Mcglaughlin Faces Huge Risk Of Delisting

2012 or China

The reshuffle of the industry's most competitive year may soon come up.

The opening of the first quarter of the year is not smooth for Mcglaughlin, known as China's B2C first stock, and is in a relatively difficult position in the "battle" of the electricity supplier.

Yesterday (May 16th) Mcglaughlin announced the first quarter of this year's financial situation shows that its first quarter operating income fell 22.8%, gross profit fell 18.4% compared to the same period, net loss of 4 million 200 thousand U. S. dollars.

It is observed that the opening of the first quarter of this year is not smooth for Mcglaughlin, known as the first B2C of China, and is in a relatively difficult position in the "battle" of the electricity supplier.

Yesterday (May 16th) Mcglaughlin announced the first quarter of this year's financial situation shows that its first quarter operating income fell 22.8%, gross profit fell 18.4% compared to the same period, net loss of 4 million 200 thousand U. S. dollars.

Perhaps in this group of data, Mcglaughlin's stock price fell below $1 yesterday. At the same time, because of the NASDAQ "one dollar delisting rule", Mcglaughlin had to face the risk of delisting after one and a half years.

In this regard, the industry's argument is that the two years of e-commerce industry's surface prosperity has covered the crisis behind them. Behind the fierce competition, it is "unhealthy" financial data.

And Mcglaughlin CEO Gu Bei Chun said, "looking ahead, we will continue to improve our customers in spite of the increasingly fierce market competition.

And operational efficiency, preserve strength, and ultimately create value for shareholders. "

First quarter loss

According to the fact that Mcglaughlin is in a loss, the industry's claim is that the surface prosperity of the e-commerce industry has covered the back of the two years.

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Enterprises often sacrifice profits at low prices to attract traffic and accelerate expansion.

Previously, the ultimate goal of the business logic of the e-commerce industry is to drag down its competitors, thereby improving the gross profit margin of the industry.

Behind this tragic competition is "unhealthy" financial data.

After the overall slowdown in the industry, the prosperity of the surface is difficult to continue. Before the big commercial enterprises, the overwhelming advertising and the promotional banquet after the scenes quietly disappeared.

"This year, the gross profit margin of e-commerce enterprises has generally declined, and many enterprises have begun to brake in time to reconsider how to raise gross margins."

Analysys International analyst Chen Shou told reporters that the business mode of the large number of burned businesses has been difficult to continue. How to reduce operating costs and ensure gross margin is the focus of all business enterprises today.

Mcglaughlin realized this problem from last year, and Mcglaughlin CEO Gu Bei Chun also said in an interview with reporters that this year, once the capital chain of the electricity supplier is tight, the advertising cost will be affected first, and then it will also affect the payment of supplier costs. "Once the capital chain is difficult to run, the electricity supplier enterprise will be very dangerous."

In the first quarter of this year, like most e-commerce companies, Mcglaughlin began cutting advertising costs.

Mcglaughlin's e-commerce business in the first quarter also began to slide.

Mcglaughlin's financial report shows that because of the reduction of Internet advertising by Mcglaughlin, the monthly average number of independent access users has decreased, resulting in a decline in net revenue of the network platform business.

Mcglaughlin's financial data also showed that the Q1 net income of its Internet sales business was 17 million 100 thousand US dollars, down 35.1% compared to the same period last year. The net income of call center was 11 million 100 thousand US dollars, down 3.7% compared to the same period last year. The offline store sales volume was 5 million US dollars, down 15% compared to the same period last year, and the number of storefronts dropped from 115 to 119 in the same period last year.

After the financial data began to slide, Mcglaughlin encountered the problem of tight funds.

Mcglaughlin lost a net loss of $4 million 200 thousand in the first quarter of this year, an increase of 7.6% over the same period last year. After the first quarter ended, the cash reserve was about $52 million 900 thousand, which was about $60 million 700 thousand in the first quarter.

On the one hand, we must start to reduce costs. Mcglaughlin's financial report shows that in the first quarter, the marketing cost and management cost have been reduced. The gross profit of 38.2% in the first quarter increased by 2.1% compared with the same period last year. But on the other hand, after Mcglaughlin cut costs, it directly affected its sales.

How to balance in two aspects has become a top priority for Mcglaughlin.

Another headache for Mcglaughlin is that Mcglaughlin's share price has fallen into the "one dollar zone" because of the decline in the financial data.

Prior to this, because of the United States local class action and the stock market was short, and so on, Mcglaughlin shares fell 90%, and finally lingered for more than half a year in the 1.1~1.5 US dollar range.

Its stock price failed to hold a dollar bottom line, and it fell below a dollar yesterday, closing at 0.92 US dollars.

according to

The delisting standard stipulates that tangible net assets should not be less than 2 million US dollars; the market value should not be less than US $35 million; net income should not be less than US $500 thousand in the last accounting year or the last three fiscal years; the public shareholding should not be less than 500 thousand shares; the market value of public shareholding should not be less than 1 million US dollars; the lowest price should be no less than one US dollar; the number of market makers should not be less than 2; and the number of shareholders should not be less than 300.

If the listed companies fail to meet these requirements, they will not be able to retain their listing qualifications.

The "one dollar delisting rule" points out that if the share price of a listed company is less than one dollar per share, and this state lasts for 30 trading days, the Nasdaq market will issue a pre warning warning. If a warning company fails to take corresponding measures to save itself in the 90 days of the warning, it will be declared to stop trading.

Insiders said that today's Mcglaughlin should consider how to boost performance as soon as possible.

However, it is not easy for Mcglaughlin's main e-commerce business to maintain a fast rising trend this year. On the one hand, the traditional profit model is difficult to sustain. On the other hand, it is a challenge from traditional enterprises under the line.

In addition, Mcglaughlin's offline business is also facing the problem of industrial growth and speed reduction.

"Where should China's B2C first share go?" Gu said. "In the past quarter, we raised our own brand.

Control standards, customer ratings for our products continue to improve.

In the future, we will further enhance the sense of fashion while maintaining the quality of our own brand.

And in improving the user experience of our official website, we launched a new network system to enable our customers to query their orders and delivery status at any time.

He added, "looking ahead, we will continue to improve customer satisfaction and operational efficiency, preserve strength and ultimately create value for shareholders, despite the increasingly fierce market competition."