Sanqi Mutual Entertainment's 2015 net profit doubled 12 times, online game gross profit margin fell 5.9%

Although Sanqi Mutual Entertainment's net profit increased more than tenfold in 2015, the gross profit margin growth of its game products is declining despite its large sales expenses, which are close to one-third of revenue. Sanqi Mutual Entertainment's 2015 annual report shows that the gross profit margin of its online game industry is 62.82%, a year-on-year decrease of 5.94%.

Original title: Sanqi Mutual Entertainment's gross profit margin continued to decline, its performance surged 12 times, and it was accused of being

puffy. A "unknown" listed company that emerged from a small county town in Jianghuai-Sanqi Mutual Entertainment made Wu Xushun's family become the new richest man in Anhui. The throne, which more or less surprised the market.

The reporter's investigation found that on December 31, 2014, Wu Xushun's family shareholding ratio, the actual controller of Sanqi Mutual Entertainment, was 30.65%. Based on the market value of the day, his net worth was 4.255 billion yuan. Based on this calculation, as of December 31, 2015, his net worth was 13.152 billion yuan, and his wealth increased by nearly 10 billion yuan a year.

In fact, before Sanqi Mutual Entertainment completed its "quasi-shell" approach to Shunrong, Shunrong was just an ordinary car fuel tank manufacturer. Shortly after its listing, it became a "shell resource" due to declining performance years after its listing. After the game concept, Shunrong became Sanqi Mutual Entertainment, and eight consecutive daily limits have pulled its share price to 126.47 yuan.

However, although Sanqi Mutual Entertainment's net profit increased more than tenfold in 2015, the gross profit margin growth of its game products was declining despite its large sales expenses, which were close to one-third of revenue. Sanqi Mutual Entertainment's 2015 annual report shows that its gross profit margin of its online game industry is 62.82%, a year-on-year increase of-5.94%.

"Sanqi mutual entertainment is suspected of being 'puffy.'" On May 19, Cai Ling, a cultural industry researcher at China Investment Consulting, told reporters that Sanqi Mutual Entertainment's business is mainly concentrated in the field of web games, but the current growth rate of the web games market has slowed down and the market has shrunk. Even if Sanqi Mutual Entertainment's status in the web games market does not change, its profitability will also decline.

Regarding the above statement, Zhang Yun, secretary of the board of directors of Sanqi Mutual Entertainment, declined to interview reporters on the grounds that the company was suspending trading.

"Fixed increase + acquisition" pushed up stock price and market value soared.

Sanqi Mutual Entertainment's predecessor, Wuhu Shunrong Automobile Parts Co., Ltd.(Shunrong Shares), was established in May 1995 with a registered capital of 134 million yuan. In the view of an Anhui automobile industry official, in Wuhu, a major automobile industry city, there are more than 200 companies providing supporting facilities for Chery, and Shunrong shares are hardly worth mentioning.

Shunrong shares were listed in March 2011. In February 2015, the company changed its name to Shunrong Sanqi, and in January 2016, it changed its name to Sanqi Mutual Entertainment again.

In fact, the company's name change is "in line with the pace" of its capital operation of "fixed increase + acquisition". On December 2, 2014, Shunrong Co., Ltd. received approval from the China Securities Regulatory Commission and approved the acquisition of 60% equity of Shanghai Sanqi Mutual Entertainment; on December 18, 2015, Shunrong Sanqi received approval from the China Securities Regulatory Commission and completed the acquisition of the remaining 40% equity of Shanghai Sanqi Mutual Entertainment. Shanghai Sanqi Mutual Entertainment's main business is web games, and has begun to get involved in mobile games in recent years.

During the trading process, Sanqi Mutual Entertainment's share price rose all the way. Since May 5, 2015, eight consecutive daily limits pushed its share price up to a high of 126.47 yuan.

An Anhui brokerage official who declined to be named told reporters on May 19 that Shunrong shares acquired Sanqi Mutual Entertainment, and the scale of assets placed was larger than the original scale of assets. However, the transaction avoided backdoor listing, and the actual controller of the company remained unchanged. It is a "quasi-backdoor" model.

At present, Sanqi Mutual Entertainment's "quasi-shell" Shunrong shares mean a "win-win" for both parties to the transaction: Shanghai Sanqi Mutual Entertainment contributed 90% of the revenue and profits to the listed company, pushing up the stock price and causing the company's market value to surge; Li Weiwei and Zeng Kaitian, former owners of Shanghai Sanqi Mutual Entertainment, completed asset securitization through the platform of Shunrong shares and jumped into the list of China's richest 500.

The Sanqi Mutual Entertainment Annual Report shows that the company's revenue in 2015 was 4.657 billion yuan, an increase of 678.43% from 2014, and the net profit attributable to shareholders of listed companies was 506 million yuan, an increase of 1,224.18%, leading the performance growth of Anhui listed companies.

Beautiful financial data, or just because the previous performance was too poor

, in fact, the fog above the astonishing data is clear, and perhaps Sanqi Mutual Entertainment is not so beautiful.

After using Wind to count the closing data of 20 listed companies in the "Internet and Related Service Industries" of the China Securities Regulatory Commission on May 20 (excluding abnormal data from Shanghai Steel Union), the reporter found that the Internet industry is generally highly valued, and the average static P/E ratio of 19 A-share Internet companies is 224.73 times, much higher than Sanqi Mutual Entertainment's 60.38.

The reason why Sanqi Mutual Entertainment's financial data surged in 2015 may be that its previous performance was too poor.

After Sanqi Mutual Entertainment (Shunrong Shares) was listed in March 2011, its operating income in 2011, 2012 and 2013 was 338 million yuan, 309 million yuan and 257 million yuan respectively. In 2012 and 2013, the growth was-8.61% and-16.8% respectively compared with the previous year. The net profit attributable to shareholders of listed companies in 2011, 2012 and 2013 was 40.692 million yuan respectively. 12.8705 million yuan and 3.6812 million yuan, an increase of-68.37% and-71.4% respectively compared with the previous year in 2012 and 2013.

The above-mentioned securities trader bluntly said that it is very rare for such a company to become a shell resource after its new listing.

Sanqi Mutual Entertainment seized the right opportunity to place 60% and 40% equity of Shanghai Sanqi Mutual Entertainment on December 2, 2014 and December 18, 2015 respectively, promoting Sanqi Mutual Entertainment's performance in 2014 and 2015. Continuous rapid growth.

However, the game business, which currently accounts for 90% of Sanqi Mutual Entertainment's performance, also hides risks due to excessive sales expenses.

Sanqi Mutual Entertainment's 2015 annual report shows that its sales expenses were 1.459 billion yuan, nearly one-third of operating income, an increase of 1032% over the previous year.

On May 20, a middle-level game company in Shanghai told reporters that the competition in China's game market is fierce, and game companies with slight strength have invested a lot in sales. However, it is very rare for such a large proportion of sales expenses as Sanqi Mutual Entertainment. Among the top ten companies in the web tourism industry where Sanqi Mutual Entertainment is located, except Sanqi Mutual Entertainment, the sales expenses of the other three listed companies in 2015 were 110 million yuan, 28.979 million yuan, and 14.8146 million yuan respectively, accounting for 7.15%, 2.58% and 1.57% of its operating income respectively.

While Sanqi Mutual Entertainment continues to spend large amounts of marketing expenses, the gross profit margin of its game products continues to decline. Sanqi Mutual Entertainment's 2015 annual report shows that the gross profit margin of its online game industry in 2015 was 62.82%, an increase of-5.94% compared with the same period last year. In terms of product categories, its gross profit margin of web games increased by-1.24% compared with the same period last year. The gross profit margin of mobile games increased by-26.35% compared with the same period last year.

Market share growth has encountered bottlenecks, and strong enemies are surrounded by a long road to transformation

. In fact, even if Sanqi Mutual Entertainment invests so much in marketing, its share growth in the web game market has entered a bottleneck period.

According to the "Quarterly Monitoring Report on the China Web Game Market", in the first quarter of 2015, Sanqi Mutual Entertainment relied on the two page games "Sword of the Archangel" and "Legendary Overlord" to rank from seventh in the previous quarter to first place.

Sanqi Mutual Entertainment's 2015 annual report shows that the company's market share as a web game platform in each quarter is 13.4%, 13.9%, 12.7%, and 13.5%, respectively. It only lags behind Tencent in the web game platform and ranks second in the industry; The company's market shares as a web game developer are 9.4%, 9.3%, 9.4%, and 10.4%, respectively, ranking first in the industry.

In addition to having to maintain market share with high marketing investment, Sanqi Interactive also faces attacks from comprehensive large-scale Internet platforms. The top three web game operating platforms in China are Tencent web games, Sanqi games and 360 games.

At the end of March 2015, Tencent proposed the web game strategy of "dual-end integration + building an ecosystem" at the UP2015 annual conference. In addition to making the game experience of web game products closer to that of end games through the improvement of R & D technology, it will also improve its high-quality works on the animation platform are fully open to web game research and development.

This kind of advantageous resource is unmatched by Sanqi Mutual Entertainment.

More importantly, in the entire game landscape of China, the shrinkage of page games will become an inevitable situation. The above-mentioned game company person told reporters that web games experienced an explosion around 2010 and have been gradually declining. Mobile games broke out in 2014, and many web game manufacturers transformed mobile games. The center of the game market in the future will be mobile games becoming mainstream.

Relevant data shows that since the third quarter of 2013, the growth rate of the scale of China's web game market has begun to decline in waves. In the first three quarters of 2015, the growth rates of the scale of China's web game market were 1.2%,-3.3% and 0.1% respectively. The agency predicts that the size of China's web game market will peak at 24 billion yuan in 2016 and will continue to decrease thereafter.

The always sensitive capital market has also shown a "empathy" from web games to mobile games and high-quality end games. Feiliu Jiutian, Perfect World, Dream World, and CMGE Mobile Games, which plan to enter A shares in 2016, are all mobile game giants.

Sanqi Mutual Entertainment has already felt the potential risks and has begun to transform into mobile games, internationalization and "pan-entertainment". Tencent was first proposed by the IP-centered "pan-entertainment" strategy. As a latecomer, Sanqi Mutual Entertainment has not yet established a firm foothold, but it is already surrounded by strong enemies. If "pan-entertainment" replaces marketing investment and becomes the main driving force of the company's business, Sanqi Mutual Entertainment still has a long way to go.

Editor: Nancy