On June 7, Stormwind issued an announcement responding to its related '50 million mini-financing', 'two consecutive years of loss', 'repayment gap' and other reports. In the announcement, Stormwind Group stated that 'the content of the rumor is not true. Misleading to investors. '
Following the fall of the Storm Group shares on June 6th, the storm's share price fell again by 4.8% on June 7.
Storm response to market questions
Some media reported that Storm Group’s 'sales decline' and 'two consecutive years of losses'. In the 7th announcement, the storm listed recent financial data to refute. According to the company’s 2017 annual report, the company’s 2017 The annual operating revenue was 1.915 billion yuan, an increase of 16.25% compared to 2016. There was no media rumors 'a slight decline from 2016'.
According to the annual report, from 2015 to 2017, the operating income of the storm was 1.915 billion yuan, 1.647 billion yuan, 652 million yuan; net profit was 173.133 million yuan, 52.817 million yuan, 55.139 million yuan.
As for the report on the company's debt repayment gap, the company's asset-liability ratio is considered to be “normal level in the industry” in terms of storm. A staff member of the Storm Group’s securities department told reporters that the “debt ratio is in the normal level of industry” judgment. Based on the financial data of other companies in the same industry, but the staff did not indicate which companies are in the same industry. According to the public statistics, the asset-liability ratios of 2016, 2017 and 2018 of Stormwind were 67.69% and 64.86%, respectively. 65.18%.
On June 5th, Stormwind Group announced a fixed-income plan, and plans to issue no more than 3 million shares to non-public investors of not more than 5 specific investors. The amount of funds raised shall not exceed 50 million yuan. Compared with the previous withdrawal of 1.8 billion yuan, Refinancing applications, the amount of financing has shrunk dramatically.
In this regard, the storm considered that 'the amount of funds raised is not sized, and the project investment of 50 million yuan is in line with the company's strategy of running small steps and continuous iterations in research and development'. The storm also said 'the company as a leader in the Internet entertainment industry needs to be enhanced. Its own capital strength'.
Two-year net cash flow outflow
Stormwind Group financial data shows that in the past two years, its cash flow has been negative. In 2016 and 2017, the company's cash outflow was 175 million yuan and 493 million yuan.
A large amount of cash outflow may be related to the diversification of business of Stormwind Group. In the previously announced plan of non-public offering of stocks, the storm indicates that the company is 'actively developing platform layout, continuously enriching products and services', and at the same time the company’s “DT big entertainment” Under the strategy, the company's business is gradually diversified.
In recent years, Stormwind Group has diversified its development, VR business, and TV business are all involved. The annual report shows that last year the brand's smart TV sales were only 840,000 units, which is lower than the 2 million units that storm executives claimed in mid-2017 Goal. This figure only slightly increased by 40,000 from 2016.
The above-mentioned staff told reporters that the sales of Storm TV in April this year were good. According to the data released in the storm, the loss of TV products in the first quarter of this year was 45% lower than the same period of last year.
At the same time, in the last three years and the end of the first quarter of 2018, the inventory balance of Stormwind Company was 105.0081 million yuan, 526.5509 million yuan, 65879.98 million yuan and 6821.097 million yuan respectively.
■ Extension
Storm refused to wear 'little music' hat
In recent years, Storm Group has diversified its development, VR business, betting TV business, known as the smaller version of 'LeTV.com'.
However, the storm did not agree with this statement. A staff member of the company’s securities department told reporters that the business of Storm was very different from that of LeTV. The storm’s founder and chairman Feng Xin was interviewed by the Beijing News reporter earlier. Said that the core problem of LeTV, the storm is not one.
Letv investors, venture deep execution previous interview, said Liu Gang, general manager, the music network's core problem is not that eco-building, but in the main business without a solid foundation, can only rely on financing in mobile phones, televisions, cars, etc. In the field expansion, capital chain issues are prone to occur, but Liu Gang believes that there is no problem with LeTV’s extension of the film and television business. If there is a lack of strength in the main business, blindly expanding the two points, the storm is somewhat similar to LeTV.
In the three years since the listing, the storm group's net profit has been declining and has not demonstrated its core profitability. In the first quarter of 2018, the Storm Group’s revenue was 387 million yuan, a year-on-year decrease of 13.70%; the net profit attributable to the mother was -25.54 million yuan, a year-on-year decrease of 79.27. %.
3. The business performance was sluggish, but M & A, expansion business has made great progress.
In March 2016, Stormwind Group plans to acquire 100% equity in Ganpu Technology, 60% equity in Baocao Xiong Film, and 100% equity in Active Technology for 3.105 billion yuan. It is understood that the rate of PE of the three target companies acquired by Stormwind Group reached respectively. 106 times, 38 times and 60 times, the premium is higher.
In the face of doubts from outsiders, Stormwind responded that they purchased these three companies in order to enter the three major businesses of film and television, games, and overseas operations, and perfected the overall strategic layout of DT Entertainment. However, the China Securities Regulatory Commission subsequently acquired the profitability of the target companies. The reason for the greater uncertainty's negation of Stormwind's acquisition plan.
Constantly external expansion and main business sluggish, so that Storm Group is also facing financial difficulties. Storm Group adopted a fixed increase and pledge similar to LeTV.
In 2015, Stormwind Group obtained cash of 294 million yuan through absorbing investment. In 2016, this figure was 337 million yuan, but 79% of the amount was obtained through the consolidated subsidiary.
As of June 6, 2017, Feng Xin accumulatively pledged 41.008 million shares of storm stocks, which accounted for 69.98% of its total shares, and accounted for 14.82% of the company's total share capital. Stormwind Group's announcement showed that as of May 31, Feng Xin accumulatively pledged. The stock was 6705.11 million shares, accounting for 95.35% of the total shares held by it.
Now, the cash flow of Stormwind Group is in a tight state, and the business is similar to that of LeTV before. Can we take off the hat of 'Next LeTV' in the future?