All remaining shares are sold! Shenzhen Big Sell has new moves

Compared with the previous peak season, the cross-border circle, which is in the off-season, seems particularly quiet recently. During this period, Shenzhen's big seller Anke Innovation has quietly done something big. It is reported that Anke Innovation is about to sell all its remaining shares to its parent company Yinzhijie for 65.394 million.

All remaining shares of Anke Innovations were sold

It is understood that Yinzhijie and Anke Innovation's minority shareholders have signed an "Asset Subscription Agreement". The company plans to use its own funds of 65.394 million yuan to acquire 36.33% of the shares held by minority shareholders . After the completion of this transaction, Anke Innovation will become a wholly-owned subsidiary of Yinzhijie.

Regarding the reason for acquiring the remaining shares of Anke Innovation, Yinzhijie pointed out in the announcement that it was to ensure the sustainable and stable development of Anke Innovation and further enhance Yinzhijie's profitability.

As a major seller with home security as its main product category, Anke Innovation has been using its product R&D team to accurately identify customer needs, develop and sell various types of home security and daily 3C electronic products since its establishment in 2014. It owns multiple brands including ANNKE, VACOS, EASEHOLD , and its products are popular in many countries.

At present, Anke Innovation provides products to consumers in more than 80 countries and regions around the world , and has become a leader in home security products in Europe and the United States. Anke Innovation has a place on third-party platforms, self-operated platforms or offline sales. On platforms such as Amazon, eBay, and AliExpress, Anke Innovation's product sales are very impressive.

Judging from the data of Anke Innovation in recent years, Amazon platform is the most important sales platform. In 2019, Anke Innovation's revenue on Amazon was 235 million, accounting for 20% of Yinzhijie's revenue. In the first half of 2021, Anke Innovation continued to develop steadily, with revenue on Amazon reaching 115 million, accounting for 18.65% of Yinzhijie's revenue.

In fact, the relationship between Yinzhijie and Anke Innovation began as early as 2014. At that time, Yinzhijie purchased 51% of Anke Innovation's equity through a merger of companies under different control, with a merger price of 4 million yuan. At that time, Anke Innovation was in its infancy and its valuation was around 8 million yuan.

According to the gambling agreement at that time, if Anke Innovation completed its performance commitments in 2014 and 2015, Yinzhijie would make an additional investment of RMB 3 million respectively. Later, if Anke Innovation completed its performance commitments, Yinzhijie would fulfill the gambling agreement and make additional investments, and continue to increase its stake in Anke Innovation.

In order to acquire Anke Innovation and become its wholly-owned subsidiary, Yinzhijie signed an asset subscription agreement with Anke Innovation's minority shareholders and agreed on a bet. This agreement made certain requirements on Anke Innovation's performance, requiring Anke Innovation to have an annual net profit of no less than 30 million yuan or a cumulative net profit of 90 million yuan in the three years between 2022 and 2024.

As for Yinzhijie, the acquisition of Anke Innovation can drive the growth of the company's performance. At a time when cross-border e-commerce is developing rapidly, it may even reverse its negative net profit situation. With the support of Yinzhijie, Anke Innovation's cross-border e-commerce business will have strong funds for expansion. Through the cooperation and development of the two parties, it is possible to achieve a win-win situation.

Turning losses into profits, Anke Innovation has strong ability to attract money

In the 2021 performance forecast released by Yinzhijie , its net profit attributable to shareholders of listed companies is expected to be between 200 million and 250 million yuan, while the profit in the same period of 2020 was 20.8583 million yuan ; the net profit after deducting non-recurring gains and losses is between 210 million and 260 million yuan, and the profit in the same period was 7.6689 million yuan. Among them, Anke Innovation 's estimated operating income for the full year of 2021 is 456 million yuan, and the net profit attributable to the parent company is 30.95 million yuan.

Judging from the data of the past two years, there is still a big gap between negative 200 million and profit of over 20 million. In response to the performance change, Yinzhijie said that its main business of financial informationization business was affected by the volatility of orders from large bank customers, and its revenue dropped sharply, and its operating profit was in a loss state; its mobile information service business was affected by the increase in the cost department of telecom operators and industry competition, and its operating income and gross profit margin both dropped, and its operating profit was in a loss state.

However, Yinzhijie also pointed out in the report that the operating income of its e-commerce segment has grown steadily compared with the same period last year, and its operating performance has maintained a stable profit state.

Financial report data shows that in the first half of 2021, Yinzhijie's operating income was 618 million yuan, an increase of 5.04% over the same period last year, and its total profit was -42.9 million yuan . In other words, except for the stable growth of operating income and net profit of the e-commerce sector, other businesses of Yinzhijie are basically in a state of decline. In this way, Anke Innovation's profitability is one of the biggest driving forces for Yinzhijie's acquisition.

It is understood that Yinzhijie's e-commerce business revenue in the first half of 2021 was 238 million yuan, an increase of 28.24% over the same period last year. Anke Innovation's online transaction volume in the first half of 2021 was as high as 201 million yuan, with a total of 314,500 orders generated, creating a profit of 13.49 million yuan for Yinzhijie.

Among them, the product "ANNKE 5PM Lite" has accumulated more than 2,700 reviews on Amazon, with a rating of 4.5 stars, and the proportion of 5-star reviews once reached as high as 73%. In the reviews, most consumers commented on the product as "easy to install", "clear shooting pictures", "strong waterproofness", etc., which are exactly what Anke Innovation focuses on.

But it is worth noting that among similar products on Amazon, the prices of "Ring" and "Blink" are lower than that of ANKKE. Since they entered the industry earlier, they also built up their brand influence earlier than ANKKE. It can be seen from the sales volume and the number of reviews that relatively low-priced products seem to be more popular with consumers in many countries and regions.

On the other hand, the performance of the official website "annke.com" is also worth noting. From November last year to January this year, the traffic of annke.com has been increasing, with a significant increase in traffic in December, up 40.9% compared to November.

Data shows that most of annke.com's traffic comes from keyword search ads , with popular paid and natural keywords accounting for 57.8% of traffic , and the keyword that contributes the most traffic is "annke". In addition, social platforms bring about 6% of traffic, and direct visits contribute 29.06%.

At present, if Anke Innovation wants to develop in the long run, in addition to maintaining the existing official website traffic, it also needs to improve its social media monetization. I believe that in the future, Anke Innovation, backed by Yinzhijie, will also achieve good results through multi-faceted development!

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