E-point world’s overdue payment exceeds net profit gross profit margin number of employees decreases deposit 800 million IPO replenishment

On December 11, the first application of e-point World Network Technology Co., Ltd. (hereinafter referred to as “e-point world”) will be presented at the meeting. The main business income of e-point world mainly comes from the revenue of effect advertising service. The company plans to issue no more than 75.5017 million new shares in the gem of Shenzhen Stock Exchange, accounting for no less than 10% of the total share capital after the issuance. It plans to raise 1.242 billion yuan, of which 892 million yuan is used for “program advertising platform upgrade project”, 150 million yuan is used for “R & D center construction project”, and 200 million yuan is used for “supplementary working capital”. < / P > < p > CITIC Securities is the sponsor of this issue of e-point world. CITIC Securities is also a shareholder of e-point world, and its wholly-owned secondary subsidiary, Jinshi Haowei, holds 1.01% of the shares of e-point world before the issuance. < / P > < p > in 2018 and 2019, the cash received by e-point world was less than the revenue. In 2017, 2018, 2019 and from January to June 2020, the company’s operating revenue was 1.799 billion yuan, 1.979 billion yuan, 2.493 billion yuan and 1.068 billion yuan respectively, and the cash received from selling goods and providing services was 1.904 billion yuan, 1.844 billion yuan, 2.276 billion yuan and 1.316 billion yuan respectively. < / P > < p > the company’s net profit in 2019 is lower than that in 2017. In the same period above, the net profit of e-point world was 265 million yuan, 191 million yuan, 241 million yuan and 93 million yuan respectively, and the net cash flow from operating activities was 376 million yuan, – 34.7931 million yuan, 242 million yuan and 117 million yuan respectively. < / P > < p > the proportion of accounts receivable in the company’s revenue continued to grow. From the end of 2017 to the end of 2019 and the end of 2020, the balance of accounts receivable of e-point world was 504 million yuan, 695 million yuan, 956 million yuan and 720 million yuan respectively, accounting for 28.04%, 35.12%, 38.33% and 67.49% of the current operating revenue. < / P > < p > in each period, the company’s overdue accounts receivable are far behind the net profit of the same period. In each period, the original value of overdue accounts receivable of e-dian Tianxia was 385 million yuan, 437 million yuan, 434 million yuan and 395 million yuan respectively. As of September 30, 2020, the amount collected was 367 million yuan, 388 million yuan, 342 million yuan and 253 million yuan respectively; as of September 30, 2020, the amount not collected was 181.737 million yuan, 49.1074 million yuan, 91.2162 million yuan and 143 million yuan respectively. In the same period, the net profit of e-point world was 265 million yuan, 191 million yuan, 241 million yuan and 93 million yuan respectively. < / P > < p > the company’s roe also showed a downward trend, especially in the first half of this year, which dropped 62.28% to single digits compared with last year. From January to June in 2017, 2018, 2019 and 2020, the weighted average return on net assets of e-point world were 24.29%, 17.97%, 19.17% and 7.23% respectively. < / P > < p > the number of employees of the company has dropped continuously in the latest year. From the end of 2017 to the end of 2019 and the end of 2020, the number of employees of e-point world is 434, 460, 445 and 431 respectively. < / P > < p > from the end of 2017 to the end of 2019 and the end of June 2020, the monetary funds of e-point world were 602 million yuan, 563 million yuan, 781 million yuan and 809 million yuan respectively, of which the bank deposits were 602 million yuan, 563 million yuan, 781 million yuan and 809 million yuan respectively. Among them, the total amount of money deposited abroad was 273 million yuan, 115 million yuan, 491 million yuan and 483 million yuan respectively. < / P > < p > in the same period above, the total liabilities of e-point world were 610 million yuan, 546 million yuan, 809 million yuan and 874 million yuan respectively, of which the total current liabilities were 599 million yuan, 541 million yuan, 802 million yuan and 867 million yuan, accounting for 98.22%, 99.14%, 99.20% and 99.23% respectively. < / P > < p > in addition to holding huge deposits, Yidian Tianxia has paid a total dividend of 448 million yuan in the past three years. In 2017, 2018 and 2019, the company’s cash dividends were 238 million yuan, 59.4576 million yuan and 151 million yuan respectively. < / P > < p > in 2017 and 2018, byte beat was the number one and second largest customer in the world, with sales revenue of 233 million yuan and 170 million yuan respectively, showing a downward trend. In 2019 and the first half of 2020, bytedance will withdraw from the top five customers of e-point. In the first half of 2019 and 2020, e-point world’s revenue from bytedance was 4.9024 million yuan and 520100 yuan respectively. According to the interview of China Economic Net, the revenue of bytedance decreased significantly in 2019, mainly due to a large number of overseas promotion of bytedance in the medium and long tail media effect marketing end in 2017. In 2018, for the sake of transparency and brand image building, advertisers gradually turned to the head media, and bytedance products had been launched in the early stage in 2019 Now the audience promotion, into the cash recovery period, so the corresponding reduction of advertising. < / P > < p > at the same time, bytedance is also a big supplier of e-point, and the company’s purchase amount is on the rise. From January to June in 2019 and 2020, the company purchased 142 million yuan and 165 million yuan from bytedance, accounting for 4.77% and 8.06% respectively. < / P > < p > the actual controller of Yidian world is Zou Xiaowu, who is the chairman and general manager of the company. In 2015, Zou Xiaowu and his team acquired the control right of gaoman heavy industry by acquiring shares of gaoman heavy industry, a company listed on the new third board, and subscribing for shares issued by gaoman heavy industry. < / P > < p > from December 2015 to January 2016, gaoman heavy industry changed its name to “yidiantianxia Network Technology Co., Ltd.” and changed its business scope. Subsequently, yidiantianxia and Jihong, a small and medium-sized board company, planned a major asset restructuring, hoping to land in the A-share market through this restructuring, but eventually failed. < / P > < p > in February 2017, the company and Jihong announced that they planned to carry out major asset restructuring. Jihong planned to purchase the equity of e-point world and raise supporting funds by issuing shares and paying cash. In April 2017, the company and Jihong announced the decision to terminate the planning of this major asset restructuring. < / P > < p > according to the IPO observation, after listing on the new third board, the company has completed four fund-raising, with a total financing of 1 billion yuan. The company’s shares will be terminated from April 2, 2018. < / P > < p > the main business of e-point world includes effect advertising service, brand advertising service and head media account management service. From 2017 to 2019 and from January to June 2020, the proportion of effect advertising service revenue in the main business revenue of e-point world was 99.41%, 96.93%, 97.52% and 98.14% respectively. < / P > < p > effect advertising refers to the type of advertising that advertisers settle accounts with Internet media or Internet advertising service providers according to the commercial effects achieved by advertising. The common commercial effects include app download, APP installation, user registration, commodity purchase, etc., which can be summarized as settlement according to CPA model. CPA refers to cost per action. The cost per effective conversion is a common charging mode for effect advertising. The specific effect can be further subdivided into sales (CPS), Download (CPD), install (CPI, cost per install), registration, purchase, retention, etc. < / P > < p > Zou Xiaowu is the controlling shareholder and actual controller of e-point world. As of the signing date of the prospectus, Zou Xiaowu directly held 120 million shares of the company, accounting for 30.18% of the total share capital before the issuance; meanwhile, Zou Xiaowu indirectly held 0.84% of the company’s equity through Ningbo Zhongdian. Zou Xiaowu directly and indirectly holds 31.02% of the company’s equity. < p > < p > Zou Xiaowu: male, born in June 1987, Chinese nationality, no permanent right of abode abroad, master’s degree. When Zou Xiaowu went to the United States to study for his master’s degree, he came into contact with internet marketing business and tried to start a business. With his experience and accumulation in the field of Internet marketing, Zou Xiaowu returned to China to start his own business in 2011. From September 2009 to November 2012, he served as CEO of chuangxiang network media company; from December 2012 to November 2015, he served as CEO of NDP; from December 2015 to now, he has served as chairman and general manager of e-point world. < / P > < p > Yidian Tianxia plans to issue no more than 75.517 million new shares in the gem of Shenzhen Stock Exchange, accounting for no less than 10% of the total share capital after the issuance. It plans to raise 1.242 billion yuan, including 892 million yuan for “program advertising platform upgrade project”, 150 million yuan for “R & D center construction project” and 200 million yuan for “supplementary working capital”. The sponsor of this issue is CITIC Securities. < / P > < p > in the two years after 2017, the cash received by e-point world was less than the revenue. In 2017, 2018, 2019 and from January to June 2020, the company’s operating revenue was 1.799 billion yuan, 1.979 billion yuan, 2.493 billion yuan and 1.068 billion yuan respectively, and the cash received from selling goods and providing services was 1.904 billion yuan, 1.844 billion yuan, 2.276 billion yuan and 1.316 billion yuan respectively. < / P > < p > in 2018, the company’s net profit dropped by 27.77% year-on-year. In 2019, the company’s net profit rose by 25.83% year-on-year, but it is still less than that in 2017. In the same period above, the net profit of e-point world was 265 million yuan, 191 million yuan, 241 million yuan and 93 million yuan respectively, and the net cash flow from operating activities was 376 million yuan, – 34.7931 million yuan, 242 million yuan and 117 million yuan respectively. The company’s net cash flow from operating activities was negative in 2018, mainly due to: (1) the cash paid for purchasing goods and accepting services increased significantly, mainly due to the increase in the company’s large-scale media promotion business revenue in 2018, according to the company’s prospectus. Google, Facebook and other large media providers have strong bargaining power on payment cycle. In order to obtain better business terms (such as rebate) and more preferential flow purchase cost, the company pays part of the flow purchase cost in the form of prepayment, resulting in a substantial increase in cash for purchasing goods and accepting service payment. In 2018, the company cooperated with Facebook partner yino (Hong Kong) Digital Technology Co., limited, Limited has just cooperated with Facebook in 2018. In order to expand its business scale, both sides negotiated to settle in the form of prepayment, which gives the company a higher discount. As of December 31, 2018, the balance of the company’s prepayment to yino (Hong Kong) Digital Technology Co., Ltd. was 32.6848 million yuan. With the deepening cooperation between the two sides, the two sides will no longer use prepayment for settlement in 2019. (2) The cash outflow paid to and for employees increased compared with that in 2017, mainly due to the substantial increase in the company’s performance in 2017, the year-end bonus accrued at the end of the period increased significantly year-on-year, and was issued in 2018, resulting in a large increase in cash outflow. (3) The cash outflow of various taxes paid increased in 2018 compared with 2017, mainly due to the impact of income tax payment. In 2017, the business was overfulfilled, the profit increased significantly, the corporate income tax increased year on year, and the income tax in the fourth quarter of 2017 was paid in 2018. (4) Before 2018, the company’s collection of accounts receivable was not timely, resulting in slow collection of accounts receivable. < / P > < p > the proportion of accounts receivable in the company’s revenue continued to grow. From the end of 2017 to the end of 2019 and the end of 2020, the balance of accounts receivable of e-point world was 504 million yuan, 695 million yuan, 956 million yuan and 720 million yuan respectively, accounting for 28.04%, 35.12%, 38.33% and 67.49% of the current operating revenue. < / P > < p > in each period, the company’s overdue accounts receivable are far behind the net profit of the same period. In each period, the original value of overdue accounts receivable of e-dian Tianxia was 385 million yuan, 437 million yuan, 434 million yuan and 395 million yuan respectively. As of September 30, 2020, the amount collected was 367 million yuan, 388 million yuan, 342 million yuan and 253 million yuan respectively; as of September 30, 2020, the amount not collected was 181.737 million yuan, 49.1074 million yuan, 91.2162 million yuan and 143 million yuan respectively. In the same period, the net profit of e-point world was 265 million yuan, 191 million yuan, 241 million yuan and 93 million yuan respectively. According to the prospectus of e-point world, the proportion of accounts receivable in revenue has increased year by year, mainly due to the large increase of accounts receivable of some customers at the end of 2019