reporter | Li Zhanghong
editor | Zeng Fubin
Three years after the "accident" of LeTV , Baofeng Group , known as "Little LeTV", still followed in the footsteps. Unlike LeTV, Jia Yueting is overseas, and Feng Xin, the actual controller of Baofeng Group, has been arrested.
In July this year, Storm Group suddenly issued an announcement saying that Feng Xin was arrested. This incident became a landmark event in the decline of of Storm Group.
In the following four months, Storm Group moved out of the office space it had rented for many years, all senior executives resigned, the accounting firm resigned, and the main business stagnated, gradually moving from normal operations to complete collapse. And all this has only been more than four years since Baofeng Group was completed and launched. What happened in the middle?
A new product launch conference was held six months ago, but now there are only more than 10 employees left.
html On the evening of December 2, Baofeng Group announced that there are currently only more than 10 employees left in the company, and due to tight financial conditions, the company is in arrears with the wages of some employees.Previously on July 28, Storm Group suddenly announced that the company’s actual controller Feng Xin was taken compulsory measures by the public security organs. Afterwards, Feng Xin was officially arrested by the Shanghai Jing'an District Procuratorate on suspicion of bribery of non-state personnel and job embezzlement. Before the arrest of
, Feng Xin held the three positions of chairman, general manager and secretary of the board of directors. Although Storm Group has stated that since Feng Xin was taken compulsory measures, matters that need to be decided by Feng Xin have been forwarded to Feng Xin for decision-making by the defender. After Feng Xin was approved for arrest, the way he made decisions and performed his duties was different. Affected. But Feng Xin’s arrest did become an important factor in the rapid collapse of Storm Group .
One month after Feng Xin was arrested, Baofeng Group moved its office into an old five-story office building located on the North Third Ring Road in Beijing. There are many small companies in this office building, and Baofeng Group occupies one floor. Prior to this, Baofeng Group had been working on the 13th and 10th floors of the Shoxiang Technology Building, also located on the North Third Ring Road.
The property owner of Shouxiang Technology Building told Jiemian News that the single-floor area of the building is about 2,000 square meters, and the rent is quoted at 10 yuan per square meter per day. The companies settled in the building are relatively large. According to simple calculations based on the data provided by the property management company, the annual rent of the original office space of Storm Group may be more than 10 million. Such an amount is no longer affordable for Storm Group . Recently, Baofeng Group announced that the company’s new office space rent will be paid until the end of February 2020. If the rent cannot be paid in time, it will face the risk of no office space.
At the end of October, three months after Feng Xin was arrested, Baofeng Group disclosed on the same day that due to personal reasons, the company’s deputy general manager Zhang Pengyu, chief financial officer Zhang Lina, and securities affairs representative Yu Zhaohui applied to resign from the company. At this point, except for Feng Xin, there are no senior executives of Baofeng Group . All senior executives of
have not yet been appointed. As the cooperative audit agency of Storm Group, Dahua Accounting Firm also decided to "resign" at the end of November on the grounds that "the audit business of the 2019 annual report is heavy". This means that the 2019 annual report of Storm Group will not be audited and faces the risk of not being disclosed on time. According to the listing rules of the Shenzhen Stock Exchange, if the company still fails to disclose its annual report three months after the statutory disclosure period, the company's shares may be terminated from listing.
The original main business of Baofeng Group included Baofeng TV and Baofeng Video. After divesting Baofeng TV, which suffered serious losses, in July, the main business of Baofeng Group is now only Baofeng Video. Baofeng Video was born in 2003. It is the software on which Baofeng Group made its fortune.
In June this year, Baofeng Group also held a new product launch conference to launch Baofeng Video's 16th anniversary special edition product - Baofeng 16. At the press conference, Baofeng Group shouted the slogan "16th anniversary, we are still young when we return". What is disappointing is that less than half a year after the press conference, Baofeng Video was found to have abnormal data on the mobile and PC terminals and could not be used normally.
On November 27, Baofeng Group disclosed that because the company defaulted on the computer room server hosting fee, the partner had terminated the provision of services, resulting in the company's website and mobile client not being able to provide services normally. "The company is actively negotiating with other partners. Recently, the company's main business has come to a standstill, its business development has been severely restricted, and it faces the risk of no source of business income." Storm Group said. The financial report of
shows that in the first three quarters of 2019, Storm Group achieved operating income of 93.6005 million yuan, a year-on-year decrease of 90.95%; the net profit attributable to shareholders of listed companies was -650 million yuan, a year-on-year decrease of 184.50%.
As of the end of the third quarter, the total assets of Storm Group further declined to 360 million yuan, a decrease of 71.05% from the end of the previous year. At the same time, the net assets of Storm Group further decreased to -633 million yuan. According to relevant regulations, if the net assets of Storm Group are negative throughout the year, its shares will be suspended from listing.
Hundred-yuan star stocks: 600 million total assets supporting a market value of nearly 40 billion
For a long time, Storm Group 's plan was to go public in the United States. As early as 2006, the predecessor of Baofeng Group successively introduced IDG and Matrix Partners and established a VIE structure. Although Feng Xin still publicly declared that he wanted to be listed on Nasdaq in 2011, data shows that since at least 2010, Storm Group has been dismantling VIE. After
was declared in 2012, and of Baofeng Group, which had been waiting for three years, finally successfully landed on the GEM in March 2015. In the three years before listing, Baofeng Group achieved operating income of 252 million yuan, 325 million yuan, and 386 million yuan respectively. The growth was relatively stable, but its annual net profit declined, reaching 55.8473 million yuan, 38.5375 million yuan, and 41.8549 million yuan respectively. Yuan.
Baofeng Group’s IPO finally raised 214 million yuan at an issue price of 7.14 yuan per share. After the funds raised were received, the total assets of Storm Group climbed from 400 million yuan before listing to 609 million yuan.
The first half of 2015 was during the A-share bull market. The blessing of the "Internet" label made Storm Group unprecedentedly popular. Since its listing on March 24, 2015, Baofeng Group has continuously achieved 29 one-word daily limit, and its stock price has exceeded 140 yuan per share, becoming the new A-share "high limit king". Since then, the share price of Storm Group has continued to rise, and finally reached a high point on May 21, 2015 - 327.01 yuan per share, an increase of more than 44 times compared to the issue price, a price-to-earnings ratio of more than 1,000 times, and a corresponding total market value of 39.241 billion. Yuan.
Oriental Fortune Choice data shows that Storm Group ’s total assets of 600 million yuan at that time ranked outside the 2,600th place in the A-share market, but its market value of nearly 40 billion could squeeze into the top 300 of all A-shares. In an interview with the media at the end of April that year, Feng Xin said: "The pursuit of A-shares is a powerful lever for the development of Baofeng. In the future, Baofeng will become one of the 10 billion U.S. dollar companies."
went public and expanded wildly. In early May 2015, shortly after
was denied financing, Storm Group released the most ambitious strategy in its company history - Global DT Entertainment. In Feng Xin’s plan, DT Entertainment includes four new business centers: Baofeng Magic Mirror (VR), Baofeng Sports, Baofeng Pictures, and Baofeng TV, which will be deployed not only in China but also internationally. For this reason, Baofeng Group changed its name from " Baofeng Technology " to "Baofeng Technology Group".
In the following months, Baofeng Group made frequent moves, launching Baofeng Magic Mirror and Baofeng Super Body TV, launching Baofeng Show, establishing DT Big Data Center, teaming up with Ocean Music to build a traffic federation, and teaming up with Tianxiang Interactive to create a mobile game distribution platform , as well as incubating Baofeng Cloud Video, Baofeng Gas Station, Baofeng Private Shadow, Yunduo TV Assistant, Baofeng Culture and other projects.
In that year's annual report, Baofeng Group stated that it had "completed the basic outline of the global DT entertainment strategy in the three lines of content, service, and business, and the layout was 60% complete."
In March 2016, Baofeng Group disclosed its first merger and acquisition plan after listing. The company planned to purchase Gamp Technology with transaction considerations of 1.05 billion, 1.08 billion, and 975 million yuan respectively by issuing shares and paying cash. 100% equity, 60% equity of Straw Bear Pictures and 100% equity of Lidong Technology, with a total transaction price of 3.105 billion yuan.
Ganpu Technology and Lidong Technology are game companies, while Straw Bear Pictures was established by natural persons Liu Xiaofeng , actor Liu Shishi, and actor Zhao Liying. The above three target companies have a short operating history, but the amounts of profit forecasts have increased significantly, and their valuations have increased dozens of times. Three months later, the merger plan of Baofeng Group was rejected by the China Securities Regulatory Commission’s M&A Committee on the grounds that “the target company’s profitability is highly uncertain.” After the merger plan of
was rejected, Storm Group still stated that it would continue to promote the "global DT entertainment" strategy. Two months later, Baofeng Group came up with a new plan - planning to raise an additional 2 billion yuan for Internet entertainment comprehensive platform projects, DT platform infrastructure projects and supplementary working capital.
Feng Xin believes that the listing of Storm Group is to obtain nuclear weapons. However, except for the 160 million yuan raised by the IPO, Storm Group has not received a penny of financing from the capital market since its listing. And the money-burning business continues.
As early as 2015, Baofeng Group had taken Baofeng Magic Mirror, which had suffered serious losses, off the balance sheet. Baofeng TV, which remained on the balance sheet, had a net loss of 358 million yuan in 2016. In 2017, Storm Group began to feel financial pressure. In an interview with the Beijing News in September 2017, Feng Xin admitted that he was “a bit inflated” after going public, and said, “Now Baofeng’s capabilities can only do audio-visual, TV, and VR. If there is content, it will be there, and if it is not available, it will be fine.” ”.
financial data shows that from 2015 to 2017, Storm Group had a net cash outflow of 580 million yuan from operating activities, and a net cash outflow of 853 million yuan from investment activities. In other words, if Storm Group wants to maintain business expansion, it needs to rely on a large amount of financing. After completing its listing in the first quarter of 2015, the asset-liability ratio of Storm Group was only 25%. By the end of the third quarter of 2017, this figure had exceeded 70%.
At the beginning of 2018, Storm Group proposed “All for TV” and disclosed that in the future, the TV business will be fully injected into listed companies. However, the funding problem of Storm Group has not been resolved. In May 2018, Storm Group withdrew its original 2 billion yuan private placement plan and disclosed a new plan to raise 50 million yuan. This plan was once ridiculed as a "mini fixed increase", and directly caused Storm Group to hit the limit when it resumed trading.
Throughout 2018, Storm Group struggled to improve. Coupled with the impairment of various assets, the annual net loss exceeded 1 billion yuan. Feng Xin's equity was frozen, and the listed company became the person subject to execution several times.
In July 2018, the Baofeng Group WeChat public account released a conversation record of nearly 10,000 words - "Three-Year Examination, Storm in the Storm - Feng Xin's Internal Two-hour Long Talk". Feng Xin believes in the article that there are three main reasons why Storm Group encountered financial difficulties. First, it is lack of experience, and the listed company does not have any financing and mergers and acquisitions; second, it is not enough understanding of the attributes of money and treats bond financing as equity financing. Use; third, the mentality is inflated and the business layout is greedy.
sought gambling financing, and many institutions were "trapped" for more than 6 billion
As Feng Xin said, although no money was obtained from the capital market, in the process of business expansion, Storm Group , with its background as a listed company, and many Cooperation with several institutions has resulted in billions of dollars in funding. Most of these funds with cover clauses eventually backfired on Storm Group and Feng Xin himself. According to
data, Baofeng Magic Mirror received US$10 million in Series A financing from Songhe Capital, Huayi Brothers , and Tianyin Holdings after its listing in 2015. In 2016, Baofeng Magic Mirror received another RMB 230 million in Series B financing led by CITIC Capital. In addition, in December 2017, Baofeng Group announced that the parent company of Baofeng TV had received an investment of 800 million yuan from the listed company Dongshan Precision and Jiangsu Rudong County.
In addition to introducing strategic investors to its subsidiaries, Baofeng Group also uses the "listed company + PE" model to set up industrial M&A funds to leverage capital.
In December 2015, Baofeng Group , with its holding subsidiary Baofeng Venture Capital as its GP, established Baofeng Yunfan with a total investment of 500 million yuan, together with Shanghai Gopher Asset Management Co., Ltd. (hereinafter referred to as Shanghai Gopher) and Pinglu Electronics. Fund, participating in Baofeng VR, Baofeng TV, etc. In this fund, Shanghai Gopher invested 400 million yuan as an LP. The establishment of
Baofeng Yunfan Fund stipulates that when the accumulated distribution amount of Shanghai Gopher is lower than the sum of its investment principal and fixed income, Baofeng Group will repurchase the fund shares corresponding to Shanghai Gopher's investment. Feng Xin, the controlling shareholder and actual controller of of Storm Group, bears joint and several liability for the repurchase obligation.
At the end of May 2019, Shanghai Gopher initiated arbitration because Baofeng Group failed to pay the transfer price, liquidated damages and other expenses as stipulated in the contract. In November, the arbitral tribunal of the Beijing Arbitration Commission ruled that Baofeng Group paid a transfer price of 462 million yuan to Shanghai Gopher, and Feng Xin bore joint liability. Among the external financing of
Storm Group , the most watched case is the MPS project, which is known as a "financial tragedy". MPS refers to British sports rights company MPSilva Holdings S.A.
In February 2016, Baofeng Investment, a wholly-owned subsidiary of Baofeng Group , and Everbright Jinhui Investment Management (Shanghai) Co., Ltd. (hereinafter referred to as Everbright Jinhui) initiated the establishment of an industrial M&A fund with a scale of 5.203 billion yuan—— Shanghai Jinxin. Everbright Capital is a subsidiary of Everbright Capital. The latter is a wholly-owned subsidiary of Everbright Securities and is mainly engaged in private equity investment fund business.
Shanghai Jinxin’s main goal is to acquire 65% of the equity of MPS Company. MPS was valued at US$1.4 billion at the time and was mainly engaged in media broadcast rights management. It owned the global or partial broadcast rights of famous sports events such as Serie A, Premier League, America's Cup, and NFL.
However, after Shanghai Jinxin took over at a price of up to 4.7 billion yuan, MPS Company successively lost ground in the copyright market and was defeated by its competitors. In addition, Andrea Radrizzani, the founder of MPS, established Eleven Sports as early as 2015 to engage in event broadcasting, forming a competition with MPS. On October 17, 2018, the British High Court ruled that MPS was bankrupt and liquidated due to its inability to pay copyright fees. The acquisition project of
is a mess. On the other hand, Shanghai Jinxin is about to expire on February 25, 2019. Among Shanghai Jinxin’s investment of RMB 5.2 billion, priority limited partners invested RMB 3.2 billion, intermediate limited partners invested RMB 1 billion, and junior limited partners invested RMB 1 billion. Information shows that China Merchants Fund Management Co., Ltd., a subsidiary of China Merchants Bank, subscribed for a share of 2.8 billion yuan as a priority partner.
The way Shanghai Jinxin investors exited was Storm Group finally completed the acquisition of MPS. MPS is bankrupt, Storm Group is crumbling, and acquisition is already an impossible task. After
, China Merchants Bank filed a lawsuit against Everbright Capital. On the other hand, Everbright Jinhui and Shanghai Jinxin also filed an "equity transfer dispute" lawsuit against Baofeng Group and Feng Xin on the grounds that Baofeng Group and Feng Xin failed to perform the above-mentioned repurchase agreement, demanding that Baofeng Group Group and Feng Xin bear the liability for loss compensation.
Feng Xin was arrested, "Little LeTV" fell
According to media reports, Feng Xin engaged in bribery during the financing process of the MPS project. According to the Shanghai Jing'an District Procuratorate, Feng Xin was arrested on suspicion of "bribery of non-state personnel" and "job embezzlement." Subsequently, Storm Group experienced earth-shaking changes within four months.
Baofeng TV is the most important asset nurtured by Baofeng Group in its expansion. But in July this year, Baofeng Group had delisted Baofeng TV on the grounds of losing control.
Unlike Baofeng Video, the official website of Baofeng TV, which is outside the listed company system, can still be opened normally. On December 4, a Jiemian News reporter called Baofeng TV’s national customer service hotline. An operator who claimed to be a third-party call center customer service operator said that Baofeng TV had ceased production, sales, and operations, and the company “no longer exists.”
Storm Group 's stocks are still trading normally. At the close of trading on December 4, Storm Group reported 3.22 yuan per share, a drop of more than 97% from its historical high, corresponding to a total market value of only 1.061 billion yuan. As of September 30, the number of shareholders of Baofeng Group was 63,500.
Judging from the current situation, it may be inevitable that and of Storm Group will be delisted in the future.
