Shenzhen's big sale exceeded the bet! The core team may receive more than 100 million yuan

In the cross-border circle, there are many big sellers that have obtained mergers and acquisitions with high price-to-earnings ratios from listed companies, but most of them ended up with failed bets and a mess. There are not many companies that have repeatedly delivered perfect results like Yibai Network.

Huakai Yibai's financial report data shows that in 2023 the company's revenue was 6.517 billion yuan, and the net profit attributable to the listed company was 330 million yuan, with both revenue and profit increasing.

As we all know, Huakai Yibai's revenue mainly comes from cross-border business. So, how does Yibai Network, as the main force of cross-border business, perform? How much reward can you get after completing the bet?

With both revenue and profit increasing, Yibai Network has exceeded its target for five consecutive years

Financial report data shows that in 2023, Yibai Network's revenue and profits will both grow again. Specifically, Yibai Network's operating income in 2023 was 6.481 billion yuan, a year-on-year increase of 47.89%, contributing more than 80% of the company's revenue; and achieved a net profit of 405.8 million yuan, a year-on-year increase of 40.62%.

This means that Yibai has achieved its performance target for another year. According to the signed gambling agreement, Yibai Network needs to achieve net profits attributable to the parent company's owners after deducting non-recurring gains and losses in the consolidated financial statements in 2019, 2020, 2021, 2022, and 2023 of no less than 141 million yuan, 170 million yuan, 204 million yuan, 251 million yuan, and 290 million yuan, respectively. In actual conditions, Yibai Network achieved net profits of 175 million yuan, 364 million yuan, 216 million yuan, 281 million yuan, and 406 million yuan, respectively, all exceeding the target.

So far, Yibai Network has achieved its performance commitments for five consecutive years.

In addition, its net cash flow and inventory turnover rate meet the requirements of the agreement. According to the gambling agreement, the net cash flow generated by Yibai Network in 2020 and 2021 is positive in total, and the net cash flow in 2021 is positive. At the same time, Yibai Network's annual inventory turnover rate from 2019 to 2022 is not less than 2.8 (times/year).

Based on the business objectives agreed in the gambling agreement and the supplementary agreement, Yibai Network has met the conditions for the implementation of excess performance rewards. Data shows that the audited cumulative net profit attributable to the parent company's owners after deducting non-recurring gains and losses from 2019 to 2023 of Yibai Network is 1.496 billion yuan , and the excess is 440 million yuan . The consideration for this transaction is 1.512 billion yuan .

According to the calculation formula for excess performance bonus, the total amount of excess performance bonus of Yibai Network is 160 million yuan ( including tax), which does not exceed 50% of the excess amount and does not exceed 20% of the transaction price . In other words, the main management team members of Yibai Network will receive an excess bonus of 160 million yuan.

However, this bonus can only be obtained after the performance commitment period expires, and it is paid in cash over two years, with the first year's payment not exceeding 50% of the total excess performance bonus.

As for the remaining 10% of Yibai Network's equity to be acquired in April 2023, according to the agreement, the net profit after deducting non-operating expenses in 2023 and 2024 shall not be less than RMB 330 million and RMB 360 million respectively, and the cumulative amount shall not be less than RMB 690 million. If it is lower than that, Siyang Mangliduo and Siyang Chaoran shall make cash compensation to the company within 30 days after the audit results are determined.

785 stores, 4.876 billion yuan in revenue, Yibai Network is the biggest winner

As a big seller of home gardening, industrial and commercial supplies, auto and motorcycle accessories, health and beauty products, etc., Yibai Network made its fortune by distributing products. Not only did it not fail, but it became better and better. Although it sells products on Amazon, eBay, AliExpress and other channels, the hundreds of stores on Amazon have been the main force of its revenue for many years.

In 2023 alone , Yibai Network achieved a revenue of 4.875 billion yuan with 785 Amazon stores, accounting for 74.81% of its revenue. On average, the revenue of a store is more than 800,000 US dollars. The annual order volume reached 35.1 million, and the average amount of each order was 138.91 yuan.

In terms of products, Yibai Network's most popular products are home gardening, which contributed the most revenue of 1.452 billion yuan to the company, followed by industrial and commercial supplies, with revenue of 1.019 billion yuan. However, its product with the highest average unit price is 3C electronics, with an average sales unit price of 119.78 yuan, followed by automobile and motorcycle accessories at 106.61 yuan.

Although it started out as a distributor, Yibai Network did not follow the usual distribution path, but improved itself through independent research and development. It has laid out its boutique business and has formed four major product lines, namely cleaning appliances, household appliances, pet products, and lamps, with a focus on creating advantageous categories.

Compared with the general category business, Yibai Network's boutique business SKUs are relatively few, only 636, but the sales per customer has increased significantly, about 380 yuan. Among them, the hot-selling products of cleaning appliances are stable in the top five subcategories of Amazon's e-commerce platform, and the hot-selling products of pets are stable in the top ten subcategories of Amazon's e-commerce platform.

In the annual report, Huakai Yibai also frequently mentioned a keyword AIGC technology. It is reported that its cross-border export business has already applied this technology, from AI intelligent procurement, AI intelligent product selection, to AI intelligent copywriting, intelligent warehousing, and then to Xiaoyi AI intelligent picture synthesis, intelligent stocking and other business links. And the data is very impressive, such as AI assisted its intelligent decision-making 30 million times, generated copywriting 4 million times, and generated 3 million advertising keywords, covering all links from procurement to stocking.

Yibai Network is not only increasing its advantageous categories and using AI technology, but is also expanding its business at a time when many big sellers are shrinking their battle lines. At the beginning of this year, Yibai Network released more than 200 recruitment positions, mainly involving operations and technical positions, or paving the way for its boutique business. At the same time, Huakai Yibai spent 1.5 billion yuan to buy a building in Shenzhen to build its South China headquarters, dedicated to the construction of the supply chain.

TikTok, which is currently popular, is also the focus of Huakai Yibai's layout. At the beginning of the year, Huakai Yibai completed the acquisition of Haitu Technology. According to public information, Haitu Technology is a company with ten years of experience in cross-border e-commerce. It mainly operates platforms such as TikTok, AliExpress, and Amazon. It has a number of distributors in the United States and other places, and its TikTok fan matrix exceeds 5 million.

Yibai Network Chenghuakai Yibai Banknote Printing Machine

Before Huakai Yibai signed a gambling agreement with Yibai Network, Huakai Yibai was called Huakai Creative, which mainly provided comprehensive environmental art design services for large indoor spaces such as exhibition halls. It went public in 2017, but its performance was not ideal. From 2017 to 2020, its operating income and net profit decreased from 562 million yuan and 48.735 million yuan to 135 million yuan and -62.4834 million yuan, respectively.

It was not until Huakai Creative "married" with Yibai Network and signed a bet agreement that it shifted its main business to cross-border e-commerce, and its performance improved. Perhaps in other words, Yibai Network is the biggest booster for Huakai Creative. Looking at the journey of Yibai Network, it is not an exaggeration to say that it has been running all the way↓

In 2011, Yibai Network was established in Shenzhen, China;

In 2013, we were the first to sell our products overseas and set up overseas warehouses;

In 2015, sales soared and the company team grew to 200 people;

In 2016, the performance increased threefold, exceeding the company's goals;

In 2018, the team grew to over a thousand people, and performance continued to double;

In 2019, it entered into the capital market through a "marriage" with Huakai Creative.

By 2023, the bet will be exceeded for five consecutive years;

Starting from a distribution business, and later expanding the model to general and high-quality products, Yibai Network has been on a tear, not only leading Huakai Creative to turn losses into profits, but also firmly placing itself in the C position. In addition, Huakai Yibai plans to achieve an operating income of 8.5 billion yuan in the cross-border export e-commerce business segment in 2024. As an excellent example, can Yibai Network achieve such a goal in the new year?

Yibai Network

23-year financial report

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