Three quarter single quarter loss billion storm group shareholders "advance" reduction cash holdings

Three quarter single quarter loss billion storm group shareholders

Author Wang Juanjuan

The storm group announced that it expects to lose 218 million ~2.23 billion in the first three quarters of 2018. Among them, the three quarter loss will be 112 million ~1.17 billion yuan, more than the first half of the total deficit.

After betting on Internet TV, the loss of the storm group is deepening.

On the afternoon of Oct. 15, Storm Group announced a forecast of a loss of $218 million to $223 million in the first three quarters of 2018. Among them, the three quarter loss will be 112 million ~1.17 billion yuan, more than the first half of the total deficit.

The loss of more than $100 million in a single quarter surprised analysts who had followed Storm closely. Storm Group attributed the loss to two main reasons, one is the fierce competition for Internet video, advertising revenue decline; the other is the expansion of television business, increase marketing, increased costs. However, in the eyes of analysts, it is difficult for the outside world to see clearly the current situation of the company.

Increasing operational and financial pressures may also be losing patience and confidence among storm shareholders. Since August this year, the storm group's three initial shareholders Ruifeng Liyong, Ronghui Jin, Zhongxiang Hongtai and a number of senior executives have come up with a reduction plan, cashing in succession.

Single quarter loss over six months

Storm Group's earnings forecasts show a net profit loss of 218 million to 223 million yuan for shareholders of Listed Companies in the first three quarters of 2018, compared with a profit of 202.42 million yuan in the same period last year. Among them, the net profit loss from July 1 to September 30 alone was about 112 million to 117 million yuan, compared with a profit of 4.5173 million yuan in the third quarter of last year.

"No, it can't be that big." For the three quarter of the storm group's losses, a large brokerage media analyst is hard to believe.

"Internet TV business is in the period of rapid business expansion, in order to accumulate users, further seize the market share of Internet TV, ensure that storm TV can successfully complete business objectives, increase marketing efforts, cost increases." In addition to the decline in advertising revenue, the investment in TV business is also seen as the main reason for the loss.

"In pursuit of faster sales growth, the company began to transform its hardware business. So in this sense, Stormwind has become a TV product provider, not an Internet platform provider. Xue Yunkui, a lifelong professor at Changjiang Business School, argues that while Stormwind's sales of TV products depend on the size and trust of its customers in the past, it can also be packaged as an "AI assistant strategy" with the concept of artificial intelligence, but in essence it can not change the homogeneous competition pattern of TV products. The transformation not only fails to strengthen the company's core advantages, but also completely changes the company's brand positioning and competitiveness.

Storm Group's television business is currently in an embarrassing situation of "selling one TV set at a loss, selling more and more TV sets at a loss". The quarterly data have not yet been disclosed. According to the mid-2008 data, the gross margin of Storm Group's sales in the first half of the year was - 15.25%, down 7.70% from the same period last year. And advertising revenue fell more sharply, advertising revenue in the first half of 860 million 780 thousand and 800 yuan, a decrease of 56.85% over the same period.

In a previous reply to an exchange inquiry, Storm Group disclosed that in the first half of 2018, Storm Commander's revenue increased by 101 million yuan, 18.08% year-on-year, and operating costs increased by 178 million yuan, or 30.29% year-on-year. Gross margin losses amounted to $105 million, representing a decrease of 77 million 53 thousand and 100 yuan over the same period last year.

At the same time, inventory pressure should not be underestimated by storm group. In the first half of the year, the Storm Commander set aside 70.5651 million yuan for the stock price reduction, an increase of 70.8921 million yuan over the same period last year.

Shareholder reduction

Storm Group is burning money into TV and other businesses, and there is no equivalent output in the short term, which is losing the confidence of the company's shareholders, but also the chairman of Storm Group Feng Xin himself is facing increasing debt risk.

Before the announcement of the third quarter earnings forecast, Storm Group announced on Oct. 8 that the company's initial shareholder, Zhong Xiang Hongtai, had completed the reduction plan disclosed earlier. On September 26, 2018, Zhongxiang Hongtai reduced its holding of 226 6661 shares, accounting for 0.07% of the company's total capital stock, through auction trading.

In fact, since August, several initial shareholders and supervisor Gao of Storm Group have come up with a reduction plan.

On August 4, Stormwind Group announced that three initial shareholders, Ruifeng Liyong, Ronghui Lijin and Zhongxiang Hongtai, were planning to reduce their holdings by a centralized bidding method to no more than 0.78% of the company's total equity, i.e. no more than 2.5864 million shares. The reduction plan will be carried out within 6 months after the 15 trading day of the announcement.

The three companies all held 5.23% stake in the storm group before reducing their holdings. According to the Tian Eye Inspection, the three companies are all top management shareholders of Stormwind Group. As unanimous actors, Feng Xin is the only executive partner of the three companies, holding 6.64%, 10.66% and 8.27% respectively.

In addition, Stormwind Group announced on August 4 that Cui Tianlong, assistant president Li Yuanping and deputy general manager Zhang Pengyu planned to reduce their total shareholdings to no more than 2851,000 shares within four months of the 15 trading days after the announcement, accounting for 0.09% of the company's total capital stock.

Before the reduction, Cui Tianlong, Li Yuanping and Zhang Pengyu held 0.62%, 0.14% and 0.08% of Storm Group's shares respectively. All the shares were reduced from the restricted shares granted to them by Storm Group's equity incentives, and the purpose of the reduction was disclosed as paying the income tax on the equity incentive scheme.

By the close of October 15, Stormwind's share price had fallen to 8.75 yuan per share, which is not good news for Feng Xin, a high proportion of the pledge.

Since 2017, Feng Xin has continuously pledged his shares of Storm Group to finance. In the first half of the year, he has pledged 12 times. The proportion of pledges has reached 70%. By mid-2018, the proportion of pledges has reached 95.35%. Prior to June, Feng Xin had postponed the repurchase of his pledge in 67 million 51 thousand and 100 shares of China Securities.

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