Electricity Supplier Listing Puzzle

As the two fast expanding business giants, Jingdong mall and van customer's products play a leading role in the industry. Their listing is of universal significance. And after Mcglaughlin and Dangdang listed on the stock market fell, the failure of handover network IPO for reference, how to face the listing predicament of Jingdong and how to become a problem that should be considered and breakthroughs.

At present, China's electricity supplier websites are frequent and static: IPO has been rejected by the US NASDAQ capital market; the Jingdong mall and Dangdang have launched a price war; and the original plan to sell it in the fourth quarter of 2011 is Vic, with the departure of vice president Wu Sheng (micro-blog), the way of listing has become confusing, and the listing plan of Jingdong mall has also slowed down. In front of the capital market, China's e-commerce website also showed "half dead" signal. Mcglaughlin and Dangdang share prices have shrunk.

　　 The road of listing is in full swing.

At present, the B2C websites with large scale and high concern in China are ready to list Jingdong mall, Fan Cheng pin, the failed hand in hand, and Dangdang and Mcglaughlin who have already achieved IPO in the US.

In October 26, 2010, Mcglaughlin listed on NASDAQ. Mcglaughlin listing is a landmark event in China's B2C industry. It is the first share of China's B2C website galloping through the US capital market. Then Dangdang was listed on the NYSE in the evening of December 8th Beijing time.

The initial announcement of two listed websites is amazing. Mcglaughlin, China's first publicly traded B2C company, issued a IPO price of $11, issuing 11 million 740 thousand shares, and the planned financing amount of $129 million. The closing price on the first day of the listing was as high as 17.26 US dollars, up 56.91%, and the P / E ratio was 157 times; the Dangdang issue price was 16 dollars, and the financing was 272 million US dollars. The first day of listing rose 86.94%, closing price of 29.91 U.S. dollars, at the issue price of 16 dollars, Dangdang net earnings ratio can reach 103 times.

However, behind the bustle, there are dangers. Not long after, Mcglaughlin's stock price fell generally in Waterloo, and now Mcglaughlin's closing price is only 1.28 dollars (take stock price in December 26, 2011 as an example). Dangdang shares rose to more than $30 after listing, but since mid January 2011, its share price has fallen all the way to the close of only $4.66 today (taking stock prices in December 26, 2011 for example).

　　 NASDAQ The market has a 1 dollar delisting rule. That is, if the share price of a listed company is less than 1 dollars per share, and this state lasts for 30 trading days, the Nasdaq market will issue a warning of loss. If a warning company fails to take corresponding measures in the 90 days of warning, it will be declared to stop trading by changing its share price. Mcglaughlin's share price shrank by 90% a year, and we must be alert to the risk of a stock price falling below US $1. In addition, Mcglaughlin was once deeply involved in the vortex of collective action in the US related companies. He accused Mcglaughlin of failing to disclose information in IPO, including the weak trend of Q3 quarterly operation, rising cost costs, failure of internal financial control and so on, thereby misleading investors.

B2C, who is also seeking a listing, is also experiencing the test. The handshake net handed in prospectus to the US Securities and Exchange Commission on 8 November 2011, which was originally planned for listing in November 14th. At the end of the day, it was reported that IPO had died unexpectedly. However, the listed public statements before Vic and Jingdong mall were also suspected to be "no fixed timetable".

"At present, the performance of China's entire B2C enterprises has gradually shifted from a very optimistic atmosphere to a relatively heavy atmosphere." Feng Lin, director of the network finance department of China Electronic Commerce Research Center, said in an interview with China's new era reporter.

　　 Forced listing

E-commerce as an emerging industry in the Internet, its profitability has not been ideal.

Feng Lin told reporters, "at present, all aspects of the cost of electricity providers, including Advertisement The cost of human resources and logistics is expanding rapidly, and the competition among the suppliers is very fierce. For example, Jingdong used to do digital, and now it is like a department store. So at present, it is very difficult for e-commerce websites to make profits.

The financial report of the hand open stock prospectus disclosed that since its establishment in September 15, 2009, the cumulative net loss of the handshake has been more than 470 million yuan RMB; Mcglaughlin's earnings report shows that the net loss of 2011 US dollars in the third quarter was 14 million 400 thousand US dollars; Dangdang net 2011 third quarter financial report showed that its net loss was RMB 73 million 400 thousand yuan; recently, a veteran customer named VANCL was posted on the blog. The salary of personnel is at least 500 million yuan per year, and the accumulated deficit may exceed 2 billion yuan in 4 years. Although customers deny their authenticity, the whole electricity supplier industry is in a state of loss. There is no doubt about that.

The US B2C giant Amazon website was founded in 1995. It only started selling books online, and gradually expanded its business scope, including music CD ROMs, computers, software, electronic products, clothes, furniture and so on. Before the listing was launched in 1997, Amazon was in a loss stage until 2002, with a net profit of $more than 300 million in 2004. After 9 years of struggle, Amazon is now making profits, which seems to indicate the direction for China's B2C website to make profits.

Insiders predict that Domestic e-commerce website Most of them are in the shortage of capital chain. There is not much VC to buy in the new round of financing. Listing is the only way to "cash in the money".

Statistics show that the 3 rounds of financing were launched in June 2010, December and April 2011 respectively, amounting to 5 million US dollars, 50 million US dollars and US $111 million respectively. According to the speed of "burning money" in the Internet industry, it is urgent to re inject funds. The wind market has revealed the trend of watching and declining group buying websites, with capital tightening and private placement more difficult. People in the industry shouted, "the shortage of food and grass is not good enough, but this is the frustration of the handshake net because it needs to survive."

The success of all customers is due to the continuous injection of capital behind. At present, all passengers get 6 rounds of investment, A round of financing 2 million dollars, B round 10 million dollars, C round 30 million dollars, D round 50 million dollars, E round 100 million dollars, F round 230 million dollars, six round financing about 420 million dollars, converted into RMB about 2 billion 700 million yuan. Van guest had planned to launch a new round of financing in the near future, with the scale of financing up to 1 billion US dollars.

The Jingdong mall said it will launch the IPO plan, which plans to raise 40~50 billion, and will soon reach the US capital market in the first half of 2012. According to Feng Lin's analysis, the valuation of Jingdong's C round of financing has reached 10 billion US dollars. This volume is difficult to carry out D round financing. It is the best choice to go public as soon as possible without the profit and bad financing environment.

Qin, an investment company, told reporters that "the key to the operation of e-commerce websites depends on the capital chain. Listing can satisfy the financing of B2C website. After having sufficient cash volume, the website will be able to carry out larger industrial investment and operation, which is better than competitors. This is also the main reason for the disputes of e-commerce websites."

The unprofitable electricity providers are not only alive, but also strong. "This has a lot to do with the promotion of investment behind them. They didn't make money at the beginning, they raised their capital and then thought about their profits," Feng Lin said.

Therefore, the competition in the electricity supplier market is fierce now. They are expanding their scale through advertising campaigns and vicious competition. But the larger the scale, the quicker the burning of money, the more money will have to be injected. "The electricity supplier seems to have entered the vicious circle of financing, burning money, expanding scale and refinancing. When private equity financing plan is wasted, it will go to find a bigger capital market - listing." Mr. Qin said.

Obviously, listing has become a "success treasure" for e-commerce websites that have already smashed into huge capital. At the same time, based on the ascendant of the electricity supplier industry, there will be enough room for development in the future. The electricity supplier industry will form such a state: everyone is fighting in the fire to see who can live to the end, and the surviving electricity supplier will gradually develop towards the profit direction.

Analysts also pointed out that the main reason for the rush of electricity suppliers is the pressure from venture capital investors. In order to make the investors of the previous rounds of financing get timely returns, we must firmly invest confidence. {page_break}

　　 Why do Chinese e-commerce websites choose to list in the US?

"Enterprises that have lost money in China for many years are not eligible for IPO, and corporate profits are a rigid benchmark for listing. The US Nasdaq market is different, providing opportunities for growth enterprises, and the loss situation does not hinder the listing of electricity suppliers. The listing is more concerned about the growth rate of corporate revenue. Feng Lin told reporters.

The US securities market adopts a registration system, and the securities and Exchange Commission is responsible for securities supervision to examine whether the information disclosed by the listed companies is in line with the statutory requirements. That is to say, a listed company requires "complete information disclosure", that is, the issuer must provide all information related to the issuance of securities, and ensure that it is true, comprehensive and accurate. And it does not judge the quality of issuing behavior and securities themselves.

Therefore, the US NASDAQ has become the IPO treasure of China's electricity supplier. According to public data, the sales volume of VCG in 2008 was only 100 million yuan, which reached 500 million yuan in 2009 and 2 billion yuan in 2010. CEO, micro-blog, is targeting the sales target of 10 billion yuan in 2011. According to the data released by Jingdong mall, the annual sales volume of Jingdong mall increased from 10 million yuan to 10 billion 200 million yuan, from 2004 to 2010, with an average annual compound growth rate of 217.27%. According to industry analysis, Dangdang was successfully listed on the concept of China's "Amazon", which was ingeniously packaged. It can be seen that investors are seeing the growth rate of their revenue in the future.

Judging from the current situation, Jingdong mall and Fan Cheng pin pin, as the two fast expanding business giants, have the role of benchmarking in the industry, and their listing is of universal significance. And after Mcglaughlin and Dangdang listed on the stock market fell, the failure of handover network IPO for reference, how to face the listing predicament of Jingdong and how to become a problem that should be considered and breakthroughs.

　　 Listing needs clearance

Since profit is not a limited criterion for listing, then IPO failed. Van guest What is the reason for the delay of Jingdong listing?

"From a macro economic perspective, this is related to the low stock market caused by the depressed financial environment." Feng Lin preached. In addition, at present, the whole Chinese concept stock is encountering a cold current and is in a state of untrust abroad. Foreign companies feel that Chinese companies are in a state of "cheating" against the financial cost and excessive packaging of Chinese companies.

Feng Lin said that Chinese companies are not familiar with the relevant listing rules abroad, causing Chinese entrepreneurs to not understand the management of foreign investment relations, so that they do not attach enough importance to investment management investment. In addition, at present, Chinese companies are highly questioned overseas. Some investors are in the market waiting period. When the Underwriters underwrite and look for investors to buy stocks, they fail because they can not find enough investors or are undervalued.

Specifically speaking, as a group buying enterprise, the handshake network is modeled on the US Groupon website. Groupon has taken the lead in the successful listing. However, the investors are very dissatisfied with Groupon's failure in performance, and the whole market is in a state of rethinking about the new business mode of group buying. Therefore, the current US stock market is not the best window for listing. After that, it was found that the counterfeit phenomenon was found in financial affairs, which made the handshake net worse than ever, causing investors to not respond to IPO. It is said that CCTV has also exposed the hand net to tamper with the backstage data, falsely report the qualification of operation and purchase the number of false targets.

The reporter concluded that the factors affecting the listing of enterprises are: problems of profitability, defects in the main qualification, high risk of investment and investment, poor quality of information disclosure, and financial accounting problems.

When the profitability of a company is declining, its valuation of IPO may not be ideal during the listing process. Enterprises are naturally reluctant to list at lower valuations. In terms of subject qualification, the directors and senior managers of the issuer have not changed significantly during the past two years, and the actual controller has not changed.

As far as customers are concerned, at the time of IPO, Wu Sheng, vice president of venture elders, suddenly left. In the meantime, the industry was talking about it. Information disclosure and financial accounting problems were more important issues for the listed companies in the United States. The listed companies demanded timely and accurate information disclosure, prohibit the abuse of accounting policies or accounting estimates, and allegedly whitewash the financial statements through financial means. Mcglaughlin encountered class action and financial fraud of handshake net, which touches the "minefield" listed.

About Jingdong mall, Feng Lin said, because of its large scale, IPO valuation is too high, and enterprises in successive years of losses. In the current economic downturn and the bleak China concept stocks, the capital market is cautious about the big valuation of IPO. "Early this year, many enterprises postponed the IPO because of poor response from underwriters. Underwriters pressed prices according to the responsiveness of investors. When prices were not high, IPO would fail or postpone. This is not to say that enterprises are not good, but the current overall financing environment is particularly unfavorable for China's concept stocks, especially the Internet emerging industries. Feng Lin told reporters.

　　 Out of difficulties

Listing is a means, not an end. CEO Lin Jiaxi (micro-blog) of Baijin Investment Consulting Co., Ltd., said that for e-commerce enterprises, only the annual profits exceed tens of millions of dollars, the listing will be meaningful. Otherwise, even if listed, the PE of the enterprise will also be very low, and the capital raised will be very limited. On the other hand, once the listed companies are listed, they must accept strict financial control, achieve fair and transparent operation, and diversify their shareholdings, and they will also be restricted by shareholders in all aspects of investment and market expansion. These are not necessarily good things for businesses that are not yet standardized and have yet to grow. And collective rush to market is not a good time either.

"At present, China's listed companies are often short of some foreign research institutions, which requires the listed companies to explain to the public and communicate with investors. Companies should invest more in investor relations management and enhance mutual understanding and communication. For example, when domestic enterprises are involved in increasing cost inputs, they should explain to the public what I am doing, why I want to do so, or how to do such a thing well, rather than understanding the business situation through the so-called third party approach. Feng Lin said. In addition, the integrity of e-commerce companies is very important, fraud is very popular in foreign countries, the loss of electricity providers do not matter, but to be truthfully described.

Lv Bowang, President of micro-blog consulting, believes that whether the new round of Internet Co's listing or listing in the United States has been postponed or cancelled, or whether the stocks are collectively underestimated and some companies suffer from "air strikes", all have proved that "the US mode of operation, the US venture capital and the rapid listing of Silicon Valley models have failed".

Therefore, choosing a suitable period for listing is very important for Jingdong and customers. After the listing, it is timely to adapt to the Listing Rules of foreign countries, actively open and accurate financial reporting, communicate with investors, do a solid job in marketing performance, or the rules that Chinese e-commerce websites need to follow.

　　 About the electricity supplier listing, the industry has finally shifted from the flashy and noisy to rational thinking.

"Recently, I heard the four words of electronic commerce are disgusting. I feel wrong." Yue Tao net (micro-blog) founder and CEO Bi Sheng (micro-blog) said. His pessimistic attitude also resonated with Jingdong CEO Liu Qiangdong (micro-blog), "every word is true." Bi Sheng even cried out emotionally. "E-commerce is a hoax for losing money." Bi Sheng's "electricity supplier scam" theory is nothing but lamentation: the bustling electricity supplier industry costs too much, but its profits are thin. It is a "hoax" that needs money to get help.

"I hope my colleagues will be calm and get everything back to the essence of business. The essence of business is to make money." Bi Shengru said. Jingdong mall CEO Liu Qiangdong encouraged colleagues on micro-blog: do things in the right place, do not be afraid!