Xuanya reviewed and approved the merger, will Yingke's founding team cash in and leave?

but how Xuanya completed the transaction will probably have to wait until a more detailed announcement of the transaction plan. However, we can still peep a lot of information, and can confirm some previous judgments.

first of all, Xuanya chose to acquire the equity of the founding team of Yingke. We can see that Yingke founder Feng Yousheng and co-founder Liao Jieming are all on the list. Generally speaking, there are two ways of M & An of A-share companies, one is M & An equity, the other is capital increase, and M & An equity is generally preferred to financial investors or institutional investors in the target company.

so this inevitably makes people wonder, does this mean that Yingke team cashing out, Inker is out of control, is on sale, and even leads to a domino effect in the whole mobile live broadcast field?

< strong > calculate the account first. Will Xuanya do the business at a loss? < / strong >

even if it is not announced, the valuation of Yingke will not be lower than the amount of the previous round, that is, 7 billion. The acquisition of shares in cash means at least 3.5 billion. For a small listed company that has just gone public and earns a profit of 100 million a year, it is bound to borrow from a bank. At the current point of at least 8%, then the interest will be hundreds of millions a year. Xuanya must have calculated this account at the beginning of the acquisition. Therefore, this time Xuanya definitely takes this factor into account in its decision to buy Yingke, so at least it shows that Xuanya has great confidence in the profitability of Yingke.

what's more, Chinese listed companies have stringent requirements for profits, and listed companies with continuous losses will face the risk of forced delisting. Therefore, for asset mergers and acquisitions, the most important thing is to ensure the profitability of listed companies' financial statements.

Yingke has not announced its revenue recently, but both investment institutions and shareholders are very optimistic about his profitability. Zhou Yahui, a Yingke investor, said when asked about Yingke's current development in June this year that Yingke has done a very good job, very successful, and a very high level of profitability. "Yingke's profits are beyond everyone's imagination."

from this level, Xuanya dare not say that he is 100% sure about Yingke, but at least he has done some accounting.

in addition, we should note that there is such a content in yesterday's announcement, "the motion on trial fund-raising to replace self-raised funds pre-invested in fund-raising projects" has replaced more than 20 million, that is to say, Xuanya listed and issued 18 million shares at a price of 16.14 yuan. Xuanya raised some of its own money, and now it seems to be in preparation for the acquisition.

< strong > the founding team is cashing out, but not leaving < / strong >

first of all, we see that basically all the shares of the founding team are bought by Xuan Ya, which we can understand as the founding team cashing out. According to Yingke officials, the founding team did not leave the scene.

< strong > first of all, I would like to make it clear that most mergers and acquisitions of A shares have performance bet agreements, usually three years, and there are requirements for the revenue and net profit growth of the underlying company, so even if the founding team cashes out, if the performance does not meet the requirements, it may not be able to get such a high return. < / strong >

although the specific plan has not yet been worked out, my judgment is that Yingke's founding team should continue to work in Yingke, and there will be no airborne CEO. And from the current situation, we should be able to rule out the possibility of backdoor listing, so for Yingke, the next focus of the performance, I think should be the continued expansion of revenue capacity.

in fact, in A-share mergers and acquisitions, gambling agreements that require three years of profits to reach XX abound. Two or three years ago, there was a wave of game mergers and acquisitions, such as Huayi versus Yinhan, and heroes entertaining each other, such as palm fun and crab play. In a wave of mergers and acquisitions of film and television companies last year, the same was true of some star studios, such as Yang Mi's Jiaxing and Liu Shishi and Wu Qilong's straw bear studio.

take Blue Standard as an example. The company has almost made more than 30 investment mergers and acquisitions in 14 years, most of which are made by gambling agreements. For example, in the investment in financial public relations groups, Blue cursor stipulates "performance commitments". And Blue Standard's acquisition of accurate Sunshine, or even terminated because of substandard performance, Blue cursor's suspension of the acquisition of time-sharing Media at the end of 2012 is directly related to the gambling agreement.

therefore, for Feng Yousheng's team, this money is not so easy to get.

< strong > Why didn't one investment institution return? < / strong >

< strong > you know, Yingke's financing has never stopped. Kunlun, Zihui, Saifu, Xuanya and Jinshajiang are all on the list of so many shareholders, but this time it is relatively rare that no company has withdrawn from the M & A list. < / strong >

this means that these investment institutions are still bullish on Yingke for a long time, so they do not choose to quit in the first place.

for example, Zheng Gang, founding partner of Zihui Venture Capital, said: this kind of high-quality company that is on the right track is worth sticking to for a long time. "as you can see from the announcement, there is no investment institution in the equity transfer, which shows that everyone is optimistic about the future of Yingke."

if we really talk about this according to the bubble theory, it is obvious that the institution should have a greater say. Except for Feng Yousheng, who owns 20% of the equity, the remaining largest shareholders are basically all investment institutions.

what is the purpose of cooperation between Yingke and Xuanya?

in fact, when the merger was first announced, most of the media took a negative attitude, and many media used headlines such as "selling their bodies", "cashing out" and "the bursting of the bubble in the live broadcast industry" to describe the deal. In my previous manuscript, I put forward several different views:

< strong > first of all, for Yingke, choose to cooperate with Xuanya, which is mainly automobile and Internet customers. It is beneficial to the next realization of Yingke, especially for customers with high gross profit margin such as cars, which are naturally complementary to live streaming. < / strong >

here we can expand a little bit. We noticed that after the boom of live streaming, there are many platforms for online celebrity brokers and online celebrity resources, such as Yue du. If we take a closer look at their recent cooperation cases, we can see that most of their customers are car companies and mainly focus on offline activities such as auto shows.

Why are cars so interested in Internet celebrities? The reason is that the auto show itself is a beauty eyeball economy. At the annual Beijing Auto Show and Shanghai Auto Show, everyone looks at the car model as well as the car model, which has already become an indispensable part of the auto show.

and those online celebrity anchors can also attract a lot of popularity and traffic for the auto show, so the car models are offline and the anchors are online, so it is not difficult to understand why car companies and live broadcasters are so close.

< strong > secondly, Yingke is also a very good target for Xuanya. LVB helps to expand its business scope. Yingke's own title of the first LVB platform can also bring it a lot of resources. < / strong >

another thing that hasn't been said is that Yingke itself has a certain profitability. Last year, for example, according to the estimates of people in the industry, this profit range should be about 100 to 200 million a year, so it is not what you think. Yingke has been spending money all the time, but it does have profitability. This year, Yingke has spent a lot of money on mobile games and variety, hoping to maintain growth.

< strong > finally < / strong >

in fact, as early as March this year, Xuanya International signed a strategic cooperation agreement with Yingke, and the two sides plan to set up a joint venture company, focusing on developing various advertising business models suitable for the live broadcast platform, and docking all kinds of potential advertisers to engage in commercial promotion and operation. So for Yingke, which is at the forefront of the industry, can this acquisition become a further enhanced "live +" development model, looking for a partner with both input strength and B-end development ability? It will also help Yingke realize the rapid upgrading of its business model and complete the transformation from "platform" to "ecology".

and at present, Xuanya is only approved, and if the dust of the whole incident is settled, we will have to wait for the announcement in July and August. Let us wait and see where the road of Yingke + Xuanya will go in the future.

Edit: jessica