Ice and fire: Anker Innovations sold 8.425 billion yuan, and Youkeshu’s parent company’s net profit plummeted 2749%!

The third quarter of 2021 has passed, and financial reports of major sellers such as Anker Innovations, Giant Star Technology, Yibai Network, Youkeshu, Tongtuo Technology, and Jiazhilian have been released one after another. Let us take a look at what kind of cross-border answers these major sellers have submitted!

Tianze Information lost 207 million yuan in the third quarter . Changsha Youkeshu will focus on developing markets in Latin America and Southeast Asia

Yien.com learned that Tianze Information released its 2021 third-quarter financial report on the evening of October 26. The report showed that in the third quarter, Tianze Information's revenue was approximately 300 million, a year-on-year decrease of 68%, and the net profit attributable to shareholders of the listed company was -207 million, a year-on-year decrease of 2749%. The net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was -211 million, a year-on-year decrease of 2460%.

In the first three quarters, Tianze Information's revenue was 1.476 billion yuan, a year-on-year decrease of 55.37% from 2020. The net profit attributable to shareholders of the listed company was -1.156 billion yuan, a year-on-year decrease of 1688.04%. The net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was -1.173 billion yuan, a year-on-year decrease of 2178.28%.

Tianze Information disclosed the reasons for the decline in revenue in its financial report: sales were reduced due to the adjustment of cross-border e-commerce industry platform policies and the company's business transformation. It is understood that Tianze Information disclosed on July 6 that 340 sites of Youkeshu were blocked. In its reply to the Shenzhen Stock Exchange's inquiry letter on September 16, Tianze Information stated that Youkeshu's cumulative number of blocked sites was about 400, and the funds frozen were about 128 million yuan.

After the big seller’s account was blocked, some sellers said, “With the strength of the big seller, the account will be restored in a short time.” However, this time Amazon is serious...

Take Youkeshu for example. After the account suspension was disclosed on July 6, more than three months have passed and there has been no progress in the suspension. It is reported that on October 21, an investor asked Tianze Information, "Has there been any progress in the negotiations with Amazon?" Tianze Information responded that the company is still actively appealing and communicating about the closure of Amazon platform sites and the freezing of funds, and the relevant issues have not been effectively improved.

As a big seller in Shenzhen's cross-border circle, Youkeshu's achievements in the past few years are obvious to all. Although it has been punished by Amazon's account blocking, Youkeshu has not been defeated and is still actively exploring new sales channels.

Yien.com learned that Tianze Information had previously issued an announcement stating that the company's cross-border e-commerce business performance had fluctuated greatly due to the international trade situation and changes in the Amazon platform policy environment. In order to stabilize the development of cross-border e-commerce export business, listed companies objectively need the relevant government departments in the place of registration to continue to provide industrial policy support and high-quality resources to help the company continue to deepen its presence on mainstream platforms such as Amazon while actively exploring other emerging platform businesses in Latin America, Southeast Asia and other non-Amazon platform core coverage areas.

In its reply to the Shenzhen Stock Exchange's inquiry letter, Tianze Information stated that Changsha Youkeshu will subsequently focus on cross-border e-commerce export business, which is basically the same as other business entities such as Shenzhen Youkeshu in terms of business model. It mainly sells goods to overseas consumers by registering seller accounts on third-party e-commerce platforms and opening online stores.

In the future, Changsha Youkeshu will rely on platforms such as Aliexpress and Shopee to focus on developing other emerging market businesses in Latin America, Southeast Asia and other areas that are not core coverage areas of traditional platforms such as Amazon ; while other entities such as Shenzhen Youkeshu will continue to deepen their presence on platforms such as Amazon, eBay, and Wish to focus on mainstream markets in Europe and the United States.

Tianze Information said that Changsha Youkeshu was established at the end of 2019 and did not actually carry out cross-border e-commerce business in the early stage. Although the company plans to expand into emerging markets such as Latin America and Southeast Asia through Changsha Youkeshu in the future, Changsha Youkeshu has not yet established an independent and complete R&D, procurement, production, and sales system, and does not have the ability to operate independently in the market; and in the process of future architecture construction and business operations, it faces a series of risks such as market, technology, and management, and whether it can successfully achieve business development and achieve the expected planning results is still subject to major uncertainty.

As of September 30, 2021, Changsha Youkeshu had only 19 employees, all of whom were ordinary staff.

In addition, due to the continued deterioration of the operations of its subsidiary Yuanjiang Information, Tianze Information plans to transfer its 100% equity in Yuanjiang Information to further focus on its core business, strengthen its core capabilities, and continuously strengthen and refine its core business of cross-border e-commerce.

Tongtuo's revenue in the first three quarters was 4.7 billion, down 17.12% from last year

Yien.com learned that Tongtuo Technology's parent company Huading Co., Ltd. released its third-quarter 2021 financial report on the evening of October 27. The financial report showed that in the third quarter, Huading Co., Ltd.'s revenue was 1.964 billion yuan, a year-on-year decrease of 20.31%, and the net profit attributable to shareholders of the listed company was 64.61 million yuan, a year-on-year increase of 26.77%. The net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was -22.35 million yuan, a year-on-year decrease of 146.02%.

In the first three quarters, Huading Co., Ltd.'s revenue was 7.046 billion yuan, a year-on-year decrease of 2.39% from 2020. The net profit attributable to shareholders of the listed company was 237 million yuan, a year-on-year increase of 97.35%. The net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 111 million yuan, a year-on-year increase of 28.40%.

In its financial report, Huading Holdings mentioned that the main reason why the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses in the third quarter fell by 146.02% was that the cross-border e-commerce sector suffered losses due to the Amazon incident and European VAT taxes.

In addition to the third-quarter financial report, Huading Holdings also disclosed the company's operating data for the first three quarters. In the first three quarters, the cross-border e-commerce segment had revenue of 4.706 billion yuan, a year-on-year decrease of 17.12% from 2020, of which export cross-border e-commerce revenue was 4.598 billion yuan, a year-on-year decrease of 5.89%.

In terms of major categories, digital products had revenue of 780 million yuan in the first three quarters , down 23.56% year-on-year; apparel products had revenue of 52.1569 million yuan, down 68.55% year-on-year; and home products had revenue of 3.765 billion yuan, up 1.8% year-on-year. Logistics services had revenue of 372 million yuan in the first three quarters of 2020, but only 599,500 yuan in the first three quarters of this year, down 99.84%.

Judging from the disclosed data, home furnishing products still account for the majority of Tongtuo Technology's revenue. Although Tongtuo was greatly affected by the account ban this year, judging from its operating data, the account ban did not cause too much impact on Tongtuo.

In addition, Huading also disclosed the operating income of Tongtuo's self-operated website. From January to September 2021, Tongtuo's self-operated website had a revenue of 75.9755 million yuan, a year-on-year decrease of 9.97% . For detailed category revenue, please see the figure below ↓

In addition to the operating data of the cross-border e-commerce section and Tongtuo's self-operated website, Huading also disclosed key export operating data for the first three quarters. In the first three quarters, the total number of orders was 26.3178 million, the number of ordering users was 18.59 million, the average customer price was 189 yuan, the total commodity transaction volume was 4.983 billion, the number of active buyers was 910,000, and the number of visits to the self-operated platform was 49.5 million.

In the third quarter financial report, Huading shares stated that since mid-to-late July this year , 54 stores involving multiple brands of Shenzhen Tongtuo Technology Co., Ltd. have been suspended from sales by Amazon and their funds have been frozen, with a suspected frozen fund of RMB 41.43 million. Affected by the account suspension and the implementation of the platform's VAT withholding policy , Tongtuo Technology may continue to face operational risks brought about by inventory discount processing, warehouse return, platform policy adjustments, etc.

Anker Innovations: Overseas revenue in the first three quarters was 8.143 billion yuan, accounting for 96.65% of total revenue

As a benchmark company for cross-border brands going overseas, Anker Innovations still achieved certain growth in operating income and net profit from January to September 2021, against the backdrop of high shipping costs and continued rising raw material prices.

It is reported that in the first three quarters of 2021 , Anker Innovations achieved operating income of 8.425 billion yuan, a year-on-year increase of 39.99% ; and realized a net profit attributable to shareholders of listed companies of 646 million yuan, a year-on-year increase of 21.17% . Among them, overseas revenue reached 8.143 billion yuan, a year-on-year increase of 36.91%, accounting for 96.65% of total revenue .

It is worth noting that in the third quarter of 2021 , Anker Innovations' operating income reached 3.055 billion yuan, an increase of 22.63% over the same period last year; however , affected by factors such as increased freight costs and rising upstream raw material prices, its net profit was 237 million yuan, a decrease of 7.40% over the same period last year.

It can be seen that although overseas revenue is still the main source of income for Anker Innovations, Anker Innovations is also actively deploying in the domestic market. For example, in the first three quarters of 2021 , Anker Innovations' domestic revenue was 282 million yuan, a year-on-year increase of 296.76 %. From July to September, Anker Innovations' domestic revenue was 106 million yuan, a year-on-year increase of 297.36%.

In terms of channel construction, in addition to steadily developing online channels such as Amazon, Tmall, JD.com, Pinduoduo, and Douyin, Anker Innovations is also actively expanding offline sales channels such as APR , duty-free, airports, and Suning. The proportion of offline channel revenue continues to increase . Below we can look at the specific data of Anker Innovations' online and offline sales from January to September 2021 :

Online channel revenue was 5.422 billion yuan, accounting for 64.67% of the main business revenue;

Offline channel revenue was 2.962 billion yuan, accounting for 35.33% of the main business revenue, an increase of 5.14 percentage points over the same period last year .

Next, we can look at the significant changes in Anker Innovations' income statement items from January to September 2021 and the reasons for them:

It can be seen that Anker Innovations attaches great importance to R&D. In the first three quarters of 2021 , the amount of R&D investment was 499 million yuan, a year-on-year increase of 32.96%, accounting for 5.92% of total operating income, which continues to be at a relatively high level in the industry . In addition, due to the increase in brand building investment and the increase in ocean freight, Anker Innovations' sales expenses were nearly 2.3 billion, a year-on-year increase of 63.9%.

In addition to R&D expenses and sales expenses, we can also see that Anker Innovations' operating costs and administrative expenses have increased significantly year-on-year.

Giant Star Technology's net profit declines, plans to issue H shares in Hong Kong

Damei Superstar Technology said that the company seized the favorable conditions of the high industry prosperity, overcame unfavorable factors such as the shortage of international logistics capacity and the reduction of personal protective equipment revenue, and its operating income continued to maintain a rapid growth, with a year-on-year increase of 22.35% in the first three quarters , of which the third quarter increased by 31.56% year-on-year.

The 2021 third quarter report shows that Giant Technology's main operating revenue was 7.68 billion yuan, a year-on-year increase of 22.35%; net profit attributable to shareholders was 1.151 billion yuan, a year-on-year increase of 5.1%; non-net profit was 997 million yuan, a year-on-year decrease of 5.44% .

Among them , in the third quarter of 2021, the company's main operating revenue was 3.23 billion yuan, a year-on-year increase of 31.56%; the net profit attributable to shareholders of the parent company was 423 million yuan, a year-on-year decrease of 8.76%; the non-net profit was 416 million yuan, a year-on-year decrease of 4.75%; the debt ratio was 32.53%, investment income was 260 million yuan, financial expenses were 48.3406 million yuan, sales expenses were 460 million yuan, administrative expenses were 460 million yuan, R&D expenses were 203 million yuan, and the gross profit margin was 28.5%.

Giant Star Technology cited the following reasons for the performance changes :

1. In the first three quarters of 2020, the company achieved sales revenue of RMB 1.052 billion for personal protective products such as masks. In the first three quarters of 2021, revenue from the same category was less than RMB 20 million.

2. During the reporting period, the company's international logistics costs increased several times year-on-year, and the prices of major raw materials continued to rise. In order to ensure a stable supply, the company generally raised prices to suppliers . Although the company took price increase measures for terminal products, the price transmission of orders requires a certain period of time, resulting in a year-on-year decline in the company's gross profit margin .

3. In the third quarter of 2021, there was a severe shortage of international logistics and domestic U.S. port capacity, and the company's tens of millions of dollars of cargo was stranded in warehouses or ports, which seriously affected the revenue recognition in the third quarter.

4. At the same time, Geelong Holdings Limited, which the company acquired during the reporting period , was in a loss-making state in the third quarter, causing the company's net profit in the third quarter to decline slightly year-on-year.

It is reported that although Giant Star Technology has already been listed on the A-share market, it is also planning matters related to its H-share listing in the near future.

Giant Star Technology said that in order to better implement the company's long-term development strategy, further enhance the company's capital strength, improve the company's overseas financing channels, and accelerate the company's global business layout, the company plans to issue overseas listed foreign shares ( H shares) and list them on the Hong Kong Stock Exchange Limited (hereinafter referred to as "H share listing"). The company's board of directors authorized the company's management to start the relevant preparatory work for the H share listing. At present, the company is discussing the relevant work of this H share listing with relevant intermediary institutions. The specific details of this H share listing have not yet been determined.

Yibai Network's revenue in the first three quarters was 3.794 billion

After several twists and turns, Huakai Creative completed the acquisition of Shenzhen Yibai Network Technology Co., Ltd. Yibai Network has become a holding subsidiary of the company with a 90% stake and will be included in the scope of the consolidated financial statements from July 1, 2021.

It can be seen from the third-quarter financial report disclosed by Huakai Creative that after the acquisition of Yibai Network, Huakai Creative's revenue and net profit both increased.

The financial report shows that Huakai Creative's revenue in the third quarter was nearly 1 billion, a year-on-year increase of 1214.64%; its net profit was 5.4254 million yuan, a year-on-year increase of 178.71%. In the first three quarters, its revenue was 1.069 billion, a year-on-year increase of 737.81%, and its net profit was -16.709 million yuan, a year-on-year increase of 15.18%.

In addition, Huakai Creative also disclosed the operating data of Yibai Network in the first three quarters ↓

From January to June 2021 , Yibai Network’s revenue was 2.803 billion;

From July to September 2021, Yibai Network’s revenue was 991 million;

From January to September 2021, Yibai Network's revenue was 3.793 billion yuan.

In the financial report, Huakai Creative stated that the main reason for the sharp increase in revenue in the first three quarters was the consolidation of its holding subsidiary Yibai Network in this period, which increased the consolidated data. This shows that Yibai Network has brought considerable profits to Huakai Creative.

However, this year, the increase in shipping costs has caused a lot of headaches for cross-border sellers, but for Yibai Network, the fluctuation in shipping prices has little impact on the company.

In late September, Huakai Creative was asked by investors whether the high international shipping prices and the shortage of containers would have a significant adverse impact on Yibai Network's operating performance in the second half of the year .

Huakai Creative said that at present, sea transportation has little impact on the shipment of our company's general categories, and has a certain impact on the shipment of our own brands, but the volume of our own brands is currently small . At the same time:

1. Ocean shipping mainly cooperates with Amazon's official logistics. Although the cost has increased, it is much smaller than that of third-party freight forwarders ;

2. The official logistics space is mainly for large cargo, which is relatively tight. The space for standard parts warehouse is relatively better, which has not affected the actual delivery for the time being ;

3. During the early product planning, the proportion of large-sized warehouse products is effectively controlled, and the profit margin of the products is also effectively evaluated. Currently, there are relatively few large-sized warehouse products .

In summary, Yibai's operations in the second half of the year were less affected by sea transportation overall.

Price Chain: Revenue in the first three quarters is unknown ...

The editor learned from the announcement issued by Xunxing Co., Ltd., the parent company of Jiazhilian, that in the first three quarters of 2021 , Xunxing Co., Ltd.'s revenue was approximately 1.582 billion yuan, a year-on-year increase of 40.65%; net profit was approximately 121 million yuan, a year-on-year increase of 97.11%; basic earnings per share was 0.3389 yuan, a year-on-year increase of 97.15%.

The editor carefully studied the latest financial report of Xunxing Co., Ltd., and did not find any revenue information of its subsidiary Jiazhilian. However, the operating conditions of Jiazhilian were found in the 2021 semi-annual report of Xunxing Co., Ltd.

Xunxing Co., Ltd. 's 2021 semi-annual report shows that Jiazhilian is mainly divided into two sales businesses: e-commerce brands and e-commerce services:

1. The e-commerce brand sales business does not have its own sales platform, and mainly realizes export B2C sales through third-party platforms such as Amazon and Shopify independent stations. In the first half of 2021, online sales revenue through third-party sales platforms was 181 million, a year-on-year decrease of 17.92%, accounting for 92% of the total business sales in the first half of the year.

2. The e-commerce service business provides relevant software services to Amazon sellers using self-developed software: AMZTracker, Vipon, CashCowPro, Unicorn Smasher Pro, and Tracker M. In the first half of 2021, the e-commerce service revenue was 15.03 million yuan, up 32.54% year-on-year, accounting for 8% of the total business sales in the first half of the year.

It is reported that Shenzhen Jiazhilian has been recognized as a high-tech enterprise . According to the state's relevant tax preferential regulations for high-tech enterprises, the company enjoys the state's relevant tax preferential policies for high-tech enterprises, that is, paying corporate income tax at a tax rate of 15%.

Next, we can pay attention to the latest developments in the dispute between Xunxing Co., Ltd. and Gan Qingcao:

On February 7, 2021, the China International Economic and Trade Arbitration Commission made a ruling on the equity transfer agreement dispute between the company and Gan Qingcao, Zhu Ling, and Shenzhen Common Dream Technology Enterprise (Limited Partnership), and the company won the case. Gan Qingcao, Zhu Ling, and Shenzhen Common Dream Technology Enterprise (Limited Partnership) failed to fulfill their payment obligations within the performance period specified in the "Award". On March 30, 2021, the company applied to the Intermediate People's Court of Quanzhou City, Fujian Province for compulsory execution; on the same day, the Intermediate People's Court of Quanzhou City, Fujian Province accepted the case. As of September 30, 2021, the company has received a total of RMB 121,637,672.00 in execution funds .

Final Thoughts

Summarizing the financial reports of big sellers, we can find that small and medium-sized sellers are divided into different levels, and the big sellers standing at the top of the pyramid are also divided into "bad sellers" and "good sellers"; the problems that small and medium-sized sellers are worried about, such as rising freight costs, rising sales costs, and declining profits, are also borne by many big sellers; no matter you are a small or medium-sized seller or a big seller, as long as you abide by the platform rules and do a good job on product work, you can always achieve good results.

Big Sell

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Anker Innovations

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