Jin Gu Shares Refinancing Doubts

　　 A share listing 002488.SZ's ongoing non-public offering attracts quite a lot. list Companies, investment institutions, start-up companies and other groups of eyes.

Scheme for declaration of fixed shares

Its proposed non-public offering refinancing of 2 billion 700 million yuan, all invested in its wholly-owned subsidiary of TVL network technology (Hangzhou) Limited (hereinafter referred to as Trevor), the company's core business is the operation of the automotive aftermarket domain Internet Project "car Superman".

As a typical internet project, Trevor (car Superman) has been questioned about the existence of sales data brush and other Internet domain, but the capital market is not a secret question. It is also suspected of excessive financing by small shareholders to the regulators and complaints, but its significance is not limited to this.

In accordance with past practice, Jin Gu shares, which have responded to the SFC for two times, will soon be examined by the SFC. The adoption of this audit is considered to be more important. Business models are yet to be verified, and early Internet projects that require continuous burning money can evade the single timber bridge that only sought private placement in the first tier market in the past, but instead found a new shortcut to get huge financing from the two tier market.

Denied private placement financing

In June 24th, Jin Gu shares issued a latest Clarification Announcement. The announcement said that recently there were media reports that it was not true that the company's wholly-owned subsidiary, A, started the financing of the A round. "The company has never decided that it will not introduce any third party investment network before the issue of the non-public offering has been completed or has not yet been terminated."

Jin Gu shares is a company engaged in R & D, manufacture and sale of automobile steel wheels. Its main products are all kinds of steel wheels and other auto parts. The company was listed on the Shenzhen Stock Exchange in 2010. Its official disclosure in June 2015 will be a non-public offering, but since then suffered a stock market crash, in November of that year, the last non-public offering plan was terminated and a new distribution plan was launched. Although it is not easy to publish the public offering plan, the scale and direction of the investment in Jin Gu share capital are very clear, that is, the proposed fund-raising will not exceed 2 billion 700 million yuan, all of which will be used to invest in the "O2O platform construction project for the automotive aftermarket".

According to its non-public issuance declaration document, Trevor is exactly the main body of the "O2O platform construction project of the automotive aftermarket". The business of Trevor is through the official website and the external e-commerce platform to carry out tire sales and other electricity business.

However, some investment institutions directly pointed out that private equity investment institutions in many primary markets had already had close contact with Jin Gu shares and Trevor round, and had discussed private financing intentions in depth. "At the end of last year, tvally and its financial advisors met with us. The meeting was arranged by the financial advisor, Yi Kai capital, which was hired by us. We understand that we have seen several well-known investment institutions." A private equity investor said.

In fact, a written material prepared by the journalist, Yi Kai capital, was also confirmed by the reporter that he tried to carry out the A round of private financing.

The "top secret material", called the "Superman A wheel issue summary", clearly stated that "Yi Kai has hired the capital representative company to manage the financing." And the size of the intention to seek financing in the private market is also clearly referred to as: "the current plan raises $100 million to support further expansion of the company."

At least two private equity investors confirmed the authenticity of the materials to reporters. But the evidence does not indicate whether the private financing plan was completed before or after its non-public offering.

The reporter contacted Wu, vice president of Yi Kai capital, the contact person listed in the above materials, but Wu heard that when he asked about the car Superman project, he just answered a sentence that he had not heard and immediately hung up the phone.

But the private investment institutions also confirmed to reporters: "when interviewed with Trevor company, Sun Fengfeng, chairman and general manager of Jinggu shares and chairman of Victoria wheel, also personally participated in the negotiations. It is impossible for the listed company to be clear about this fact. "

As a matter of fact, the above financing materials also mentioned that the purpose of Trevor's search for private financing is: "through this increase in capital, the automobile Superman wishes to achieve the following demands: by introducing external investors, increasing mutual checks and balances among shareholders, reducing the management malpractice brought by single shareholders; through introducing independent third party shareholders, finding the market value of automobile Superman and ensuring its investment value to shareholders of listed companies; at present, the automobile rear market has broad space and the market share of each participant is dispersed. Through this financing, auto Superman also wants to introduce strategic investors to accelerate the occupation of the post market.

In response to the above situation, Luo Xiangfeng, a representative of securities affairs representative of Jinggu securities company in July 1st, admitted to reporters that the company did sign a consultancy agreement with Yi Kai capital in November last year, and contacted some private equity investment institutions at that time, taking into account the changes in market conditions that might lead to the failure of non-public offering.

A senior lawyer in the securities industry believes that Jinggu shares privately seek financing from other channels for direct investment projects, which does not directly violate the provisions of the securities and Futures Commission.

But a small shareholder of Jinggu shares questioned: "according to the feasibility report of the public declaration document on the Trevor project, it is said that the plan will invest 2 billion 700 million in the next 4 years. If we have raised 2 billion 700 million yuan to invest in the project, why should we raise another US $100 million? Does this mean that there is a problem in the feasibility of the feasibility scheme mentioned in the proposed investment plan? And if we want to find private financing when the non-public offering audit is not completed, then Jin Gu shares are suspected to be in violation of the regulations on the disclosure of information in the listed company, and we will not disclose the important information that will affect the company's core project ownership structure and other matters.

"Because no investment intentions have been reached with any investment institution, it has not reached the point where information disclosure is needed." Luo Xiangfeng said.

Car Superman suspected of being suspected of cleaning up

For the electricity supplier, O2O and other industries with "burning money", the brush list has always been a grey area that is not around. It has become a well-known rule inside and outside the industry, but it is not common in the A share market.

According to the economic observer, investors including minority shareholders of Jin Gu share have repeatedly complained to the SFC and reported that the operation data of Jin Gu share holding project are suspected of counterfeiting and refinancing, which are harmful to the interests of investors.

In accordance with the SFC's standards for refinancing audit of listed companies, the feasibility of raising capital investment projects and the authenticity and integrity of declared materials are often the "red line" of audit. After receiving the declaration materials of Jin Gu share, the SFC gave feedback on the refinancing application in two times in January 28th and April 12th. It can be seen that the feasibility of the project is the focus of the SFC.

And reporters search related public information, but also found that there are many online querying Trevor wheel (auto Superman) spanaction brush list and questioned. There are many indications that Jin Gu shares also have some evasions in the feasibility statement of the recruitment and investment projects in the official documents of non-public offering.

In response to the SFC's first feedback on the competition pattern and the market position of the company, Jin Gu shares said in its reply: "the post market Internet is in the initial stage of development. At present, no authoritative statistical channel has yet been formed. The sales statistics of Tmall can reflect the status of the industry. From Tmall's "store industry ranking", in June 2015, the company's "flagway flagship store" has leapt to the first place in the industry.

However, the small shareholders mentioned above said that the data quoted by Jin Gu share were fraudulent. The data used to verify the actual operational capacity of the investment projects raised by the investment funds remain questionable.

"In the sales records of Jingdong's stock exchange and Tmall store in June 2015, there were frequent purchases of customers with similar user names and obvious rules. The whistleblower said.

There have been public reports on the Internet: in the sales information of Dunlop tire SP T1 205/55R16 91H tire sold in Tmall store in June 25, 2015, t**2, t**4, t**5, t**7, Shun, **1, Shun **8 and other users have purchased many times. On the Jingdong platform, there appeared similar situations. In June 10, 2015, for example, there were many users who had similar user names and regular patterns in the sales evaluation data of the brand name tire and CC5 tire, and the user names were abbreviated to users of "12,", and all of them were purchased at around 20:18, and at the same time, they were evaluated at around 20:18 in June 19th. But because Tmall's sales information has been folded, the reporter has not been able to confirm such information.

"Such coincidences inevitably cause people to question the signs of artificial manipulation behind the Internet industry, and the practice of Internet scrub is relatively common. This practice is not uncommon." The operator of an Internet business platform in Beijing is honest.

Luo Xiangfeng said, because Trevor is an independent operation subsidiary, it is not known whether there is a brush list. However, the abnormal user purchase situation mentioned above does not exclude the small B end users who did some marketing activities at that time.

The small shareholders also questioned that the financial data disclosed from Jin Gu shares showed that there was a contradiction between the operation data and the open information disclosed by the company.

Jin Gu shares annual report 2015 showed that the car Superman project tire and accessories business income of 371 million yuan, in 2015 semi annual report shows that the business income of 118 million yuan, 2015 three quarterly report shows that the operating income of 1.52 yuan, based on which we can roughly calculate the automobile Superman fourth quarter operating income of 101 million yuan (auto Superman project annual business income - the first half of business revenue - third quarter operating income).

The third party monitoring platform "know one's own knowledge", through the sum up of the daily sales records of shops, concluded that the incomplete sales statistics of Tmall supercars and Taobao stores in the fourth quarter were 117 million yuan, and the total sales volume of automobile Superman projects in the four quarter over the financial statements projections was 101 million yuan, and there were obvious conflicts between the two. In the 2015 annual report of Jinggu shares, the data of the auto Superman project clearly stated that the third party platform shops (including Tmall stores, Taobao stores, Jingdong stores, etc.) and its own APP and website sales volume.

However, according to Luo Xiangfeng's statement, this is a statistical difference. He said that since the data in the semi annual report of 2015 had not completely differentiated the data of the auto Superman project and the traditional project, the operating income of the supercar project in the semi annual report of 2015 should be lower than the above 118 million yuan. According to the declaration document submitted by the company to the Securities and Futures Commission, in 2015 1-9, the company's post market e-commerce business income was 228 million yuan. Accordingly, the fourth quarter operating income of the auto Superman was calculated to be 143 million yuan.

A new shortcut to "burn money" project financing?

In fact, as a representative case of traditional industries listed in the "Internet +" case, the controversy and concern around the Jinggu shares and its investment and investment projects are not just related to their own concerns. What is more concerned about the outside world is whether the smooth operation of its refinancing will determine whether a large number of early Internet projects similar to supercars can find a new shortcut for financing from the two tier market.

In the view of a senior investment manager of a venture capital institution in Beijing, the auto Superman project is a typical early Internet project. Its short-term profitability is very poor. The business model is yet to be verified, and it needs to face the pressure of long-term "burning money".

The first announcement of Jin Gu shares last year when it issued a non-public offering, portrayed a huge automobile aftermarket to provide a broad market prospect for the post market O2O. In fact, similar to many Internet projects, the auto aftermarket O2O has already entered the "burn money" war. At present, the actual operation in this field has become very cruel.

Public data show that from the beginning of 2014 to the first half of 2015, the O2O project of domestic automobile aftermarket was wildly pursued by capital. In 2014, there were more than 150 investment events related to the auto industry in the capital market. The investment in the automotive aftermarket was 10 times that of 2013, reaching 67 times. In 2014, there were more than 100 start-ups in the automotive aftermarket. In 2015, at least more than 40 car aftermarket O2O projects sprung up.

However, the good times are not long. In the second half of 2015, there has been a wave of project closure in the field of automobile aftermarket. According to incomplete statistics, since September 2015, there has been a series of closures, including car washing, e washing, light rain washing, ticking, car washing, car 8, car washing and other car washing platforms. At the same time, the 22 cars that had been covered by 22 cities, once known as the largest O2O vehicle maintenance platform in China, officially declared bankruptcy in April 5th.

Another company as a representative enterprise of the B2B mode of "Internet + auto aftermarket", Zhuge repaired the car network, and once entered the new third board last year, with the aura of "the first market of automobile aftermarket". But not long ago, the 2015 annual report released by Zhuge repair net showed that the company's revenue in 2015 was 95 million 769 thousand and 800 yuan, and its losses amounted to more than 6.4 billion yuan. In April 21st, its original securities were changed to "ST Zhuge" as a result of insolvency.

Zhuge, chairman of the repair network, Qi Qing also said publicly that it is clear that Internet Co listing in China will encounter such problems. In the early days of Internet companies, it is necessary to invest more in horse racing.

Against this background, the huge risk of early Internet attribute projects is obvious. The declaration document of Jin Gu shares also clearly recognized this feature. It said in the document: "the benefit forecast of this project is in line with the development rule of Internet enterprises, which is different from traditional industries, and Internet enterprises have the characteristics of nonlinear growth. Internet companies often need large amounts of capital investment in the initial stage of development. In the initial stage, earnings performance is unstable or even in a state of loss. After reaching a certain scale, Internet companies can usher in a profit explosion point. After continuous capital investment, with the accumulation of certain industries, Internet companies with competitive advantages can stand out and enter the period of rapid development, and the profit index has greatly improved, occupying a large market share. In order to prove the feasibility of such projects, Jin Gu shares even cited Alibaba [Stock review] and Jingdong as evidence.

Are these risks huge and need to invest a lot of money continuously? Is the early Internet project that is yet to be verified in business mode really suitable for financing in the two tier market?

Luo Xiangfeng responded: "since 2013, the company has started the operation of the Trevor project, and now it has a certain income, so it is not a category of early projects. And the company has a strong team, and the competitive strength is guaranteed.

However, the financial pressure faced by Trevor is very obvious. In 2015, the net asset liability ratio of TVL has reached 300%, and its prospect is directly related to the capital chain.

In recent years, the SFC has clearly tightened the regulatory framework for the new regulatory arbitrage activities such as cross-border mergers and acquisitions and "flicker" restructuring, which are frequently seen in the two tier market. However, compared with non-public offering stocks, listed companies have raised large sums of money through non-public offering refinancing and invested in early Internet start-ups. This pattern has not been common before, and regulators have not yet had a clear attitude.

Therefore, the success or failure of the application of the non-public offering will have a clear demonstration significance.

Success means Internet Early projects can draw lessons from the same pattern, such as Didi, the United States and other Internet projects. At the early stage of their creation, they could cooperate closely with the listed companies and obtain huge amounts of money from the two tier market through non-public offering refinancing, thus avoiding the difficulty of seeking private equity financing in the primary market. But with it, the huge risks and successes of early Internet projects were spanferred to investors in the two tier market.