The parent company has nearly 200 million yuan in outstanding debts, and part of Youkeshu’s equity may be sold off

In recent years, the domestic cross-border e-commerce industry has developed rapidly, and brand expansion has gradually become the development vision of many companies. On the cross-border stage, a large number of well-known companies have emerged, including Savi, Anker, LightInTheBox and Youkeshu, which are all well-known brands in the industry.

However, the past two years have also been turbulent for the cross-border e-commerce industry. The epidemic and a series of rectifications of the platforms by e-commerce giants have given many sellers a roller coaster-like cross-border experience, and many Shenzhen big sellers have felt this deeply.

Recently, Youkeshu’s parent company, Tianze Information, has once again been pushed into the public eye due to its debt issues.

Youkeshu's merger and reorganization is still undecided, and Tianze Information is involved in a major lawsuit

Recently, the Nanjing Branch of Shanghai Pudong Development Bank Co., Ltd. took Tianze Information to court because of the overdue merger and acquisition loan with a principal of 189 million yuan.

Yienjun learned from the announcement recently released by Tianze Information that Tianze Information had actually published an announcement on the China Securities Regulatory Commission's Growth Enterprise Market information disclosure website as early as May 26 last year , stating that its 189 million yuan M&A loan from Pudong Development Bank Nanjing Branch was overdue.

The current situation is that Pufa Bank Nanjing Branch appealed and required Tianze Information to immediately repay the loan principal of RMB 189 million, as well as interest, penalty interest and compound interest totaling nearly RMB 2.29 million, and required Tianze Information to pay the Nanjing Branch's legal fees of RMB 400,000, with the total cost adding up to nearly RMB 200 million.

At the same time, Pufa Bank Nanjing Branch mentioned in its lawsuit that for Tianze Information’s debts, the plaintiff has the right to receive priority payment within the scope of the pledge guarantee with the 48.9991% equity interest in Shenzhen Youkeshu Technology Co., Ltd. held by Tianze Information .

This means that Pufa Bank Nanjing Branch will have the right to dispose of the pledged Youkeshu shares, and it is not impossible for Youkeshu shares to be sold.

Origin of Tianze Information's M&A loan dispute

In December 2018, Tianze Information obtained approval from the China Securities Regulatory Commission to formally implement the acquisition of Youkeshu, a major cross-border e-commerce seller. According to the acquisition agreement, Tianze Information's acquisition of Youkeshu was valued at RMB 339,997,060, of which approximately RMB 420 million was paid in cash.

At that time, the funds needed for these mergers and acquisitions were obtained by Tianze Information through loans, and it obtained merger and acquisition loans of 210 million yuan from Minsheng Bank and Shanghai Pudong Development Bank respectively . At the same time, it pledged 48.9991% of Youkeshu’s equity in the loan from Shanghai Pudong Development Bank Nanjing Branch, and pledged 51% of Youkeshu’s equity in the loan from Minsheng Bank Nanjing Branch.

However, in the first half of 2020, affected by the epidemic, the sales revenue of Tianze Information's Internet of Things business, communication technology services and software-related businesses declined, and the net cash flow from operating activities of Tianze Information's parent company continued to be negative, resulting in tight funds for the parent company's operating activities and Tianze Information's overdue situation.

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 M&A loan of Minsheng Bank, Tianze Information launched the judicial auction procedure of the "Tianze Star Network Building" under its name in October 2021. Now, Pudong Development Bank Nanjing Branch has also taken litigation measures to safeguard its own rights and interests. This is undoubtedly another test for Tianze Information!

Since the acquisition of Youkeshu, Tianze Information has officially entered the cross-border e-commerce track, and Youkeshu has become its main source of revenue. From 2018 to 2020, Youkeshu's revenue was 896 million, 3.867 billion, and 5.027 billion yuan, respectively. However, affected by the Amazon account blocking wave, Youkeshu's performance declined sharply in 2021, and Tianze Information had to adjust its business strategy to minimize losses as much as possible.

Tianze Information expects losses to exceed 1.8 billion

Affected by changes in the policy environment of the Amazon platform and fierce competition in the European and American markets, Tianze Information's cross-border e-commerce operating performance in 2021 fell sharply.

According to the performance forecast disclosed by Tianze Information at the end of January, Tianze Information's operating income in 2021 is expected to be between 1.6 billion and 1.9 billion, and the net profit attributable to shareholders of the listed company will be a loss of approximately 1.8 billion to 2.5 billion yuan , a year-on-year decline of 107%-187%.

Tianze Information stated that the main reason for the sharp decline in performance was not only the impact of changes in platform policies and the intensified industry competition, but also the fact that the goodwill formed by its subsidiary Youkeshu showed signs of impairment. At the same time, it planned to make impairment provisions for the accounts receivable and inventory of its subsidiary Yuanjiang Information.

In 2021, the policies and measures of some mainstream cross-border e-commerce platforms have been tightened, and Amazon's drastic account blocking actions have made Chinese sellers miserable. Tianze Information's subsidiary Youkeshu was not spared. According to Tianze Information's verification and confirmation, in 2021, Youkeshu's store funds on the Amazon platform were frozen by about 100 million yuan , accounting for 90% of the total balance of Amazon store funds in 2021 ; the number of blocked sites was about 400 , accounting for about 12% of the total number of active Amazon sites .

Due to the freezing of large amounts of funds, Youkeshu's annual operating funds have shrunk significantly . Coupled with the adjustment of its independent site business, Youkeshu's operating income has dropped by nearly 51% year-on-year , and its cross-border e-commerce export business has suffered large losses.

In order to minimize losses, Tianze Information is also adjusting its business strategy, including transferring and selling equity, transferring equity of its wholly-owned subsidiary Yuanjiang Information, introducing investment, and actively deploying multiple e-commerce platforms .

Multi-platform layout is becoming an important means for Tianze Information to make profits. In 2021, Tianze Information vigorously developed the Walmart platform and achieved operating income of nearly 60 million yuan, a year-on-year increase of 141.56%.

In addition to the mainstream markets in Europe and the United States, Tianze Information is also expanding its business in emerging markets such as Latin America and Southeast Asia . It is reported that in the Latin American and Southeast Asian markets, Tianze Information achieved a revenue of 200 million yuan in 2021 through the Shopee platform alone, accounting for more than 10% of the total annual cross-border e-commerce business revenue .

As a cross-border e-commerce giant, Amazon is an important mainstream platform that many sellers cannot ignore when developing cross-border e-commerce business. Tianze Information said that through multi-platform and multi-market layout , the impact of the Amazon incident on the company's overall business situation is controllable. The company may face performance fluctuation risks in the short term, but it will not continue to deteriorate in the long term.

As Amazon's control over Chinese sellers becomes increasingly strict, traditional sellers are also struggling to operate. However, Tianze Information's active expansion into other platforms and markets and its profitability may serve as a wake-up call to sellers: In the increasingly competitive cross-border e-commerce market, it is still very important to deploy multiple platforms to disperse business risks!

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