Author | Ren Qing
Source | WhatTheFintech
On April 27th, Lakala will usher in the first wave of large-scale lifting of the ban after listing. A total of 153 million shares of investors including Lei Jun will be lifted, with a lifting rate of 38.27%.
The lifting of the embargo is approaching. “Pay the first share” Lacara showed a wave of “Sao operation” in April, from huge dividends, to the re-acquisition of risk assets that were previously stripped off for a smooth IPO. On stage.
Subsequently, the Shenzhen Stock Exchange issued a concern letter requesting it to indicate whether there was a regulatory arbitrage in the acquisition and whether it would harm the interests of listed companies. On April 14, Lakala responded that the company's acquisition of related financial technology companies is a strategic development need. The acquisition is a net asset purchase, and the price is fairly fair, which has not harmed the company's interests.
The motivation behind this series of operations by Lacara is thought-provoking.
Three shocks to IPO, divestiture of value-added financial services
Public information shows that Lakala was established in 2005 and was one of the first batch of national full-category payment license companies issued by the Central Bank. After 14 years of shareholding change, the total number of Lakala shareholders is more than 40, including multiple corporate legal and natural person shareholders. Lenovo Holdings and Xiaomi Technology CEO Lei Jun are Lakala investors.
In February 2016, Lakala intends to use the Tibet tourism restructuring curve to land on the A-share market, but this move was questioned by the Shanghai Stock Exchange, especially the "design" that closely follows the "original asset 100% red line" to avoid backdoors, but Lakala has been attracting attention. Claimed not to be a backdoor listing. Then the plan "abortion".
Less than four months after the failure of the reorganization, Lakala Group announced the formal restructuring into a holding group, and the group structure was split into two groups: Lakala Payment and Koala Financial Services.
In the fourth quarter of 2016, Lakala Pay divested 10 holding and share-holding subsidiaries including Beijing Lakla Small Loan (Shenzhen Zhongying) and Guangzhou Lakla Small Loan (Guangzhou Zhongying), which are mainly engaged in value-added financial services. Changed to bank card acceptance, Internet payment, digital TV payment, prepaid card acceptance, mobile phone payment.
After the spin-off, Lakala ’s original small loan, factoring, and wealth management services were packaged into the newly established Koala Financial Services Group, while the payment group retained payment, credit reporting, and securities businesses. In this way, the payment group will become a relatively pure and relatively stable third-party payment company, and the chance of IPO success will increase significantly.
In March 2019, Lacara hit the A shares for the third time, and the listing was successful, becoming the "first share to pay". According to its prospectus, in terms of shareholding structure, Lenovo Holdings holds 31.38% of the company ’s shares and is the company ’s largest shareholder. In addition, Sun Taoran and Sun Haoran hold 13.07%, Dazi Heming Yongchuang Investment holds 5.58%, Kunlun. Xinzheng and other 19 institutions hold a total of 32.02% of the shares.
The gap between survival is in urgent need of new profit growth points
In the 14 years from 2005 to the present, Lacarra has been engaged in third-party payment and other related businesses. After 2013, with the rise of three-party payment, Alipay, WeChat payment and other mobile payments quickly occupied the market, with fierce competition in the market and shrinking profit space. Under the background of the world, Lacara gradually reduced to the "accompanying role" of Alipay and Tenpay, and survived.
Among the more than 200 third-party payment institutions in the country, Alipay and WeChat Pay accounted for more than 90% of the personal payment business. According to the Foresight Industry Research Institute's "China Mobile Payment Industry Market Outlook and Investment Strategic Planning Analysis Report", as of the fourth quarter of 2019, Alipay's market share has maintained a leading position in mobile payment, reaching 55.10%, with Tencent ranked second. Tenpay (including WeChat Pay) is currently 38.9%, and the two giants account for more than 94% of the market.
Some insiders once told Caijing.com that from the perspective of the entire payment market, Alipay and WeChat have obvious advantages in 2C business. Although other small and medium-sized payment institutions still have room to survive, listed companies like Lakala must find Only new business growth points can convince the market.
The data shows that the revenue share of Lakala's personal payment business has decreased from 5.16% in 2016 to 1.9% in 2018. Correspondingly, the proportion of 2B enterprises' revenue from acquiring business has risen from 49.58% in 2016 to 89.29% in 2018, becoming the core pillar industry of Lakala. According to the analysis of Guosheng Securities, Lacara has actually turned to operating small B-end value-added services, mainly including merchant loan assistance, advertising marketing, membership services and point purchases.
From the initial convenience payment terminal, to the bank card acquiring business, and then to the 2B enterprise acquiring business, although Lakala has been frequently changing the track in the third-party payment subdivision. With the accumulation of offline merchants and the rapid promotion of sales, Lakala got a share in the fierce payment market.
According to the unaudited 2019 annual report released by Lacara on the evening of April 9, Lacara achieved operating income of 4.899 billion yuan in 2019, a year-on-year decline of 13.73%.
Lakara ’s core payment business also declined significantly, with revenue from payment business accounting for 88.71%, reaching 4.35 billion yuan, a year-on-year decrease of 16.74%. In 2018, this business accounted for 91.92% of the total operating income. In comparison, the business operations (financial technology, e-commerce technology, and information technology) of merchants generated revenue of 440 million yuan in 2019, an increase of 119.59% year-on-year, accounting for less than 10% of total operating income.
In 2019, the gross profit margin of Lakala's payment business and merchant operations also declined. Among them, the gross profit margin of payment business was 41.71%, a decrease of 0.86% over the same period; the gross profit margin of merchants operating business was 70.5%, a decrease of 26.02% over the same period.
Lacara desperately needs a mature business other than payment to boost performance, and the Guangzhou Zhongying and Shenzhen Zhongying that were previously stripped off are closely related to it, so they have the "false divorce recombination" play.
"Fake divorce" and huge dividends cause controversy
At the same time as Lakala ’s annual report was released, it also released two acquisition plans involving a total of more than 2.1 billion yuan, and a high dividend plan, which aroused the attention of regulators and investors.
Lakala disclosed: plans to acquire a 100% stake in Guangzhou Zhongying Weirong Intelligent Technology Co., Ltd. held by related party Tibet Koala Jinke for 1.09 billion yuan, and acquire related party Tibet Koala Technology, Sun Taoran, United Investment for 207 million yuan 100% equity interest in Shenzhen Zhongying Weirong Technology Co., Ltd. held by Tibet Nasun, a non-related party of Qihuihe Company, is held in total. 2.116 billion yuan.
It is understood that the total capital of the two acquisitions in this transaction is about 2.116 billion yuan, which is nearly 700 million yuan higher than the 1.444 billion yuan consideration at the time of divestiture.
Guangzhou Zhongying and Shenzhen Zhongying were two of the 10 value-added financial business companies that Lakala spun off in 2016. Subsequently, the Shenzhen Stock Exchange issued a concern letter requesting it to indicate whether there was a regulatory arbitrage in the acquisition and whether it would harm the interests of listed companies.
For the company's acquisition of its own company that has been divested, Lacara responded that when the value-added financial business was stripped off in the second half of 2016, the company's merchant scale increased and it was in the golden window of development. Business is conducive to improving operational efficiency and reducing risks.
According to Lenovo Holdings' 2019 financial report, Koala Technology's net profits for 2017-2019 were 457 million, 453 million, and 227 million, respectively. Koala Technology's Guangzhou Zhongying and Shenzhen Zhongying achieved net profit of 9.7 million and 179 million respectively in 2019, with a total profit of 276 million.
If you exclude the contributions of Guangzhou Zhongying and Shenzhen Zhongying in 2019, it means that other companies under Koala Financial Services are basically at a loss. This also means that the above two companies are actually the main source of profit for Koala Technology and the core asset of Koala Technology.
Acquiring 2.1 billion yuan to acquire core assets of Koala Financial Services in the thunderstorm of the mutual gold industry, Lakala said: This will "help the listed companies enhance their core competitiveness and will produce good synergies."
Some investors expressed dissatisfaction with the acquisition on social platforms, calling it a public robbery of secondary investors.
From the perspective of the profitability of the two companies to be acquired, Guangzhou Zhongying's revenue and net profit in 2019 are declining year-on-year. From 2016 to 2019, the company's operating income was 120 million yuan, 850 million yuan, and 870 million yuan respectively , RMB 820 million, and net profit of RMB 16.57 million, RMB 151 million, RMB 179 million, and RMB 96.79 million respectively.
On the surface, Shenzhen Zhongying ’s profitability is slightly better. From 2016 to 2019, the company ’s operating income was 40.43 million yuan, 102 million yuan, 175 million yuan, and 292 million yuan, and net profit was 23.38 million yuan and 3988 yuan, respectively. 10,000 yuan, 76.25 million yuan and 179 million yuan.
However, Shenzhen Zhongying mainly provides services for related parties such as Guangzhou Lakala Small Loan. In 2018 and 2019, the revenue from related parties such as Guangzhou Lakla Small Loan accounted for 85.8% and 62.17%, respectively. In addition, in 2019, the top five customers of Shenzhen Zhongying, apart from Huizhi Insurance Brokers Co., Ltd. and Guangdong Yinda Finance Guaranteed Investment, the others are related parties of Lenovo Holdings and Lakala.
The shareholding structure also shows that among the shareholders of “Guangzhou Zhongying” and “Shenzhen Zhongying”, the largest shareholder of Lakala, Legend Holdings and the founder of Lakala ’s second largest shareholder, Sun Taoran, held 51% and 33% of the subject matter Shares.
If the transaction is successfully completed, there is no doubt that Lenovo Holdings and Sun Taoran will become the biggest winners. According to the transaction consideration conversion, related party Legend Holdings and founder Sun Taoran will cash out 1.079 billion yuan and 698 million yuan from this transaction, respectively.
And Lakala, which has successfully gone public after three difficult impacts, has only raised 1.2 billion.
In Lakala's 2019 financial report, there is also a generous "huge amount" of dividends worth noting.
Throughout 2019, Lakala ’s net profit attributable to shareholders was 806 million yuan, but management announced a cash dividend of 20 yuan for every 10 shares and a dividend plan for every 10 shares. Based on the total capital of 400 million shares of Lakala, the total dividend will reach 800 million yuan, accounting for 99.26% of the net profit for the year, and even deducting non-net profit of 793 million yuan.
At present, the largest shareholder of Lakala is Lenovo Holdings, with a shareholding ratio of 28.24%; founder Sun Taoran and concerted action are the second largest shareholder with a shareholding ratio of 11.76%.
With this huge dividend of 800 million yuan, Lenovo Holdings can obtain pre-tax income of nearly 226 million yuan. Sun Taoran and parties acting in concert can obtain more than 94 million pre-tax income. Undoubtedly, these Lakala IPO initial shareholders and Its early investors were the biggest beneficiaries of this dividend.
According to the financial report of Lakala, as of the end of 2019, Lakala had a total of 8.815 billion yuan in current assets, including 8.172 billion yuan in monetary assets and 6.251 billion yuan in current liabilities, but the acquisition of the previous two own companies, plus 800 million yuan The huge dividends will consume Lakara ’s 2.916 billion yuan in total.
