Lost! Youkeshu failed to complete the performance bet...

In recent times, the 2020 performance reports of cross-border sellers have been released one after another. After much anticipation, the financial report of Youkeshu's parent company Tianze Information has finally been released. From the financial report, we can get a glimpse of Youkeshu's revenue situation in 2020 and the answer to the performance bet.

Ending: There is a tree that failed to complete the performance bet

Tianze Information’s financial report shows that in 2020, the company’s cross-border e-commerce export business accounted for 94.48% of its operating income. Tianze Information has transformed into a cross-border e-commerce export company.

During the reporting period, the company's cross-border e-commerce export business achieved operating income of RMB 474,893.37 million, an increase of 20.16% over the same period last year; operating profit of RMB 49,908.94 million, an increase of 33.01% over the same period last year; total profit of RMB 48,588.62 million, an increase of 31.90% over the same period last year.

To sum up the above content in one sentence: As a subsidiary of Tianze Information, Youkeshu has made great efforts to achieve this series of growing numbers.

It is understood that the audited net profit attributable to shareholders of the parent company of Youkeshu Company after deducting non-recurring gains and losses in 2020 was as high as 399.4967 million yuan .

With such a high net profit in 2020, did Youkeshu successfully complete the performance bet? The answer is no. According to the 410 million yuan promised in the "Profit Forecast Compensation Agreement" , Youkeshu is still 10.5033 million yuan away from reaching the target.

Tianze Information also disclosed in the announcement the reason why Youkeshu did not fulfill its 2020 performance commitment : during the reporting period, the company's software and information technology service business operating performance declined sharply, and the funds available for operating activities of the listed company became increasingly tight. In order to ensure the normal production and operation of the listed company and solve the difficulties in repaying its large debts, the subsidiary Youkeshu gradually transferred about 150 million yuan of funds from its business operating funds to the listed company.

The lack of the above-mentioned large amount of funds has obviously limited the growth space of Youkeshu's overall business. Although Youkeshu 's operating performance in 2020 has increased significantly compared with the previous year, there is still a certain difference between the realized net profit and the expected promised profit.

In addition, Youkeshu not only failed to fulfill its performance commitments in 2020, but also failed to achieve its original goals in 2019.

The following figure shows the cumulative performance commitments and actual achievements of YKS from 2018 to 2020:

In general, Youkeshu's cumulative net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses from 2018 to 2020 was RMB 973.7379 million, which was RMB 26.2621 million less than the total amount of RMB 100,000.00 million promised in the "Profit Forecast Compensation Agreement" , and the completion rate was 97.37%.

According to the agreement, Xiao Siqing shall bear the compensation obligation for Youkeshu Company's unfulfilled promised performance items with the consideration of shares he received in the restructuring transaction, in priority to other compensation obligors. The specific compensation plan is as follows:

Mr. Xiao Siqing shall be compensated for the shares first, with the number of shares to be compensated being 1,624,694 shares. No other person with compensation obligation shall be compensated for the shares to be compensated.

Compensation shares required.

As the leading cross-border e-commerce platform, Youkeshu is still pretty awesome!

At the end of the three-year period, although Youkeshu failed to fulfill its performance commitment, this result cannot conceal Youkeshu’s strong ability to make money.

It is understood that Youkeshu, a cross-border export e-commerce company of general categories, implements a multi-category development business strategy. While deepening its presence on mainstream third-party platforms such as Amazon, eBay, AliExpress, and Wish, it is also actively developing emerging platforms such as Shopify, Shopee, and Lazada. Its main products cover seven categories, including home building materials and household goods, electronic products, mobile communications and game accessories, sporting goods and toys, health products, and daily necessities . It has more than one million SKUs in stock and more than 8,000 active suppliers .

The sales revenue of Youkeshu’s third-party platform is as follows:

From this, we can see that in 2020, Youkeshu’s sales revenue on the Amazon platform was 1.525 billion, a year-on-year increase of 40.26%. In addition to Amazon, Youkeshu’s revenue on Wish and other platforms also showed an upward trend.

In addition to vigorously deploying third-party platforms, Youkeshu's independent station business is also booming. It has seized the historical opportunity of the rapid development of independent station channels represented by Shopify, and through investment in promotion and publicity expenses, it has obtained a large amount of accurate traffic outside the traditional e-commerce platform system from Internet platforms such as Google and Facebook, and built its own overseas independent stations to sell products. This move has made a great contribution to boosting performance. It is understood that Youkeshu's sales revenue on Shopify in 2020 reached 600 million, a year-on-year increase of 79.05% .

Below we can look at the operating data of Youkeshu's core product categories:

It can be seen that in 2020, the total number of orders of Youkeshu has reached 40.9641 million, and the total transaction amount is as high as 4.749 billion. Among them, the number of orders for home building materials and household goods accounted for 16.2404 million, contributing nearly 2.1 billion in transaction amount to Youkeshu. It seems that under the influence of the epidemic, the home furnishing category has become the winning magic weapon for cross-border sales.

In addition, affected by the COVID-19 pandemic, Youkeshu's business in categories such as epidemic prevention supplies has also achieved substantial growth. Although Youkeshu has not disclosed how much money it has made from epidemic prevention supplies, in 2020, Youkeshu concentrated its resources to purchase a large number of epidemic prevention supplies such as masks, gloves, and temperature measuring instruments, achieving double growth in revenue and gross profit for related categories such as epidemic prevention supplies, which has had a positive impact on Youkeshu's performance improvement in this period.

Big sales also bring troubles. Last year, Youkeshu’s management expenses reached 70.59 million yuan

Small and medium-sized sellers have a lot of worries. The big sellers who are already at the top of the pyramid, while enjoying supreme glory, still have worries that are consistent with their identity and status.

According to Tianze Information's announcement, in 2020, the company's cross-border e-commerce export business generated management expenses of 70.5902 million yuan, an increase of 25.98% over the same period last year .

The net cash flow generated from operating activities corresponding to the company's cross-border e-commerce export business was -177.4974 million yuan , a decrease of 214.17% from the same period last year , mainly due to the increase in cash outflows caused by strategic stocking for the peak season and the company's transformation to a boutique route at the end of the year.

In other words, Youkeshu's management expenses increased significantly in 2020 and its net cash flow decreased sharply.

The situation changed again in 2021. In the first quarter just passed, Youkeshu seemed to have a difficult time, just like many sellers.

Yien.com learned that Tianze Information stated in its financial report that its operating income in the first quarter was 798 million, a year-on-year decrease of 50.97%, and its net profit attributable to shareholders of listed companies was -23.69 million, a year-on-year decrease of 232.68%.

Tianze Information stated that during the reporting period, the company achieved operating income of 797.7156 million yuan, a year-on-year decrease of 50.97%. One of the important reasons for this is that in the previous reporting period, the company's cross-border e-commerce business benefited from the COVID-19 epidemic and achieved good growth in operating performance, resulting in a larger performance comparison base.

From Tianze Information's first quarter financial report, we can also learn that its monetary funds have also decreased. The important reason for the decrease is also related to its subsidiary Youkeshu:

The first quarter is the traditional off-season for cross-border e-commerce export industry, and sales proceeds decrease;

In order to transform into a high-quality product route, the company concentrated its resources and carried out strategic stocking.

Those small vendors who are complaining about the sharp decline in orders and the headache of stocking up can find some resonance when they see that the big vendor has the same problem.

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