Being owed more than 80 million, Damai went to court with the debtor!

Since ancient times, lawsuits between big sellers have never stopped, but they are mostly sued as defendants. This time, Jihong shares, as the plaintiff, sued Feiyasha and asked the other party to pay the equity transfer fee and late payment fees. What is going on? At the same time, many shareholders are also worried about whether Jihong shares can get back the more than 80 million yuan owed? Will it affect the company's performance?

Jihong shares are owed more than 80 million yuan in equity transfer funds

A few days ago, ChatGPT became popular. Xiamen Jihong Technology Co., Ltd. (hereinafter referred to as "Jihong") was one step ahead of other companies and applied it to cross-border e-commerce business such as artificial intelligence product selection and intelligent advertising delivery. Many industry insiders praised the management's speed and paid more attention to Jihong. Recently, a lawsuit between Jihong and Fiyasa has attracted the attention of many people.

It is reported that Jihong Holdings sold 90% of its subsidiary's shares to Feiyasha (Xiamen) Import and Export Co., Ltd. (hereinafter referred to as "Feiyasha"), a company established in 2017 and located in Jimei District, Xiamen. They mainly engage in the import and export of various commodities and technologies. At present, the information on the relevant platform shows that the company has 4 holding companies, and Beijing Longyu Star Technology Co., Ltd. (hereinafter referred to as "Longyu Star"), a subsidiary of Jihong Holdings, is one of them.

However, things did not develop as smoothly as expected. After the two parties signed the agreement, Feiyasha did not perform in accordance with the agreement signed by both parties. Jihong Co., Ltd. has not received the third payment in the agreement. Therefore, Jihong Co., Ltd. sued Feiyasha in court as the plaintiff, requiring Feiyasha to pay Jihong Co., Ltd. 89.082 million yuan in equity transfer funds and 2.67246 million yuan in overdue payment fees (based on the third installment of equity transfer funds, calculated according to the market quoted interest rate of 3.65% from the date of the lawsuit to the actual payment date, currently temporarily calculated as one month). The above fees totaled 89.349246 million yuan.

At present, this equity transfer contract dispute case has been accepted by the Haicang District People's Court of Xiamen, and the subsequent progress of the case remains to be seen.

The dispute between Jihong and Feiyasha began in 2020. On November 6 of that year, Jihong and Feiyasha signed the Equity Transfer Agreement on Longyu Star. In the agreement, it was agreed that Jihong would transfer 90% of its equity in Longyu Star to the defendant Feiyasha for RMB 172.71 million, and Feiyasha would pay the equity transfer fee in three installments.

Among them, the first installment of equity transfer payment of 9.09 million yuan will be paid within 15 natural days after the signing of the agreement; the second installment of equity transfer payment will be paid before December 31, 2020; the third installment of equity transfer payment of 89.082 million yuan will be paid before December 31, 2021.

In order to advance the process of equity transfer, on December 28, 2020, Jihong Co., Ltd. completed the equity change registration procedures at the Market Supervision Administration as agreed, and changed the registration of 90% of its equity in Longyu Star to Fiyasha. However, Fiyasha only paid the first and second installments of the equity transfer payment, totaling 83.628 million yuan.

Feiyasha has not paid the third installment of equity transfer payment. The announcement revealed that Jihong shares had urged Feiyasha to pay the money many times, but Feiyasha has not paid the remaining equity transfer payment of 89.082 million yuan. Therefore, Jihong shares took Feiyasha to court, hoping that she would pay the relevant amount as soon as possible.

Obviously, 80 million is not a small amount. When Jihong Co., Ltd. announced the major lawsuit, not only the sellers were concerned, but also the shareholders of the company were concerned about whether their interests would be damaged.

If more than 80 million yuan cannot be recovered, will Jihong Shares’ performance be affected?

When a seller saw this, his first reaction was, "Is Jihong Shares going to fail? Is it selling its subsidiaries?" When the company's shareholders saw this, they asked, "If the 80 million yuan cannot be recovered, will the accounting be recorded as bad debts? Will it affect the company's performance?"

The editor learned that Longyu Star was founded in 2016 and is currently a service provider focusing on comprehensive solutions such as packaging and printing machine marketing and promotion for fast-moving consumer goods. In the introduction of a certain platform, Longyu Star mentioned that it is a powerful traffic aggregation and optimization platform, mainly providing tens of millions of traffic every day to alliance advertisers and direct customer advertisers.

Comparing the company's selling price and business, it seems that the company's ability to attract money is still good. So why did Jihong sell its subsidiary? Is the sale of equity due to lack of money?

Judging from the data, Jihong's performance may not be as impressive as in the previous two years. While many big sellers are busy disclosing performance forecasts, Jihong has not disclosed it. In the performance forecast of Jihong for the first three quarters of 2022 that the editor has learned, Jihong's revenue for the first three quarters of 2022 was 3.936 billion yuan, an increase of 100 million yuan compared with the same period last year; the net profit attributable to the parent company was 233 million yuan, which was a significant decrease compared with last year.

You know, Jihong's performance mainly relies on its cross-border e-commerce business. The current decline in profits may be partly due to the cross-border e-commerce business. A data from Jihong shares shows that the company's cross-border e-commerce advertising expenses have been growing. Advertising expenses in 2021 were as high as 1.383 billion yuan, mainly due to increased advertising expenses for cross-border e-commerce business, and in the first half of 2022, the company's advertising expenses reached 730 million yuan. It can be said that the company's advertising expenses have been growing.

Jihong shares are in a state of being attacked from both sides, and the impact of the macro environment may also be an important factor affecting its own profits. In the past two years, many platforms including SHEIN have made efforts in Southeast Asia to seize the cross-border e-commerce market and have achieved good results. Shopee and Lazada, which have already entered the Southeast Asian market, are also working hard to consolidate their positions.

In addition, Jihong shares have not been deeply engaged in cross-border e-commerce business. On the contrary, it is vigorously developing cross-border service business and launching Jimiao Cloud, but it seems that it has not made much splash yet. At the same time, the company is also vigorously developing liquor, e-cigarettes and live broadcasting businesses. Overall, the profitable business has not achieved significant growth, but it feels a bit like sowing seeds everywhere.

But overall, the company's profits should not be greatly affected by the equity transfer payment, and the sale of the subsidiary may be for its own development. In response to the issue of equity transfer payments that many shareholders mentioned, Jihong shares also responded that if the accounts cannot be recovered, bad debts will be accrued, and all accruals will be made in a timely manner, and the company's performance will not be at a loss. In this way, Jihong shares' profits in 2022 will not be too bad.

Jihong Shares

Subsidiaries

Equity Transfer