment is seen as risky. According to the financial data disclosed in the draft reorganization, Chenzhike achieved operating income of 20.33 million yuan, 193 million yuan and 98.82 million yuan respectively in 2015, 2016 and 2017, with corresponding net profits of-17.63 million yuan, 97.11 million yuan and 44.98 million yuan, respectively. To the outside world, Chenzhike, which was still losing money in 2015 and made a net profit of less than 100 million yuan even though it made a big profit in 2016, is at risk if it wants to meet its performance promise.

while consulting the data, the reporter noticed that the reason why Chenzhike was able to turn losses into profits in 2016 is closely related to the game "Battlefield double ponytail". According to the data disclosed by the audit report, from January to May 2017, the accumulative total recharge of "Battlefield double ponytail" in mainland China was 110 million yuan and 77.05 million yuan respectively, contributing 83.5774 million yuan and 60.7066 million yuan respectively to the mobile game business of Morning Science. Account for 62.32% and 85.81% of the total game revenue, respectively.

< strong > income dependence on a single game has been questioned by the Shenzhen Stock Exchange < / strong >

although Chen Zhike claimed that the game business revenue mainly comes from the "White Cat Plan", "New Flower Thousand bones" and "Battlefield double ponytail", but learned from the "Chinese online: issuing shares and paying cash to purchase assets and related transactions independent financial consultant's report (revised version)". At present, only Battlefield double ponytail is still running online, and the other two games are out of operation in August 2016 and February 2017, respectively.

as of May 31, 2017, the Battlefield Shuangponytail registered more than 6.1129 million people, the cumulative number of paid households was 663700, and the cumulative recharge was 188 million yuan. On the face of it, the "Battlefield double ponytail" has achieved good results, but an industry insider who spoke on condition of anonymity told the reporter that compared with other competitive mobile games in the same industry, the paid performance of "Battlefield double ponytail" is only "medium".

not only that, the reporter found from the "Chinese online: independent Financial consultant report on issuing shares and paying Cash for Asset purchase and related transactions (revised)" that since 2017, the number of monthly active users of Battlefield Shuangponytail has dropped from 1.0357 million in December 2016 to 575300 in May this year, while the corresponding ARPPU has also dropped from 304.32 yuan to 107.88 yuan.

in the view of Wang Pei, general manager of Suotuo.com Game Division, there is a high risk for enterprises that rely too much on one product as a source of income. Because the revenue model is too single, the anti-risk ability is relatively poor, if there is a problem with the popular style game in the future, then the company's entire revenue will be affected, the problem is still quite serious.

Jin Yinsong, investment director of Dayin Fund, shares the same opinion with Wang Pei. In an interview with reporters, he said: "if enterprises rely too much on a single game, the risk will be very high." The game market is changing every day, and players are changing every day. The commercial success of a game will be affected by many factors. If the popular game of the enterprise is not loved by the players in the future or the players are no longer willing to pay, then the profits of the enterprise will decline sharply. "

in fact, in the letter of Inquiry on the restructuring of Chinese online Digital Publishing Group Co., Ltd. Issued by the Shenzhen Stock Exchange on August 25, a series of 16 questions were asked about the restructuring scheme design, related party transactions and equity changes, business conditions, business qualifications, operational compliance and risks, including Zhu Ming's high performance commitment. Chinese online is required to analyze the basis and realizability of performance commitments.

on Sept. 4, Chinese online replied that Chenzhike's operating performance increased greatly in 2017 compared with the same period last year; the company gained a good historical accumulation in the secondary industry; the company has sufficient game IP reserves, and the reserve game has a good market foundation; and the revenue of other businesses (intermodal games, advertising business and third-party live broadcast business) will also remain stable. The company has taken a variety of measures to further improve the performance of the game; the secondary industry has a good development prospect in the future.

Edit: mary