The helmsman of Tongtuo Technology has changed, and the parent company is expected to lose over 100 million yuan in 2020!

The editor learned that the legal representative of Tongtuo Technology has been changed from "Liao Xinhui" to "Zou Chunyuan". We don't know what kind of story is behind the "change of ownership" of the helmsman of the cross-border seller. However, public information shows that Tongtuo Technology's parent company Yiwu Huading has issued an announcement on its 2020 annual performance loss forecast. The expected loss is mainly due to the large amount of goodwill impairment provision, of which the goodwill impairment provision amount formed by the subsidiary Tongtuo Technology is approximately 320-420 million yuan.

How will Tongtuo Technology, which has failed to complete its performance bet for two consecutive years, earn in 2020? The answer has not yet been revealed, but it is worth looking forward to.

Change of legal representative of Tongtuo Technology

On April 15, Yiwu Huading Nylon Co., Ltd. issued an announcement on the change of the legal representative of its wholly-owned subsidiary. The content shows ↓↓↓

Yiwu Huading Nylon Co., Ltd. received a notice from its wholly-owned subsidiary Shenzhen Tongtuo Technology Co., Ltd. (hereinafter referred to as "Tongtuo Technology") on the completion of the change of legal representative on April 14, 2021. Approved by the Shenzhen Municipal Administration for Market Regulation, the legal representative of Tongtuo Technology was changed from "Liao Xinhui" to "Zou Chunyuan", and other registration items remained unchanged.

Many people may wonder what the legal representative means. It is understood that the legal representative refers to the person in charge who represents the legal person in exercising civil rights and performing civil obligations in accordance with the law (such as the director of a factory, the chairman of a company, etc.).

Generally speaking, the legal representative is not only able to exercise authority on behalf of the commercial entity externally, but is also the highest administrative head within the commercial entity, fully responsible for the business management of the commercial entity and assuming corresponding leadership responsibilities.

Therefore, the change of Tongtuo’s legal representative from Liao Xinhui to Zou Chunyuan also means that the actual person at the helm of the company has changed.

It is understood that before entering the cross-border e-commerce market, Liao Xinhui worked as an art teacher at Hunan Hengyang Metallurgical School for 7 years. From 2000 to 2001, he worked as a web designer for Hong Kong Daling Group Co., Ltd. From 2001 to 2002, he was a graphic designer for Shenzhen Haobainian Home Furnishing Chain Co., Ltd. From 2002 to 2004, he worked as a designer for the Information Center of Shenzhen Experimental School. In 2005, he became the executive director and CEO of Tongtuo Technology.

As one of the earliest cross-border e-commerce companies in China, Tongtuo Technology has grown rapidly under the leadership of Liao Xinhui and was successfully acquired and listed.

Yien.com learned that when Tongtuo Technology was acquired in 2017, it issued a corporate value assessment report, which also revealed Tongtuo Technology's status in the industry.

The report stated that according to public data analysis, in the field of self-operated export retail e-commerce in China, Tongtuo Technology's overall business scale can be ranked among the top five, and it has strong market competitiveness.

In addition, Tongtuo Technology announced the categories of goods it sells on major e-commerce platforms, as follows ↓

Amazon: General;

eBay: 3C electronics, outdoor furniture, etc.

AliExpress: 3C electronics, photography and audio-visual, outdoor home furnishings, beauty and apparel, etc.;

Wish: 3C electronics, photography and audio-visual, outdoor home furnishings, beauty and clothing, etc.

As a company that sells a lot of goods, Tongtuo Technology ranks among the top in the industry in terms of the number of stores and SKUs. The announcement stated that in addition to opening stores on third-party platforms such as Amazon, eBay, AliExpress, and Wish in the name of itself or its subsidiaries, Tongtuo Technology also has a small number of stores opened in the name of company employees or third-party entities.

It is understood that Tongtuo had more than 400,000 SKUs in 2017, and in Huading Holdings' 2019 financial report, it can be found that Tongtuo's SKU number has exceeded 550,000.

Huading shares released the 2020 annual performance loss forecast announcement

Going public also means that Tongtuo Technology and its parent company are officially tied together.

Yien.com learned that Huading Co., Ltd. previously issued an announcement of expected loss in 2020 annual performance, stating that

It is estimated that the net profit attributable to shareholders of the listed company in 2020 will be reduced compared with the same period of the previous year (statutory disclosure data), and the net profit attributable to shareholders of the listed company will be between -170 million yuan and -280 million yuan.

It is estimated that the net profit attributable to shareholders of the listed company in 2020 after deducting non-recurring gains and losses will be between -197 million yuan and -328 million yuan.

In the announcement, Huading Holdings stated that the main reason for the expected loss in this period was the large amount of goodwill impairment.

According to preliminary estimates by the company's financial department, the amount of impairment provision for goodwill generated by the acquisition of Shenzhen Tongtuo Technology Co., Ltd. (hereinafter referred to as "Tongtuo Technology") in 2020 is expected to be approximately RMB 320 million to RMB 420 million . The final amount of impairment provision for goodwill will be determined after evaluation and audit by the appraisal agency and auditing agency hired by the company with securities and futures qualifications.

Huading said that the performance forecast took into account the goodwill impairment factor generated by the purchase of Tongtuo Technology's related asset group, but no evaluation report has been issued by a professional evaluation agency, nor has it been confirmed by the annual review accountant and the company's review procedures. It is understood that as of now, the accountant has not yet issued a special report on Tongtuo Technology's 2019 performance completion . If there are any changes, the company will adjust the 2019 financial data and related performance reports.

Tongtuo has not completed the bet for two consecutive years

There are many cases in the cross-border circle of big sellers being acquired and listed. Being favored by capital is the dream of many cross-border e-commerce sellers, but will everything go smoothly after being acquired and listed?

After being acquired by Xunxing Shares, Jiazhilian had to pay 1 billion yuan in compensation to its parent company for failing to fulfill its performance commitments. However, Gan Qingcao and his wife fled overseas, so it was not easy to recover this huge amount of compensation...

Tongtuo Technology, one of the four young companies in South China City, also signed a performance commitment after being acquired by Huading Group, but the final performance was not ideal.

Yien.com learned that in April 2018, Huading Holdings signed a share transfer agreement with the original shareholders of Tongtuo Technology. According to the agreement, the transferor promised that the net profit attributable to the parent company's owners of Tongtuo Technology after deducting non-recurring gains and losses in 2017, 2018 and 2019 would not be less than RMB 200 million, RMB 280 million and RMB 390 million respectively.

However, Tongtuo only completed the bet in 2017, and failed to complete the bet for two consecutive years in 2018 and 2019.

It is understood that after auditing, Tongtuo Technology achieved net profits of 202 million yuan and 221 million yuan respectively in 2017 and 2018 after deducting non-operating expenses, so it did not complete its performance commitment in 2018. According to the relevant provisions of the restructuring plan and the Performance Compensation Agreement, Tongtuo Technology should pay Huading Shares a compensation amount of 188.5335 million yuan in 2018.

Huading Holdings also mentioned in its financial report that Tongtuo Technology failed to fulfill its performance commitments in 2018, and Tongtuo Technology's original shareholders Zou Chunyuan, Liao Xinhui, and Shenzhen Tongwei Investment Partnership (Limited Partnership) have completed the execution of the major asset restructuring performance compensation agreement.

In its 2019 financial report, Huading Holdings mentioned that Tongtuo Technology achieved a net profit of 304 million yuan after deducting non-operating expenses in 2019, so it is expected that the performance commitment will not be met in 2019.

After failing to meet performance commitments for two consecutive years, the original shareholders of Tongtuo Technology need to pay a high amount of compensation to Huading. It seems that the road after the listing will not be easy! Many industry leaders also said that independent listing is more popular ...