Shenzhen Dasai is caught in a financial vortex! A major lawsuit was ordered to pay nearly 200 million yuan in arrears

Youkeshu, a well-known and popular tree in the industry, has been in "constant trouble" in recent years.

Recently, Youkeshu released an announcement on the progress of overdue M&A loans and major litigation.

The announcement showed that the final verdict of Youkeshu’s “M&A loan overdue dispute case” was announced. The Nanjing Intermediate People’s Court sentenced Youkeshu to pay Pudong Development Bank the principal of 184.92 million yuan and interest, penalty interest and compound interest. In addition, Yuanjiang Information Technology Co., Ltd., Sun Borong and Jin Wei were jointly and severally liable for the company’s payment business.

The origin of the Youkeshu M&A loan dispute

In December 2018, the listed company Tianze Information (now renamed "Youkeshu") obtained approval from the China Securities Regulatory Commission to formally implement the acquisition of cross-border e-commerce giant Youkeshu.

According to the merger and acquisition agreement, Tianze Information's acquisition of Youkeshu was valued at RMB 339,997.06 million, of which approximately RMB 420 million was paid in cash.

At that time, the funds needed for these mergers and acquisitions were borrowed by Tianze Information, which obtained merger and acquisition loans of 210 million yuan from China Minsheng Bank and Shanghai Pudong Development Bank respectively, and pledged 48.9991% and 51% of Youkeshu's equity to these two banks respectively.

After Tianze Information acquired Youkeshu, Youkeshu became the main source of income and profit for Tianze Information.

Financial report data shows that in 2019, Youkeshu brought operating income of 3.121 billion yuan to Tianze Information, accounting for 80.71% of the total operating income, and brought net profit of 296 million yuan, accounting for 596.84% of the total net profit.

In 2020, Youkeshu brought Tianze Information operating income of 4.749 billion yuan, accounting for 94.48% of the total operating income, and brought a net profit of 417 million yuan.

Although Youkeshu brought brilliant results to Tianze Information in 2020, it failed to make up for the company's losses.

In the first half of 2020, affected by the epidemic, Tianze Information's sales revenue from the Internet of Things business, communication technology services and software-related businesses declined. Among them, Tianze Information's original largest business - software and information technology service business achieved operating income of 271 million yuan, a decrease of 63.33% compared with the same period last year; operating profit was -1.256 billion yuan, a decrease of 383.92% compared with the same period last year; net profit was -1.292 billion yuan, a decrease of 431.68% compared with the same period last year.

Tianze Information's net cash flow from operating activities continued to be negative, resulting in a tight fund for the parent company's operating activities and Tianze Information encountered overdue payments.

In August 2020, Tianze Information's part of the due M&A loan from Minsheng Bank was overdue, and Minsheng Bank filed a lawsuit with the Nanjing Intermediate People's Court. After mediation by the Nanjing Intermediate People's Court, the agreement stipulated that the listed company should repay the principal of the M&A loan of 5 million yuan and related interest before May 20, 2021.

At that time, in order to repay the merger and acquisition loan of Minsheng Bank, Tianze Information initiated the judicial auction procedure for the "Tianze Star Network Building" under its name in October 2021.

At the same time, Pufa Bank also sued Tianze Information to the Nanjing Intermediate People's Court, demanding that Tianze Information immediately repay the loan principal of RMB 189 million and interest, penalty interest, and compound interest of RMB 2,286,990.21.

The Nanjing Intermediate People's Court ruled in the first instance that the company should pay the principal of the outstanding debt of RMB 184.92 million and interest, penalty interest, compound interest and attorney fees of RMB 150,000 to Pudong Development Bank, and that Pudong Development Bank has the right to receive priority payment from the proceeds of the discount, auction or sale of the 48.9991% equity of Youkeshu Company pledged by the company.

However, Tianze Information was dissatisfied with the first-instance judgment and appealed to the Jiangsu Higher People's Court, requesting a reduction in part of the penalty interest and compound interest corresponding to the principal, and a corresponding reduction in the guarantor's corresponding guarantee liability.

In the end, the Nanjing High Court made a second-instance judgment on the "Youkeshu M&A Loan Overdue Dispute Case", rejected the appeal, upheld the original judgment, and it was the final judgment.

Losing the lawsuit is definitely a huge blow to Youkeshu.

Youkeshu has been making losses for three consecutive years and is in deep crisis!

As Amazon's control over Chinese sellers becomes increasingly strict and affected by the market environment, many traditional big sellers are struggling to operate, and Youkeshu is no exception.

In the past three years, Youkeshu’s net profit before and after deducting non-recurring gains and losses has been negative, and the audit report for the most recent year shows that there is uncertainty about the company’s ability to continue operating.

In 2022, Youkeshu’s revenue was 774 million yuan, a direct decrease of 56.11% compared to 2021.

From 2020 to 2022, Youkeshu's net profit attributable to shareholders of listed companies was -871 million yuan, -2.676 billion yuan and -366 million yuan respectively.

Youkeshu stated that due to unfavorable factors such as the slowdown in global macroeconomic growth, setbacks in overseas core consumer markets, and intensified competition in the cross-border e-commerce industry, the company's revenue from its main cross-border e-commerce business in 2022 fell by 60.11% year-on-year.

In 2021, Tianze Information was affected by the Amazon "account blocking" incident, and its performance was volatile. Currently, Youkeshu still has 100 million yuan of funds frozen by Amazon.

After the Amazon account blocking incident, the company set up a special working group to actively appeal to Amazon. It is also seeking cross-border arbitration, litigation and other means to do its utmost to unfreeze the frozen funds. However, the large amount of frozen funds has not yet been recovered.

According to the announcement previously released by Youkeshu, about 400 Youkeshu sites were blocked on the Amazon platform , and about 128 million yuan of store funds were frozen.

According to the 2022 annual performance report released by Youkeshu , Amazon still has 104 million yuan in the company's accounts receivable column.

Of this amount, bad debt provision reached 103 million yuan, with a provision ratio as high as 99.20%. The reason for the provision was that the platform funds were frozen and there was no sign of unfreezing.

In the past three years, Youkeshu has been experiencing ups and downs. Its performance has been hit by both internal and external market environments, and it has suffered losses year after year and has been unable to turn losses into profits. The audit report for the most recent year shows that the company's ability to continue operating is uncertain, which is worrying.

And in 2023, Youkeshu's revenue decline continued. In the first quarter of this year, its revenue was 120 million yuan, a year-on-year decrease of 47.56%; the net profit attributable to shareholders of the listed company was -21.1218 million yuan, and it has not yet turned losses into profits.

At the same time, Youkeshu may also be facing a serious inventory backlog problem. In 2022, Youkeshu's cross-border e-commerce business had a cumulative purchase of only 473 million yuan, and in 2021 it reached 1.36 billion yuan. The gap in the middle is not just a "business scale contraction" that can be covered.

Under the influence of various unfavorable conditions, Youkeshu has been issued a stock other risk warning by the Shenzhen Stock Exchange, and the company's stock name has been changed from "Youkeshu" to "ST Youkeshu".

In recent years, the cross-border e-commerce industry has experienced ups and downs. Some sellers have made a lot of money, while others have suffered heavy blows.

The Youkeshu case may serve as a wake-up call to sellers: in the increasingly competitive cross-border e-commerce market, it is still very important to find a good operation strategy to withstand market risks. At the same time, attention should also be paid to cash flow management.

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