Big news! Huakai Yibai is going to acquire Damaitongtuo

Due to an acquisition, two established cross-border e-commerce giants are joining together.

The latest news shows that Huading Co., Ltd. plans to sell 100% of the equity and all operating assets related to its main business of its wholly-owned subsidiary Shenzhen Tongtuo Technology Co., Ltd. (hereinafter referred to as "Tongtuo Technology") to Huakai Yibai.

This means that two well-known cross-border listed companies (Yibai Network and Tongtuo Technology) are about to join forces.

100 million yuan in cash payment! Yibai Network and Tongtuo Technology are going to join hands

Both Huakai Yibai and Huading Holdings issued announcements stating that the two parties had signed a "Framework Agreement on Cooperation."

According to the announcement released by Huakai Yibai, the company plans to acquire 100% of the equity of Tongtuo Technology and all operating assets related to its main business (including but not limited to trademarks, patents, shops, inventory assets, etc.) held by Huading Co., Ltd. in cash, and signed a "Cooperation Framework Agreement" with Huading Co., Ltd. on December 5, 2023.

This transaction is still in the planning stage.

Yienjun learned that Party A and Party B (Party A: Huading Co., Ltd., Party B: Huakai Yibai) agreed to use December 31, 2023 as the valuation and audit base date for this transaction , and the asset-based method was used as the main valuation method. The two parties negotiated and determined the transaction price of the target assets with reference to the valuation value of 100% of the target company's equity, and made specific agreements in the formal transaction agreement signed by both parties. The payment method and earnest money are as follows:

( 1) Both parties agree that the transaction will be paid in cash and will not involve the issuance of shares.

( 2) Parties A and B agree that within five working days after the signing and entry into force of this Agreement, Party B shall pay a lump sum earnest money of RMB 100,000,000 (in words: one hundred million yuan) to the co-managed account opened by Party A. Such account and funds shall be co-managed by Parties A and B.

As we all know, Huakai Yibai's subsidiary is the well-known cross-border retailer Yibai Network. Today, Yibai Network has become the main source of revenue for its parent company. This acquisition can actually be seen as a "hand-in-hand" cooperation between two cross-border listed retailers (Yibai Network and Tongtuo Technology).

This is undoubtedly one of the few cases in the entire cross-border circle, and it is also breaking news.

Yibai Network and Tongtuo Technology have joined forces!

Judging from public information, the four parties involved are undoubtedly optimistic about the acquisition.

Huading Holdings stated that this transaction will help the company focus on its core business, improve asset quality, optimize its industrial structure, enhance its core competitiveness and sustainable profitability, and is in line with the company 's future development strategy.

In an open letter released internally, Tongtuo Technology stated that the decision was made because its parent company Huading Holdings was focusing on the strategic needs of the nylon industry. Tongtuo's cooperation with the industry leader is also for the better of both parties, especially Tongtuo.

At the same time, Tongtuo will determine the main business indicators for next year and will launch a positive incentive mechanism based on 2024 this month, especially the incentive mechanism for the first quarter, and will continue to improve the working and living environment!

Huakai Yibai said in detail that Tongtuo Technology has 19 years of experience in the cross-border e-commerce industry and has strong complementarity with the company in the field of cross-border e-commerce export business :

1. Complementary operation models : Tongtuo has created well-known overseas brands such as TOMTOP, which have a high reputation and user base overseas. The company has continuously improved its automation and intelligent operation level through independent research and development of information systems, focused on improving operational efficiency, and has mature multi-country, multi-platform, and multi-category operation capabilities. Tongtuo can supplement and enhance the company's capabilities in its own brands or brand operations, and the company can use its own operational advantages to help the target company's brand quickly expand to more sales areas and channels and achieve rapid brand growth.

2. Product complementarity : Tongtuo mainly deals in instruments and meters, office supplies, musical instruments and tools, etc., while Yibai mainly deals in home gardening, industrial and commercial supplies, automobile and motorcycle accessories, health and beauty, 3C electronic products, outdoor sports, etc. The cooperation between the two parties is a good supplement to the company's main categories and can reuse the company's operational capabilities to achieve rapid growth.

3. Complementary product strength : The Company has extensive supply chain resources, and Tongtuo has deeper product development experience in some categories, which can help the Company improve the overall product development level, give play to the advantages of existing supply chain resources, and realize product upgrades and iterations for both parties.

In summary, by integrating the existing supply chain channels, business resources and technological advantages of both parties, we can achieve complementary advantages, enhance the company's profitability, risk resistance and sustainable development capabilities, and improve the overall competitiveness of the company's cross-border e-commerce business.

Current status of the two big sellers: Yibai Network’s revenue continues to rise, and Tongtuo escapes the shadow of “Amazon’s ban”

In the opinion of an industry insider, the combination between Yibai Network and Tongtuo Technology, which seems to be a two-way collaboration between two cross-border listed giants, may actually be more beneficial to Tongtuo's subsequent development.

From the current revenue status of the two big sellers, we can find that Yibai Network's revenue has continued to rise in recent years. After Tongtuo was hit hard by Amazon's account blocking wave, it has had to fall into a "self-rescue" situation in the past two years.

Tongtuo Technology: Founded in 2004 and headquartered in Shenzhen, it is one of the "Four Young Masters of South China City". Some time ago, Huading Co., Ltd. issued an announcement stating that the legal representative of its wholly-owned subsidiary Tongtuo Technology was changed from Mr. Zou Chunyuan to Mr. Zhu Zhilong due to business management needs.

In the first half of this year, Tongtuo achieved operating income of 1.676 billion yuan, a year-on-year decrease of 0.18%; total profit of 4.5458 million yuan, a year-on-year increase of 102.35%; net profit of 3.5078 million yuan, a year-on-year increase of 101.80%. It is worth noting that after the wave of self-sealing, Tongtuo finally turned losses into profits.

Yibai Network: Founded in 2011, it is headquartered in Shenzhen, with branches in Wuhan, Chengdu and Changsha. In 2021, it completed a merger and reorganization with A-share listed company Huakai Yibai.

Unlike Tongtuo, which almost succeeded in its "bet" with capital, Yibai has achieved five consecutive wins. In the first three quarters of this year, Yibai Network achieved operating income of 4.7 billion yuan, total profit of about 410 million yuan, and net profit of 350 million yuan. It achieved the bet ahead of schedule and exceeded the target, and received an excess performance reward of 42.5 million to 52.5 million yuan.

A careful observation reveals that Tongtuo and Yibai have a lot in common. They are both established cross-border sellers. They made their fortunes by distributing goods in the early years, and chose to go public by "being acquired". After the Amazon ban, they both focused on high-quality products. This time, the two chose to "go hand in hand", which is essentially for mutual benefit and win-win results, and even expect the effect of "1+1 > 2" to appear in the future. Of course, we are also happy to see all Chinese cross-border sellers shine overseas.