In 2016, the cool mobile phone maker Coolpad began to fall into the quagmire of losses. By 2018, the cool days are still not good.
On the evening of July 23, Coolpad Group announced that as of June 30, 2018, smartphone sales revenue dropped significantly year-on-year.
Cool Group also said that the company’s shares have been suspended for more than 12 months. If the company fails to meet all the conditions for resumption of trading and is satisfied with the Stock Exchange as of July 31, 2019, and will not resume trading in the shares, the Listing Division will The Listing Committee recommends that the company's shares be delisted.
However, even if the main business is in deep crisis, the Cool Group has a land reserve worth tens of billions. This has become the last hope of the cool 'turning over'.
The Daily Economics reporter noted that the Cool Group has recently been in contact with real estate developers and hopes to revitalize huge land resources.
Mobile phone sales revenue dropped sharply year-on-year
On the evening of July 23, Coolpad Group announced that the company's main business is still developing and selling smart phones for the first six months of June 30, 2018. According to the company's management accounts, the group recorded smartphones during the reporting period. Sales revenue dropped sharply year-on-year.
For the reason for the decline in revenue, Cool Group explained that the main reason is that China's smart phone market is highly competitive. Sales in China and Southeast Asia continue to decline. The Group is reducing losses and giving up some products that can bring in revenue but may cause losses. US sales continue to rise. However, in the first half of the year, sales contribution and growth rate were limited. Recently, the winning products were listed and sold in the second half of 2018 and 2019. In order to reduce the loss level, the Group abandoned some low-margin products and strictly controlled various expenses.
At the same time, the Cool Group also stated that it will continue to take a number of measures to enhance the Group's liquidity and financial position, including but not limited to considering the sale of part of the Group's investment properties and the equity of individual subsidiaries of the Company, and actively cooperate with banks, institutions and interested parties. People communicate and negotiate to obtain bank loans or financing.
The Daily Economics reporter noted that it was not until April 2018 that the Cool Group announced its 2016 financial report. The financial report showed that the total revenue of the Cool Group in 2016 was HK$7.969 billion, a decrease of 45.7% year-on-year and a net loss of HK$4,401 million. .
At the same time, the summary of the independent auditor's report of the Cool Group mentioned that the audit opinion of the Cool Group's 2016 consolidated financial statements has not been published due to certain issues 'unable to express opinions' and 'baseline of inability to express opinions'. The auditor pointed out The Cool Group has taken a number of steps to improve its liquidity and financial position, but if the Cool Group fails to achieve its plan, it may need to be adjusted.
In addition, the above announcement disclosed that the audit work of the Cool Group in 2017 is in progress, the company is preparing relevant reports and is expected to be published in early September this year; the financial situation in the first half of this year will be published in mid-November.
Frequent contact with real estate developers
Although it is in deep crisis, the Cool Group is not a capital without a turnaround. After all, the company has a large number of high-quality land resources, including:
Cool Information Port of Shenzhen Nanshan High-tech Industrial Park North District (with an area of over 30,000 square meters);
Tian'an Yungu production base located in Songshan Lake, Dongguan (covering an area of over 100,000 square meters);
The first phase of the Yulong Communication Changan Industrial Park project planned in Xi'an High-tech Zone (covering an area of 87,000 square meters) and the Heyuan Construction Agricultural Ecological Park are worth more than 10 billion yuan.
In order to alleviate the pressure on funds, Coolpad has also begun to contact major real estate developers.
In October 2017, Coolpad announced that it has cooperated with local developers in Shenzhen to develop the Cool Information City Renewal Project – the Cool Headquarters Old Reform Project.
After the completion of the project construction, the parties will distribute the equity according to the ratio of the newly built property of the project (including the project plot ratio floor area and the floor area ratio excluding the floor area ratio), and the developer will receive 60% of the newly built property area. Yulong Communications, a wholly-owned subsidiary of Cool Group, has a total of 40% of the newly built properties.
Not only that, in January this year, Coolpad Group announced that the company’s former largest shareholder had transferred its shares of Coolpad Group to Weiri Ventures Co., Ltd., and the first financial report said that behind Weibo Ventures Shareholders, probably Chen Chen, the founder of Jingji Group, another real estate developer in Shenzhen.
On May 18 this year, Yulong Communications and Jingji Group also signed the highest loan contract, and Jingji Group agreed to provide Yulong Communication with a maximum loan of no more than RMB 500 million for the company's operations. According to the Securities Times 2. Jingji Group is a related person of Weiji Ventures, a shareholder of Cool Group.