Affected by the news, Ruhan Holdings plunged more than 9% on October 10.
Despite a slight rebound in the 11-day U.S. stock market, Ruihan Holdings was extremely light, with a volume of only $138,600. In fact, in the half year since the listing, the decline has exceeded 51%, and at the lowest point it has fallen by more than 70%.
Or be prosecuted for securities fraud
According to information released by Bernstein Liebhard LLP, such as Hanjiang Holdings suffered a number of collective lawsuits in the United States, mainly because the companys prospectus contains false, misleading statements or undisclosed information.
Bernstein Liebhard LLP stated in the statement that:
1) When Ruhan Holdings launched its initial public offering, the number of online stores in the company has declined by nearly 40%.
2) In the initial public offering, the number of net bonuses in the whole service of Ruhan Holdings has been reduced by nearly 44%.
3) Because of this, the companys net revenue from the whole service sector decreased by 46%.
Kaplan Fox & Kilsheimer LLP, another law firm, said in a statement that Ruhan Holdingsnumber of online stores had been growing, from 57 on March 31, 2017 to 86 on March 31, 2018. But when Ruhan Holdings released its after-market earnings on June 13, 2019, the company disclosed that the number of its online stores actually declined in the fourth quarter, which ended March 31, 2019, before its listing.
Kaplan Fox & Kilsheimer said that as of Oct. 8, 2019, Ruhan Holdings had fallen by 47%, far below the issue price.
On April 3, 2019, if Hanhan Holdings landed on the Nasdaq Stock Exchange, the issuance price was set at $12.5/ADS. Each ADS represents five Class A common stocks. On the first day of listing, it fell by more than 37% and closed at $7.85/ADS.
It is noteworthy that media reports, including Kaplan Fox & Kilsheimer LLP, Bernstein Liebhard LLP and Glancy Prongay & Murray LLP, have announced in the past month that they will initiate collective lawsuits on behalf of Ruhans controlling shareholders, totaling about 30 cases.
Such as strong response:
Its just a way for small law firms to make money.
If the implication emphasizes that all the information disclosed by the company is all right and fully compliant and legitimate.
At present, the companys American attorney, STB Law Office, helps the company deal with such matters. Everything in the companys daily operation is normal and unaffected.
Ruhans loss narrowed in the first half of the year
But Zhang Dayi cant sell the goods?
If there is securities fraud in Hanyu Holdings, the U.S. court will decide. But if Hanyu Holdingsfinancial report shows that the carrying capacity of the companys head net bonus is declining, this is an indisputable fact.
On August 29, Ruhan Holdings of Netred Manufacturing Factory released its unaudited financial performance report for the first quarter of fiscal year 2020. As of June 30, 2019, the companys GMV (total commodity value) was 758 million yuan, up 50.4% from the same period last year, and its net income was 313 million yuan, up 34.3% from the same period last year. However, Ruhan still failed to make a profit. After adjustment, the companys net loss to its mother was 21.6 million yuan, which narrowed by 51.6% over the previous year.
Meanwhile, the number of net bonuses signed by Ruhan increased by 5 to 133 and the number of fans increased by 16.9 million during the reporting period.
Among them, the companys top and middle net red number growth stagnated, corresponding to the number of fans dropped from 66 million in March to 62 million in June, but the waist anchor showed a ring ratio, and the corresponding number of fans increased significantly from 89.1 million to 110 million.
Zhang Dayi, Dajin and Liebelin, the three top net stars, contributed 369 million GMV to the company, almost half of the total GMV, but the growth rate of the head net red belt goods is declining.
According to the data, the revenue of the whole service business owned by Zhang Dayi and other three top netizens increased by only 17% to 247 million yuan.
National Husband bombardment?
On the first day of listing, Ruhan Holdings shares broke, down 37%, the most in recent years.
Wang Sicong, known as the National Husband, commented on Weibo that Ruhans failure in listing was not due to the liquidation of KOL under Ruhans signature, but because Ruhan itself had problems.
Wang Sicong believes that Ruhan has three problems: 150 million marketing costs are puzzling; 2. Platform revenue relies too much on Super Net Red Belt, but the latter can not be replicated. 3. If Han cant prove that he can cultivate a new KOL.
As can be seen from the latest financial reports, the issue of Ruhan Holdings seems to have been mistakenly addressed by Wang Sicong.
So far, such as Hans head net red is still Zhang Dayi, Libelin and Dajin. Although the results show that the marketing expenses of Ruhan increased 71.7% to 74.1 million yuan in the second quarter of 2019, the next Zhang Dayi has not yet been created.
After the slow down of the red belt cargo capacity of Head Net, Ruhan Holdings has focused more on the platform business, that is, the high-profit third-party business.
Ruhans growth rate of all-service business declined
The main reason for the growth of platform business is that part of the clothing and cosmetics sales of shoulder and waist net red have changed from full service mode to platform mode. The number of brands offered by net red under platform mode has also increased to 701, an increase of 136% over the same period of last year.
Overall, if Hanquan service network Reds have been reduced by 11, platform network Reds have increased to 122. In fact, this change was reflected as early as the fourth quarter of Ruhan in fiscal year 2019. According to its fourth quarter of fiscal year 2019, the net bonus of Ruhans newly signed full service decreased by 56% compared with the same period last year. On the contrary, the net bonus of the newly signed platform sector increased by 114% compared with the same period last year.
Thats the second reason Bernstein Liebhard LLP sued Ruhan Holdings.
What is full service business?
The whole service business, that is to say, if it builds its own channels and makes profits from its own net red belt goods, can be understood as self-service business, while the platform business can be understood as a third-party business by relying on net red to provide services such as carrying goods and marketing for third-party brands.
This is not difficult to understand, such as why Hanhan Holdings gradually inclined to the platform business, reducing the whole service business.
Even so, if Hanhan Holdings does not dare to talk to Zhang Dayi about Bye Bye, after all, the whole service business still accounts for half of the revenue.
Netizens call: Zhang Dayi come out and do it alone!
On April 3, 2019, Ruhan Holdings, where Zhang Dayi is located, went public. Zhang Dayi, 30, is not only the second largest shareholder in Ruhan Holdings because of his 13.5% stake, but also has a family of nearly $90 million (about 600 million yuan) based on the closing price on the first day of the listing.
With Ruhan Holdings falling all the way, Zhang Dayis family is shrinking. Many fans are calling for Zhang Dayi to come out and do it alone.
Fans say that she alone supports Ruhans sales of 50% to 60%, and that the profits of Taobao stores must be shared with Ruhan by 50%. She is distressed.~~~~
According to the prospectus of Ruhan Holdings, as long as Zhang Dayi cashed out, resulting in less than 5% of his shares, then he could break the contract with Ruhan Holdings and go it alone.
However, according to the latest financial statements, China Himalaya Investment, which Zhang Dayi owns wholly, is still the second largest shareholder of Ruhan Holdings.
According to Zhang Dayis latest developments, Zhang Dayi is no longer satisfied with just participating in the whole service business, and the platform business is also doing well. She not only broadcasts Taobao live, but also receives representatives from other brands, such as Dashidi Steak, Yameng Radio Frequency Instrument and so on.