#长文创作激励计划#
Author / Tomato under the stars
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In recent years, with the strengthening and standardization of supervision, the surviving old cash loan companies have sought business transformation, and Quant from Beijing (full name: Quant Technology Co., Ltd.) is one of them.
On May 20, 2024, Quant submitted its third report to the Hong Kong Stock Exchange, hoping to seek development in the capital market. However, in the actual development of the company, its commodity trading enabling business, which is the largest part of its revenue, is closely related to financial loans, and there are considerable compliance risks, and the company also has many problems such as insolvency, operating losses, a significant increase in current liabilities, and a decrease in active users, which also makes the sprint results very uncertain.
First, the operation is tired and the performance is under pressure
Quant was founded in 2014 and mainly operates two major businesses. According to Frost & Sullivan, in 2023, Quant ranks very high among digital solution providers based on proprietary apps/websites, both in terms of revenue and pay-for-performance revenue, and is considered a leading company in the industry.
However, although the industry status is good, the business performance is not eye-catching. According to the prospectus, at the end of 2021-2023 (referred to as: reporting period), the revenue of the quantitative faction will be 351 million yuan, 475 million yuan and 530 million yuan respectively, which is generally in a state of growth, but its net profit is under pressure as a whole, with values of 54.006 million yuan, -283,000 yuan and 3.643 million yuan respectively in the same period, and the net profit in 2023 is only 6.75% of that in 2021, and the overall decline is very obvious.
Operating results Excerpt from the Prospectus
Moreover, it can be seen that since its establishment, the overall loss of the quantitative faction has reached 253 million yuan, and it has failed to achieve a real profit.
Accumulated losses from the Prospectus
So why did Quantitative's business performance decline so much? The reason is not only market factors, but also because of the company's lack of core competitiveness and irreplaceability.
The two main businesses of Quantitatives are to help sell commodities and then take a share of it. In order to continue to make steady profits, this kind of service helps to continue to make a steady profit, which requires continuous active market consumption activities, and the company has a certain degree of irreplaceability in the services provided. Unfortunately, neither of these is true at the moment.
There are many companies involved in precision marketing in the market, such as Pinduoduo (PDD.US) and Taobao, which can analyze and classify customer needs through big data and push them accurately. At the same time, major banks have stepped up their efforts to provide consumers with services such as credit card payment and installment repayment, and at the same time vigorously promoted shopping malls on mobile banking. These are constantly cracking down on third-party service companies, and the number of monthly active users of "Yang Xiaoba" has also dropped from 757,000 in 2021 to 521,000 in 2023, a decrease of more than 31%.
Moreover, since the official implementation of the "Credit Investigation Measures" in 2022, the supervision has been further tightened and standardized, and more and more financial institutions have gradually terminated their cooperation with third-party platforms. For example, the number of financial institutions cooperating with quants dropped from 30 in 2021 to 6 in 2022, a drop of 80%.
Whether from the perspective of the market environment or core competitiveness, Quant does not seem to have the ability to make profits for a long time. And the company's current financial situation has already revealed a fig leaf.
Second, the gambling that cannot be escaped is insolvent
According to the prospectus, as of the end of December 2023, the net assets of the quantitative faction were -1.093 billion yuan, and the asset-liability ratio was as high as 278%, which was already in a state of insolvency, and at the end of 2021, its net assets were still 216 million yuan. In 2022, as Quan's total current liabilities soared from $84 million to $1.491 billion, its net assets also dropped to -$1.089 billion.
Insolvency Extract from the Prospectus
The sharp increase in current liabilities in 2022 was mainly due to the addition of RMB1,416 million under financial instruments with priority to measure the obligation to redeem the Company's equity instruments with cash or other financial assets.
And this is inseparable from the VAM agreement signed by the company. As can be seen from the Prospectus, the right of redemption has been terminated when the initial listing application is submitted on June 29, 2022, but if there is a failure to complete the qualified listing within the prescribed period or there is a change in the controlling position of the founding shareholders over the group, the right of redemption will be automatically restored, and the deadline for listing is not stated in the Prospectus.
Status of Shareholders' Agreement Excerpt from the Prospectus
It is not difficult to see that there is still a possibility that the redemption clause will be triggered. As of the end of 2023, the cash and equivalents on the quantitative distribution account will only be 111 million yuan, and how to fill the redemption obligation of more than 1.4 billion yuan at that time?
The business of quantitative, because it is closely related to the loan problem, is always a troublesome matter that cannot be avoided.
Third, there are tens of thousands of complaints
The predecessor of the "Yang Xiaoba" platform is the "credit wallet" platform of the quantitative pie, and the "credit wallet" is a well-known cash loan platform in the industry, which acts as an intermediary service provider to connect financial institutions, lending enterprises and individual users, and collects handling fees by providing pricing risks and post-loan services.
After the transformation into "Yang Xiaoba", it provides end users with two loan functions: flower card and reserve fund. The Xianghua Card is only used for users to purchase retail goods provided by business partners on "Yang Xiaoba", and after the user initiates an application for the purchase of goods with the Xianghua Card, the financial institution pays the price of the goods for them, and Quanhua earns a commission of 0 to 8.6% (depending on the type of service provided) from the loan amount of the financial institution.
Obviously, although Quant is dressed as a "digital solution provider", it has not forgotten the old bank of loan assistance. On the "Card Package" page of the "Yang Xiaoba" platform, there are words such as "easy borrowing" and "maximum consumption limit", and users need to check and agree to the authorization agreement such as "Comprehensive Authorization Letter for Personal Information Inquiry and Use (Credit Reporting Authorization)" when activating.
Regulators attach great importance to the compliance of this business. In the previous submissions, the regulator had asked Quant to explain whether its loan assistance business was a quasi-financial activity, whether it involved personal credit reporting business services, whether it had obtained relevant business qualification licenses, and whether it complied with national laws and regulations.
In the Prospectus, Quant Group itself mentions that the Company collects and stores personal information related to business partners, its customers and its users, and that if such information is accessed without authorization, the Company's reputation may be damaged, and it may face potential liabilities and significant business losses.
In addition, on the black cat complaint platform, there are nearly 20,000 complaints against the "Yang Xiaoba" platform, and the main problems of consumer complaints include being collected after settlement, leaking personal information, violent collection, loan service fee guarantee fee, non-refund after sale, and quality problems of goods.
Black Cat Platform Complaint Excerpt from the official website of Black Cat Complaint Platform
Enterprises involved in online lending or small loan business, has always been the focus of the regulator's attention, the current supervision of online lending has been further tightened, listed companies such as Busen shares (002569), Xinguodu (300130) and other announcements to terminate participation in the establishment of online loan companies, and in the process of listing in Hong Kong stocks, such as Himalaya also because of the business involved in online loans, resulting in no substantial progress in the listing process.
Quantitative's own business does not have much technology and technology component, and the commodity empowerment business carried out on the "Yang Xiaoba" platform has become a big obstacle on the way to its listing.
Note: This article does not constitute any investment advice. The stock market is risky, and you need to be cautious when entering the market. There is no harm in buying and selling.