Author: Mu Qing, Editor: Xiao Shimei
After the first two submissions failed due to the expiration of the limitation period, on December 15, 2023, Qumaru Group (full name: Guangzhou Qumaru Network Technology*** submitted the form to the Hong Kong Stock Exchange for the third time. And this time, the Fun Pill Group has changed its thinking and plans to deal with the special purpose acquisition company (SPAC) Vision Deal HK Acquisition Corp (07817.).HK) merger.
However, regardless of the name, a rigorous and comprehensive listing review is still indispensable. The performance of Qumaru Group has declined in recent years, with a cumulative loss of more than 2 billion, the founder's ultra-high salary, low core business threshold, and many violations, etc., all make the third sprint result full of unknowns.
[The accumulated loss exceeded 2 billion, and the founder took 2.]500 million salary and benefits].
In 2014, the predecessor of Quwan Group, Guangzhou Quwan, was established, and the founders were Song Ke, Chen Guangyao and Qiu Zhizhao. Song Ke is the actual controller of Qumaru Group and also serves as the chairman and general manager of Qumaru Group. At that time, it was a period of explosive growth of domestic games, coupled with Song Ke's rich management experience, Qumaru Group quickly gained a foothold and grew.
At present, Qumaru Group has three core businesses, namely TT voice, TT e-sports and TT games, and the majority of its revenue is mainly TT voice, which is mainly committed to providing users with a platform for communication and interaction, and finding suitable playmates for customers.
Fun Pill Group TT voice business model, ** prospectus.
According to data from Frost & Sullivan, in terms of revenue in 2022, the TT voice market share of Qumaru Group is 1305%, is the largest voice social network platform in China. However, even as a leading enterprise, it is difficult for Qumaru Group to tell investors a good story of profitability.
According to the prospectus, from 2020 to the end of June 2023 (referred to as: the reporting period), the operating income of Qumaru Group was 149.3 billion yuan, 263.1 billion yuan, 340.2 billion and 162.7 billion yuan, while the net profit in the same period was -15.4 billion yuan, -249.6 billion yuan, 50.9 billion and 1$8.1 billion.
The operating performance of the Fun Pill Group in recent years, ** prospectus.
It is not difficult to see that net profit will turn losses into profits in 2022, while in the first half of 2023, revenue and net profit will decline to varying degrees, of which revenue will decline by 1 year-on-year93%, while net profit fell by 37 year-on-year61%。Moreover, the loss in 2021 increased by 15 compared to 202021 times, and in 2022, it will turn a profit, so it cannot be ruled out that the company will carry out a "big bath" operation in 2021.
And even if Qumaru Group has turned losses into profits since 2022, as of the end of June 2023, the cumulative loss on its books is still as high as 232.1 billion yuan, according to the current level of profitability, there is still a long way to go to make up for losses.
It's just that the company's earnings have not affected the income of executives. In the three years from 2020 to 2022, the total remuneration and benefits of Qumaru Group to all directors is 30.4 billion yuan, of which there are about 25.3 billion yuan went into Song Ke's bag. And in 2021, when the overall loss of Qumaru Group is nearly 2.5 billion yuan, Song Ke's salary alone will reach 14.9 billion yuan.
As the core figure of the company, Song Ke's salary is relatively high, but a company with a total revenue of only about 3 billion yuan and a large loss that year gave nearly 1 to the chairman and general managerThe salary of 500 million yuan is indeed a bit incredible.
And the things that make people wonder about the Qumaru Group are far more than that.
[The valuation has increased by 3 times in seven months, and the threshold for core business is low].
Fun Pill Group was born at a good time, when the domestic game market was in the ascendant, hot money was piling up, and Fun Pill Group, as a leading enterprise, was naturally not short of capital.
Qumaru Group has mainly made three rounds of financing. Tencent, Jingwei China and others have thrown olive branches to it.
In November 2020, Qumaru Group completed a round of financing and introduced Jingwei China to obtain 4719$510,000 Series A financing, at which point its post-investment valuation was 2$6.2 billion. In December of that year, it conducted Series B and B+ rounds of financing respectively, receiving $40 million and $20 million in financing respectively, and the post-investment valuation also increased from 26.2 billion yuan climbed to 4400 million yuan, and further climbed to 5$500 million, an increase of 10992%, and this is in less than two months.
In June 2021, less than seven months after the completion of the Series A financing, Qumaru Group launched a Series C financing, introduced institutional investors such as Tencent's subsidiary Image Architecture, and injected $45 million, further pushing the valuation to 10$4.5 billion. In just seven months, the post-investment valuation has increased from 2$6.2 billion soared to $10$4.5 billion, an increase of 29885%。
At present, it seems that the development of the Qumaru Group cannot support its 10$4.5 billion valuation.
At present, the absolute majority of the revenue of the Qumaru Group comes from TT voice. The revenue of TT voice mainly comes from the purchase of virtual items and membership subscriptions on TT voice between users and when users interact with anchors, generally speaking, it is mainly in two categories: reward and rights purchase.
However, on the one hand, the average number of monthly paying users of the Fun Pill Group has declined. In the first half of 2023, it will be 8970,000 months, down 1816%。
The average monthly paying users of the platform, ** prospectus.
On the other hand, this business model is also heavily dependent on streamers, guilds, and game developers, so there are large royalties. During the reporting period, its revenue share expenses were 43.3 billion yuan, 92.2 billion yuan, 129.7 billion yuan and 60.9 billion yuan. Its proportion of operating costs has remained at a high level of more than 80%.
Royalty situation in recent years, ** Prospectus.
High costs also deteriorated the profitability of the company, and the company's gross profit margin fell from 65% in 2020 to 54 at the end of June 2023 during the reporting period9%。
The reason for this embarrassing situation is mainly due to the fact that the threshold of the core business of the Fun Pill Group is not high, and it cannot form its own moat.
The technical threshold of real-time audio itself is very low, although a variety of voice social based on chat + interactive mode has evolved into many different apps and scenarios, but the soup is not changed, all are similar routines, at present, there are more than 200 domestic companies have released related products, and with Douyin, Kuaishou, Himalaya, NetEase Cloud, etc. in this field, the industry competition has become more and more fierce. In the face of big capital, the first-mover advantage of Qumaru Group has become extremely weak and is constantly being eroded.
How to find the point of innovation and breakthrough in TT voice has become the key to business survival and development. In the operation of enterprises, legal compliance is particularly important, and even more so for enterprises that want to sprint to go public, compliance issues are no trivial matter, however, Qumaru Group has repeatedly violated the rules in recent years.
[Repeated violations of the business, more than 4,000 complaints].
In February 2021, the Guangdong Provincial Communications Administration issued the "215 Apps Ordered by the Guangdong Provincial Communications Administration to Rectify within a Time Limit (January 2021)", in which the social networking app "Soundhole" was ordered to rectify due to infringement of rights and interests. The "sound hole" is developed by Guangzhou Shabak Network Technology, a wholly-owned subsidiary of Qumaru Group.
Acoustic Hole" violations, **Guangdong Provincial Communications Administration official website.
Not only that, in July 2021, TT Voice was notified by the Ministry of Industry and Information Technology (MIIT) for "illegal collection of personal information". As of the end of June 2023, Qumaru Group has three ongoing lawsuits related to refunds related to suspected minor consumption activities, and in the past three years, the total number of refunds related to underage consumption activities has exceeded 10 million.
At present, there are more than 4,000 complaints about TT voice on the Black Cat complaint platform, most of which involve underage consumption, non-refund, overlord clauses and other issues.
Black Cat Platform Complaints, **Black Cat Complaint Platform Official Website.
It is the responsibility of society to protect the physical and mental health of minors and restrict minors from indulging in games, and relevant game companies should play the role of gatekeepers for this purpose, strictly implement this instruction, and fulfill their responsibilities to protect young people, instead of touching the bottom line for the sake of the company's revenue and scale, making the identification of minors and real-name authentication useless, let alone inducing minors to recharge games or reward anchors.
The Measures for the Administration of Online Gaming (Draft for Solicitation of Comments) released on December 22 aims to further regulate the gaming industry. After the final implementation of the measures, the management of the game industry will be more standardized and stronger, and some non-compliant behaviors of the Qumaru Group will be further supervised and stopped, which will of course affect the company's operation to a certain extent.
Before the new regulations are really implemented, how to quickly and effectively clean up the existing problems and problems, so that they can grow refreshed and healthy, has become an urgent problem to be solved in front of Qumaru Group.
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This article involves the content of listed companies, and is the author's personal analysis and judgment based on the information publicly disclosed by listed companies in accordance with their statutory obligations (including but not limited to temporary announcements, periodic reports and official interactive platforms, etc.).The information or opinions contained herein do not constitute any investment or other business advice, and Market CapWatch disclaims any liability for any actions resulting from the adoption of this article.
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