Profits have been sharply reduced by nearly 300 million, the controlling shareholders have reduced their holdings in advance, and Youzu Network (002174.SZ) has recently received a letter of concern from the Shenzhen Stock Exchange.
The Concern Letter pointed out that it requires that the controlling shareholder knows that the net profit in 2019 will be substantially revised before reducing its shareholdings; and verify whether there are major deficiencies in the company ’s financial reporting internal control.
On April 29, Youzu.com issued a 2019 performance report amendment and apology announcement. The revised 2019 revenue was 3.221 billion yuan, down 10.07% year-on-year; net profit attributable to mother was 257 million yuan, down 74.58% year-on-year. Revenue net profit both fell.
On February 28 this year, the company's 2019 performance report revealed that the company's annual revenue was 3.516 billion yuan; the net profit of the mother was 550 million yuan, down 1.82% and 45.47% year-on-year. In contrast, the reductions in revenue and net profit were 8.4% and 53.38%, respectively.
In addition, from November 27, 2019 to March 13, 2020, Lynch, the company's controlling shareholder and actual controller, reduced the holdings of the company's shares by a total of 14.73767767 million shares in a block transaction, with a reduction ratio of 1.658%, and cashed more than 260 million yuan.
The annual report was significantly revised 20 hours before the release of the annual report, and the controlling shareholder was "precisely" hugely reduced. Why did the "God Operation" of Youzu Network make the newly-increased 32,000 shareholders feel in the first quarter of this year?
Revise performance reveals the mystery of time
A year ago, on April 25, 2019, Ou Fei Guang's 2018 annual report performance "changed face". The profit in the performance report was revised down to a loss of 189 million with 1.839 billion. After a lapse of one year, the protagonist of the script was replaced by the Youzu network.
It is a common matter for listed companies to revise their performance forecasts. However, Youzu.com issued a performance revision announcement "stepping on the line" 20 hours before the disclosure of the annual report, which made investors wonder whether the company intends to create a time window for cooperating with the controlling shareholder to reduce the cash.
Wind information data shows that from January to April 2020, the controlling shareholder has reduced its holdings 7 times, totaling about 181 million yuan.
In this regard, the Concern Letter requires the company to submit a list of inside information insiders revised by this performance bulletin, and to the inside information insiders revised by this performance revision, insiders of the board of directors and supervisors, and shareholders holding more than 5% of the shares in the top three of this performance revision Carry out self-examination and explanation on the situation of buying and selling company stocks every month.
It should be noted that on February 28, Lu Jun, the former financial director of Youzu Network, proposed to resign for personal reasons. Sooner or later, it was puzzling to resign on the day when the company disclosed its first performance report.
Regarding the reasons for the performance correction, Youzu Network explained that due to the epidemic situation, some of the company's personnel were under-recovered, and some domestic and foreign cooperative customers' re-work progress was slow, which led to the limited collection of financial information when the financial department's performance report was issued, which affected the cost confirmation amount.
The announcement also stated that individual account receivables and long-term equity investment accruals resulted in a reduction of 54.417 million yuan and 11.9541 million yuan respectively from the previous performance bulletin; and some game copyrights were not renewed due to expiration, resulting in reduced profits.
The Shenzhen Stock Exchange asked the company to explain the staff attendance rate as of February 28, 2020, the name of the partner who was slow to resume work due to the epidemic situation, the content of the cooperation, and the specific content and degree of restrictions on the collection of financial information.
Behind performance pressure
In fact, after the first disclosure of the 2019 performance report, Youzu Network has not received market recognition. On March 2, the company's stock price closed down 9.51%, almost falling to a limit.
After the company's share price climbed to 32 yuan on February 7 this year, it fell all the way. As of the latest close, it closed at 19.2 yuan.
The performance announcement of the substantial revision also reveals the unoptimistic fundamentals of Youzu Network in 2019. The company's net profit loss from non-returned mothers was 170 million yuan, a year-on-year decrease of 123.07%.
The data shows that in 2019, Youzu Network core launched two games, one is "Game of Thrones" which was launched in July last year, and the version number was obtained in March 2019; The sequel "Young Three Kingdoms 2", which was launched in December last year, has little effect on last year's performance.
At the same time, the overall gross profit margin of Youzu Network declined significantly in 2019, from 56.08% in the previous year to 30.86%. The profitability dropped significantly, but no explanation was given in the annual report.
On April 29, the company disclosed its first quarter report for 2020, and profitability improved. During the reporting period, Youzu Network achieved operating income of RMB 1.211 billion and net profit attributable to its mother of RMB 363 million, up 45.45% and 110.14% year-on-year respectively. The single-quarter performance growth was mainly due to the launch of "Youth Three Kingdoms 2" released in December last year. According to public data, "The Three Kingdoms 2" has a total platform turnover of more than 350 million yuan in February, and this product is steadily ranked at about 10-15 on the AppStore best-selling list.
The income of "Youth Three Kingdoms 2" temporarily resolved the embarrassing situation of the Youzu network. However, after years of development in the game industry, as the mobile Internet user dividends have become farther away, the usage time has gradually saturated, and the depth of payment is close to the level of developed countries, the overall growth rate of the industry has gradually declined, and a competitive situation with increased concentration and survival of the fittest has gradually been formed. Whether the company can reverse the decline in 2019 is still uncertain.
A veteran of a mobile game company in Shanghai told the First Financial Reporter, “The tightening of the version number policy supply requires game companies to change their approach and move from a rapid circling mode to a long-term operation layout. The policy version number approval is strictly Fundamentally regulate the source of the work, avoid the outflow of rough-made works, and lay the foundation for the healthy development of the industry. "
Before reversing the performance decline, Youzu Network is more urgent to give investors a clear explanation-why can the controlling shareholders accurately reduce their holdings? In other words, whether the company's disclosure time for performance revisions has been artificially manipulated.
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