Global e-buy is in debt crisis

Shenzhen global e-commerce Co., Ltd. (hereinafter referred to as “global e-commerce”) is a wholly-owned subsidiary of cross border communication (002640. SZ), a listed company. After it was revealed in September 2020 that it owed its suppliers, the debt collection storm has gone on for more than three months and has not stopped. < / P > < p > “in recent months, the Shenzhen headquarters of universal e-buy often see suppliers who come to collect debts. Some suppliers even set up shop in the hall of universal e-buy in order to collect debts.” Recently, several other suppliers of global e-buy reported to China Business Daily that global e-buy still owes many suppliers. < / P > < p > an employee of global e-buy said, “there are more than 3000 suppliers in total who owe money, about 450 million yuan to suppliers and 300 million yuan to logistics, totaling more than 700 million yuan.” As for the scale of debts owed to suppliers by universal e-buy, the relevant person in charge of the brand of universal e-buy told reporters, “I have no way to reply and confirm this to you.” < / P > < p > as for the global e-buy which has not yet solved the debt crisis, the relevant person in charge of the global e-buy brand mentioned above can only reluctantly tell the reporter that cross-border e-commerce originally belongs to light assets, and the financing means are relatively thin. At present, the company is actively seeking some ways to solve the debt problem of suppliers. < / P > < p > a home furnishing supplier of universal e-buy told reporters that he had business relations with Shenzhen universal e-buy since 2016, and up to now, universal e-buy owes them more than 2 million yuan. According to the payment details sent by the supplier to the reporter, the earliest debt owed by universal e-buy to the household supplier can be traced back to September 30, 2019. At that time, the latest payment date promised by Shenzhen universal e-buy was September 30, 2019. Now, the debt has been in arrears for more than a year. Over the past year or so, he repeatedly asked for debts from global e-buy, but to no avail. < / P > < p > Wang Hua, a consumer electronics supplier (not his real name), told reporters that from 2019 to 2020, global e-buy owed them more than 1 million yuan for orders. < / P > < p > it is not a case that global e-buy is accused of defaulting on the payment of many suppliers. In September 2020, it was exposed by the media that global e-buy defaulted on payments from several suppliers. At the same time, according to China judicial document website, global e-buy has recently been involved in a number of contract disputes, all of which are related to arrears of payments to suppliers. On June 9, 2020, the people’s Court of Nanshan District, Shenzhen City, Guangdong Province accepted the dispute over the sales contract between Ningbo Liming metal products Co., Ltd. and universal Tesco. Ningbo Liming metal products Co., Ltd. filed a lawsuit with the people’s Court of Nanshan District, Shenzhen City, Guangdong Province, demanding universal Tesco to pay 1.2175 million yuan for goods and 243500 yuan for liquidated damages. < p > < p > on September 9, 2020, the case of dispute over the sales contract between Ningbo hesman Technology Development Co., Ltd. and universal e-buy was filed in Ninghai County People’s court, Ningbo City, Zhejiang Province. Ningbo hesman Technology Development Co., Ltd. filed a lawsuit with Ninghai County People’s court, demanding universal Tesco to pay 929800 yuan. In addition, Zhigu supply chain (Shenzhen) Co., Ltd., Dongguan minghongkai Industrial Co., Ltd. and Shantou Dingyu toy Technology Co., Ltd. all applied to the court for pre litigation property preservation, requesting to seal up, detain and freeze the property under the name of universal e-buy. < / P > < p > as for the scale of arrears, the reporter asked the relevant person in charge of the global e-buy brand for confirmation. The person in charge only said, “the arrears are in the process of dynamic communication and processing, and we have no information to disclose.” < / P > < p > established in 2007, global e-buy is one of the earliest pioneers of cross-border e-commerce platforms in China. Cross border communication, a listed company, formerly known as Baiyuan pants industry, is controlled by Yang Jianxin and his wife. In 2014, cross-border Tong acquired 100% equity of global e-buy with 1.032 billion yuan and became its wholly-owned subsidiary. In 2018, cross-border Tong wholly controlled patson and acquired Youyi e-commerce, integrated the advantageous resources of the industrial chain, and built a cross-border import and export business ecosystem, which is also known as the first share of cross-border e-commerce in the A-share market. < / P > < p > nowadays, global e-buy has become one of the main enterprises of cross-border communication. According to the financial report, the revenue of global e-buy in 2019 is 8.5 billion yuan, accounting for about 48% of the total revenue of listed companies. However, the net profit of global e-buy in that year was 2.65 billion yuan. It is precisely because of the decline of global e-buy’s revenue performance in that year, the clearance of unsalable inventory and the withdrawal of inventory impairment reserves that cross-border communication has realized The annual net profit was 2.7 billion yuan. < / P > < p > Global e-buy also had a brilliant moment. Our reporter combed the cross-border financial report and learned that in 2017, global e-buy realized an operating revenue of 11.4 billion yuan, a year-on-year increase of 59.72%; and realized a net profit of 710 million yuan, a year-on-year increase of 108.57%. In 2018, the revenue of global e-buy increased again, reaching 12.4 billion yuan, an increase of 8.44% over the same period of last year. However, the net profit of global e-buy “changed face” and decreased by 65.31% over the same period of last year, with a profit of 247 million yuan. The net profit attributable to the shareholders of the listed company in the annual report of cross-border communication in that year was 620 million yuan, a decrease of 17.07% compared with the same period of last year. This was mainly due to the sudden increase of the provision for the falling price of financial inventory of global e-buy to 573 million yuan, which was once concerned by the outside world. For this “face change”, the explanation given by cross-border communication is that in the second half of 2017, global e-buy’s inventory stock increased, and the inventory balance increased by about 1.3 billion yuan compared with the end of the previous year; in 2018, it encountered a tightening of liquidity. With the tightening of external bank financing policies, bank channel financing decreased by about 700 million to 800 million yuan in the third quarter and the fourth quarter, which made the peak sales season in the fourth quarter fail to advance as expected Advertising investment and promotion, part of the historical inventory missed the best time to sell. < / P > < p > “it seems that there were more than 4000 people in 2017 and 2018, and there were only more than 2000 people in August 2020. Now there may be fewer people. In the past, there were three buildings, but now there is only one left.” A supplier of global e-buy told reporters. Another supplier told reporters: “the insiders of the company told him that there are more than 1000 people in the company now, and the number will be reduced to more than 500 by the end of the lunar calendar.” < / P > < p > in the face of arrears from many suppliers, universal e-buy is also trying to save itself. The relevant person in charge of the brand of universal e-buy said that there is indeed a way to extend the repayment time of suppliers. At present, the company is also actively raising funds in various ways, including the sale of the import division of universal e-buy in the second half of 2020. < / P > < p > the reporter noticed that on September 23, 2020, cross border Communication issued the announcement on the sale of assets by subsidiaries, which will sell 90% of the equity of Shenzhen junmeirui, the main cross-border import business company of universal e-buy. < / P > < p > in contrast to the shrinkage and layoffs of universal e-buy, the number of security personnel under the building has increased. “There used to be eight security guards in the daytime, but now there are two more.” When the reporter talked with a security guard as a supplier, the security guard said that he came to global e-buy as a security guard in early 2020. According to him, from the second half of 2020, more and more suppliers came to global e-buy to collect debts. < / P > < p > “in November 2020, a supplier of surveillance cameras in Dongguan was owed about 10 million yuan by universal e-buy. More than 20 people came, and several others were sleeping in the lobby of universal e-buy at night.” The security guard of universal e-buy is not surprised at the suppliers who come to collect debts. The security guard said, “almost every week, suppliers come to collect debts.” < / P > < p > once there is a supplier on the floor of universal e-buy, it will attract the attention of the local police station and the community, “this situation has been going on since June and July 2020.” When the reporter communicated with the community staff as a supplier, the community staff said, “the large company that has been owed tens of millions of yuan has directly taken legal action.” In early 2020, novel coronavirus pneumonia epidemic swept the world in

. In fact, the epidemic has boosted online transactions and also brought opportunities for cross-border e-commerce to de inventory. < p > < p > in the 2020 semi annual report, cross border Communications said that global e-buy strategically focuses on the clothing business. At present, the clothing business operation takes the brand matrix as the core, with a total of zaful, rosegal and dresslily brands. At present, the market of clothing business is mainly concentrated in North America and Europe. During the epidemic period, the unit price and conversion rate of clothing have been further improved. Cross border communication reported in mid-2020 that in the first half of the year, it achieved a revenue of 9.087 billion yuan, an increase of 1.31% compared with 8.97 billion yuan in the same period of last year, of which, the operating revenue of global e-buy reached 3.976 billion yuan during the reporting period. < / P > < p > “the sales volume in the first half of 2020 is mainly created by destocking. According to reason, the sales volume in the second half of 2020 should be twice that in the first half of 2020, but it may not be reached. The inventory has almost sold out, and the supplier will not supply.” Global e-buy insiders to this analysis. < / P > < p > “the epidemic situation has brought the opportunity of destocking and revenue to universal e-buy, but it still owes a huge amount of money to its suppliers, and it is still unable to take out money in the face of debt collection from suppliers. Why?” Some suppliers have raised such questions. < / P > < p > an employee of global e-buy said that the revenue from destocking was mainly due to the company’s repayment of part of the bank loans, which also made the company unable to repay the suppliers’ debts. According to the financial report data in the half year of 2020, the accounts payable of cross-border communication reached 1.268 billion yuan. < / P > < p > the relevant person in charge of the above-mentioned global e-buy brand explained to the reporter, “our financing means are relatively thin, for example, cross-border e-commerce does not have heavy assets, and the previous accrual will increase the pressure on our financing, so we will further tighten our capital. Although we are actively operating our business, such as de stocking, the overall capital demand for this aspect is still relatively large, so we are also gradually and benign processing. In addition, we still have some bank loans to repay, which will cause great financial pressure if they are stopped. ” < / P > < p > “in the past, global e-buy always said that it would sell the clothing business unit for about 1.8 billion yuan. Now it says that the clothing business unit will not sell, but will sell patson. Patson can sell about 3 billion yuan. The money sold will return to the cross-border communication system and be used to repay the supplier’s debt.” The staff explained to the supplier that at present, it is not insolvent and has the ability to repay, but it has not yet been realized. < / P > < p > Disclaimer: the purpose of this article reprinted by CNFC is to convey more information, and it does not represent the opinions and positions of CNFC. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk. < p > < p > Chinanet is a state key news website under the leadership of the Information Office of the State Council and the management of China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website publishes information 24 hours a day. It is an important window for China to carry out international communication and information exchange.