Inke , which has just been established for more than 3 years, is listed in Hong Kong today (July 12, 2018), becoming the first entertainment live streaming stock in the Hong Kong capital market.
In 2017, Yingke's revenue was RMB 3.9 billion and its profit was RMB 791 million.
The issue price of Inke is HK$3.85 per share, closing at RMB 4.26 per share, with a market value of approximately HK$8.586 billion (approximately RMB 7.29 billion). The intraday increase was as high as more than 40%, with a maximum market value of HK$10.7 billion.
Yingke's main operating entity is Beijing Milywood Network Technology Co., Ltd., which was established in March 2015, and the Yingke App was officially launched in May 2015.
Yingke's information says that it has now won more than 200 million registered users, setting a precedent for national live broadcasts and triggering the popularity of live broadcasts.
Yingke CEO Fengyousheng said that Yingke has only more than 700 employees, but it manages the largest number of anchor team in the industry. Without the support of BAT and taking sides, we have reached the end of our laughter in the most brutal battle of thousands of broadcasts with our continuous improvement of product and technological innovation capabilities.
1. Yingke established
Beijing Milywood Network Technology Co., Ltd. was established in March 2015 with a registered capital of 10 million yuan (subsidized but not paid in actual payment). There are three shareholders in total. Feng Yousheng, Liu Xiaosong and Shenzhen Kuaitonglian Technology Co., Ltd. hold 26%, 27%, and 47%.
Later, the company's registered capital decreased from 10 million yuan to 300,000 yuan. Liu Xiaosong and Shenzhen Kuaitonglian Technology Co., Ltd. both shareholders withdrew, and Feng Yousheng alone invested 300,000 yuan to hold 100% of the shares. The two shareholders who exited
are the major shareholders of angel investor Domi Online. The two companies now hold a total of 49.88% of Domi Online's equity (the shareholding ratio at that time may be higher).
After the two shareholders withdrew, the company's registered capital was reduced from 10 million yuan to 300,000 yuan. The two co-founders of Liao Jieming and Hou Guangling joined, and the investors joined, and the registered capital increased to another 1 million yuan.
equity, Zhuzi wants? Is this operation so that the founding team can obtain more equity ratio with very little investment?
In fact, the Company Law stipulates that the dividend ratio and voting rights ratio of a limited liability company can be inconsistent with the investment ratio, but because the Industrial and Commercial Bureau may not be able to pass it, it has to use this method to solve it?
Ask a tax expert, is this operation conducive to tax avoidance?
2. Angel round financing
In September 2015, Yingke obtained an angel investment of 10 million yuan from Duomi Online.
However, the prospectus also stated that on September 22, 2015, November 9, 2015 and December 19, 2015, Beijing Milywood and Domi Online entered into a capital increase agreement, and Domi Online subscribed Beijing Milywood registered capital for a total of RMB 208,300 for a total consideration of RMB 5 million.
raised 10 million yuan in financing, but the total cost is 5 million yuan? They are all information from the prospectus, so I don’t understand what this means?
Feng Yousheng was once the major shareholder of Domi Online with more than 50% of the shares and has withdrawn after 2016.
The three founders of Yingke, Feng Yousheng, Liao Jieming and Hou Guangling, have all worked at Domi Online.
3. Series A financing
A financing was conducted between November 2015 and April 2016. Investors include: Jinsha Jiang Chaohua, Zihui Tianma, Zihui Juxin, Xiamen Saifu, Kunlun Wanwei and Xuanya International, with a total financing of approximately 101.5 million yuan in the A round.
Among them, Beijing Milywood, Jinshajiang Chaohua, Domi Online and the founder entered into an increase in registered capital on October 26, 2015.
The equity transfer agreement entered into by Feng Yousheng and Zihui Juxin on November 8, 2015.
Beijing Milywood, founder, Zihui Tianma, Zihui Juxin, and Xiamen Saifu signed a registered capital increase agreement on November 9, 2015.
For this round of financing, investors subscribed to Beijing Milywood’s registered capital of 208,400 yuan for 25 million yuan.
A+ round financing
On December 24, 2015, Beijing Milywood, founder, Domi Online, Jinsha Jiang Chaohua, Zihui Tianma, Zihui Juxin, Xiamen Saifu, and Kunlun Wanwei entered into an agreement to increase the registered capital. A+ round investors subscribed Beijing Milywood registered capital for a total consideration of 7.77104 million yuan.
A++ round financing
On January 2, 2016 and February 1, 2016, Beijing Milywood entered into a capital increase agreement with A++ series investors. A++ series investors subscribed to Beijing Milywood registered capital for a total of 12,718 yuan for a total consideration of 3.814785 million yuan.
4. Team equity incentive
In May and June 2016, a total of three employee stock ownership platforms were established, including three founders and four employees becoming partners of the shareholding platform, increasing capital to Beijing Milywood and becoming indirect shareholders.
Fengyousheng , the founder and controlling shareholder of Yingke, serves as chairman and CEO, and is mainly responsible for overall development strategy and business planning.
From 2010 to March 2015, he served as senior vice president of Beijing Caiyun Online Technology Development Co., Ltd.
Liao Jieming , one of Yingke's founder and controlling shareholders, serves as executive director and chief operating officer, and is mainly responsible for overall operations.
was responsible for the editorial work of fashion magazines, Sina, health magazines, etc., and from 2014 to March 2015, he served as the operation director of Domi Online (formerly known as Beijing Caiyun Online Technology Development Co., Ltd.).
Hou Guangling, one of Yingke's founder and controlling shareholder, executive director and chief technology officer, is mainly responsible for technological development.
Hou Guangling was the R&D director of Domi Online and Beijing Huanwu Yuedong Network Technology Co., Ltd.
Jiang Gupeng, chief strategy officer of , joined Inke in March 2016.
From 2012 to 2015, he served as vice president and director of Huaxing Pan-Asia Investment Consulting (Beijing) Co., Ltd.
5. Series B financing
In September 2016, Beijing Milywood entered into a capital increase agreement with Xingguanglian, Jiaxing Guangmei, Ningbo Anhe, Ningbo Qingzheng, Mango Cultural and Creative, Shenzhen Tencent, and Zihui Juxin. Series B investors subscribed Beijing Milywood registered capital for a total of RMB 134,454 for a total of RMB 134,454 for a total of RMB 310 million.
In this round of financing, Feng Yousheng transferred 13,321 yuan of registered capital to Jiaxing Guanglian and received 27 million yuan.
Yingke raised a total of 421 million yuan from the Angel Round to the B round. His valuation has increased by 48 times in more than a year, and the company's valuation has reached 3.95 billion yuan.
VI. Investor Privileges
Beijing Milywood, the founder, employee stock ownership platform and investors entered into a shareholder agreement on September 19, 2016. Investors were granted several special rights, including the right to know and access, the right to subscribe, the right to first refusal, the right to jointly sell, the right to counter-dilution, the right to board of directors, the right to redemption and the priority to liquidation.
These rights have been terminated in accordance with an agreement entered into by Beijing Milywood, the founder, employee stock ownership platform and investors on February 13, 2018. However, if it has not been listed on December 31, 2019, investors have the right to restore the terminated special rights.
7. Internal transfer and exit of investors
In July 2016, the A round investor Suzhou Zihui Tianma Venture Capital Enterprise (Limited Partnership), transferred all equity entitlements Zihui Juxin, with a registered capital of RMB 52,462, and the transfer price is RMB 95,611,000.
In July 2016, Beijing Kunlun Wanwei Technology Co., Ltd. transferred all its shares to Tibet Kunno with a registered capital of 226,690 yuan and a transfer price of 142,594,810.70 yuan.
On September 21, 2016, Tibet Kunnuo transferred another 51,397 yuan to Jiaxing Guangxin, with a cost of 210 million yuan, and the valuation of Yingke reached 7 billion yuan .
In August 2016, Xiamen Saifu Equity Investment Partnership (Limited Partnership) transferred all its equity to Xiamen Shengyuan with a registered capital of RMB 104,923, the consideration was RMB 16,473,600.
8. The restructuring with Xuanya International was abruptly
In 2017, I thought I could participate in the capital market by purchasing equity and planned the restructuring matters with Xuanya International.
Xuanya International was just listed on February 15, 2017 and planned to suspend trading on April 11, 2017 to plan restructuring and Yingke's restructuring matters.
On June 21, 2017, Xuanya International released a company, planning to purchase a total of 48.2478% of the equity of Yingke’s founding team and employee stock ownership platform.
announced on September 5, 2017 that the valuation of the restructuring plan for Enke is more than 6 billion yuan, and the transaction price of 48.2478% is 289,486.8 million yuan.
However, Xuanya International's transaction of "snake swallowing elephant" has caused widespread doubts. After several delays, Xuanya International announced on December 16, 2017 to terminate the restructuring with Yingke.
9. Some investors withdrew from
In February 2018, Changxing Shengju Equity Investment Partnership (Limited Partnership) transferred its equity to Mango Cultural and Creative, with a registered capital of 15,614 yuan, and a price of 60.2 million yuan. It is equivalent to about RMB 3.86 per share (equivalent to HK$4.77), which is higher than the closing price of the first day listing.
In February 2018, Jiaxing Guanglian Investment Management Partnership (Limited Partnership) transferred 18,650 yuan to Chiyu Investment (Beijing) Co., Ltd. at a price of RMB 71.8 million. After the completion of the
transaction, Jiaxing Guanglian will still hold the registered capital of Beijing Milywood RMB 13,322.
On March 26, 2018, Yingke submitted an application for listing to the Hong Kong Stock Exchange and will be listed and traded today.
1. Company control
Feng Yousheng, Liao Jieming and Hou Guanglinghe hold a total of about 30.32% of the equity of Beijing Milywood. The three founders have been in concert since the establishment of the company. In addition to the employee shareholding platform, they control about 40.46% of the voting rights before the company goes public, which can exert a significant impact on the company's shareholders' meeting and the board of directors.
and all three founders serve as executive directors, and have the right to exert significant control over the company's management and operations.
The two founding team members Liao Jieming and Hou Guangling and Chief Strategy Officer Jiang Gupeng have both shareholding ratios. The combined shareholding ratio of the two is equivalent to Feng Yousheng's shareholding ratio. During the
AB round of financing, Feng Yousheng reduced his holdings twice, and it seemed that he was not very willing to control the company. The three shareholding platforms were all others as executive partners.
12. VIE architecture
Since Yingke is engaged in a business that restricts the scope of foreign capital entry, Yingke also adopts the VIE architecture. After the reorganization of
and Xuanya International was terminated, Inke began to build a VIE structure in November 2017 to prepare for listing in Hong Kong.
November 30, 2017, registered a company in the Cayman Islands.
Engke Hong Kong was established in December 2017.
Engke China was established in February 2018.
In February 2018, Yingke China entered into a contract arrangement with Beijing Milywood and its shareholders, transferring all the economic interests of Beijing Milywood to Yingke China through agreement services.
and allocate new shares to offshore companies in the same proportion as the equity ratio of Beijing Milywood.
Yingke's VIE structure is different from that of many companies. The VIE structure of many companies is:
The shareholders of domestic operating entities are a few founders, and investors only hold shares in overseas shell companies (not in domestic entity companies), and then transfer all the profits of domestic operating entities to overseas shell companies through agreements, and transfer investors' financing to domestic operating entities for use through loan agreements.
and Yingke's VIE structure is:
The equity ratio of domestic operating entities and overseas shell companies is the same, but the profits of domestic companies are transferred to overseas listed entities through an agreement, and the financing money is placed directly in the domestic companies without transferring funds through loans.
Zhuzi does not understand the overseas regulations, but Yingke's structure obviously has stronger protection for investors. Investors are not only shareholders of domestic companies, but also shareholders of overseas companies. Their relationship is not just an agreement, but also a binding of equity.
is because Yingke’s financing is a RMB fund, so is this architecture used? Are other structures that are not like this all foreign currency funds? Friends who are familiar with the knowledge are welcome to add.
