Criminal case! Shenzhen listed company was defrauded of nearly 15 million yuan by its employees

Recently, major sellers have successively disclosed their performance in the first three quarters, and not long ago, San Tai Shares also made a forecast for its performance from January to September in its latest prospectus. However, compared with the performance, a criminal fraud case that occurred in its subsidiary seems to be more concerning.

Employees and outsiders teamed up to cheat the company, and the boss came to fill the hole

The prospectus shows that from January to September 2023, Santai Co., Ltd.'s operating income is expected to be 1.26 billion yuan to 1.37 billion yuan, a year-on-year increase of 2.95% to 12.26%; net profit attributable to shareholders of the parent is expected to be 110 million yuan to 120 million yuan, a year-on-year increase of 0.78% to 12.19%; net profit attributable to shareholders of the parent after deducting non-recurring items is expected to be 110 million yuan to 120 million yuan, a year-on-year increase of 17.09% to 27.83%.

Performance growth is supposed to be a happy thing, but in the third quarter, Santai Co., Ltd. encountered a bad thing, which directly caused significant economic losses to it.

In August, a criminal fraud case occurred in a subsidiary of Santai Co., Ltd., in which internal employees were suspected of conspiring with external personnel to defraud the subsidiary of 14.96 million yuan. The company has reported the case to the Nanshan Branch of the Shenzhen Public Security Bureau, and the case has been filed by the public security organs.

Although the case is still under investigation, someone has to bear the economic losses caused, and that person is ZHONGBIN SUN, the head of Santai Co., Ltd.

Santai Co., Ltd. stated that in order to safeguard the interests of shareholders, the company's first interim board of directors in 2023 and the first interim supervisory board in 2023 reviewed and approved the "Proposal on the Actual Controller's Fulfillment of Commitments and Related Transactions". The company's actual controller ZHONGBIN SUN has borne all economic losses caused to the issuer by the above case on behalf of the company free of charge.

It is reported that the losses caused by the above matters have been reflected in the performance forecast for January-September 2023. If the relevant losses are recovered later, the company will return the recovered funds to ZHONGBIN SUN.

It is understood that the equity of San Tai Co., Ltd. is highly concentrated. ZHONGBIN SUN (Sun Zhongbin) currently indirectly controls 84.5878% of the shares and is the actual controller of the company. Unlike most grassroots cross-border e-commerce company leaders, ZHONGBIN SUN graduated from Huazhong University of Science and Technology and Shanghai Jiaotong University with a bachelor's degree in physics and a master's degree in computer science. He graduated from China Europe International Business School with an EMBA in 2013.

In the early years, when ZHONGBIN SUN was a seller on eBay, he discovered the business opportunities of cross-border e-commerce. Until now, eBay still occupies an important position in the revenue channel of San Tai Co., Ltd., bringing in 208 million yuan in GMV in 2022, ranking third among the six major platforms it has deployed, second only to Amazon (409 million yuan) and Shopee (210 million yuan).

After years of deep cultivation in the cross-border e-commerce industry, Santai Co., Ltd. also successfully entered the capital market this year and became one of the A-share listed companies.

At the end of last month (September 28), San Tai Co., Ltd. was successfully listed on the Shenzhen Stock Exchange with an issue price of 7.33 yuan per share and an issue price-earnings ratio of 45.19 times. On the first day of listing, the company's stock price once soared by more than 190%. The current total market value is 10.99 billion yuan.

With only 773 employees, it is known as the "King of Distribution"

San Tai Co., Ltd. is a well-known "distribution king". It currently sells about 830,000 SKUs and nearly 100 subcategories. Distribution is about "human sea tactics". Usually, the number of employees in a distribution company is not too small, but San Tai Co., Ltd. is an exception.

As of the end of 2022, it has a total of only 773 employees (including logistics business employees). Why can such a small number of employees support nearly one million SKUs? Because it has a strong IT gene, using big data intelligence and IT technology, it has achieved the ultimate in "product selection" and "efficiency". It is reported that IT & data technicians account for 19.15% of its total number of employees (148 people). Obviously, this part of the employees is the core of the continuous development of San Tai Co., Ltd.

Equity incentives are one of the incentives used by major cross-border e-commerce companies to retain core talents. Huabao New Energy, Lechuang Holdings, and Zebao Technology have all launched equity incentive plans for outstanding employees and backbones. Santai Holdings also launched this incentive measure as early as 2016, and recognized a total of 3.584 million yuan in share-based payment expenses in 2016 and 2017.

By implementing equity incentives, the enthusiasm of middle and senior management and key employees was fully mobilized, while the stability of the management team and talent pool was maintained, providing an important guarantee for its successful listing and long-term development.

The transformation to a boutique model/brand is a trend in the cross-border e-commerce industry, and there is currently a lot of demand for it. Against this background, Santai Co., Ltd. was able to successfully go public independently, which is certainly commendable, but the problems with the distribution model cannot be ignored.

Now, many companies that grew up during the bonus period and sold goods in large quantities are having a hard time: Youkeshu’s stock has been labeled as ST, with revenue of 235 million yuan in the first half of the year, down 44.40% year-on-year, almost "halved", and a net loss of 59.2862 million yuan; Cross-Border Link is also struggling hard. Among its three "trump cards" in hand, Global Easybuy went bankrupt, Paton was sold, and the only remaining SAFU's performance is also declining.

In the future, with Amazon's strict regulatory policies and the trend of building brands, coupled with the addition of Temu, which focuses on low-price strategies, the distribution model will only become more and more difficult.

Although Santai Co., Ltd. is now able to achieve a gross profit margin far exceeding that of its peers by utilizing big data intelligence and IT technology, how far can it go under pressure from multiple parties?

Nowadays, Youkeshu, Yibai Network and other large-scale mass-market products have tried to transform into high-quality products, but Santai shares is very calm, and there has been no relevant news or signs so far indicating that it will adjust its "distribution model."

At a critical moment, logistics business scores

In addition to its strong IT genes, another advantage of Santai Co., Ltd. lies in its logistics capabilities.

Unlike many sellers, San Tai Co., Ltd. is a comprehensive seller whose business includes cross-border e-commerce and cross-border logistics. Compared with cross-border e-commerce business, logistics business accounts for a small proportion, but it plays a big role.

Unlike most companies in the cross-border e-commerce industry, Santai Co., Ltd. relies on self-operated or third-party logistics for most of its sales on overseas third-party e-commerce platforms, which ensures that goods can be quickly delivered directly from China to overseas consumers.

At the same time, it also opens its logistics system to provide other cross-border e-commerce customers with one-stop logistics solutions such as third-party cross-border logistics. By the end of 2022, its logistics business has provided high-quality warehousing and global logistics solutions to nearly 20,000 global e-commerce sellers. Its partners include not only world-renowned logistics companies such as DHL, Swiss Post, Hermes, etc., but also overseas mainstream e-commerce and payment platforms such as Amazon, eBay, coupang, B2W and Payoneer.

Santai’s layout in the logistics field not only ensures its efficient fulfillment capabilities, but also contributes a large part of cash flow. Even when the retail business suffers setbacks, it can support the company’s performance well.

The prospectus shows that from January to June 2023, Santai Co., Ltd. achieved operating income of 847 million yuan, an increase of 4.01% over the same period last year; net profit attributable to shareholders of the parent was 81.4831 million yuan, an increase of 18.85% over the same period last year; non-net profit attributable to shareholders of the parent was 76.3563 million yuan, an increase of 17.54% over the same period last year, mainly due to the company's cross-border e-commerce logistics business revenue from January to June 2023 increased compared with the same period last year.

When Santai Co., Ltd. decides to transform into a boutique or brand seller one day, its growing logistics business may become its confidence, for example, by providing good financial support.

Three State Shares