A huge loss of 3.3 billion in half a year! The company that built more than a year of celebration has become a big burden

 A huge loss of 3.3 billion in half a year! The company that built more than a year of celebration has become a big burden

According to the performance report of Yuewen group, in the six months up to June 30, 2020, the company achieved a total revenue of 3.26 billion yuan, a year-on-year increase of 9.7%; and a net profit loss of 3.31 billion yuan, a year-on-year decrease of 941.9%.

The first half of 2020 is full of challenges for reading. The sudden outbreak of new crown and the complex and changeable macro environment have a negative impact on our business, and the company recorded a loss for the first time in many years. Facing the huge loss in the first half of this year, Cheng Wu, vice president of Tencent group and chief executive officer of Yuewen, said frankly, the disappointing performance also makes us aware of the lack of anti risk ability of the companys bottom business model and the structural problems deposited for several years.

Source of Cheng Wus pictures: taken by reporter Dong Xingsheng

The reporter of daily economic news (micro signal: nbdnews) noted that behind the first loss of Yuewen group, it was due to the drag of Xinli media. Although it has created more than a year of celebration and other popular funds, the revenue and operating performance of Xinli media in the first half of 2020 did not meet the expectations. The performance report shows that, affected by this, the impairment of goodwill and trademark rights related to the acquisition of Xinli media was 4.41 billion yuan. What is the main business situation of Yuewen group? How to get out of the loss predicament next?

At the end of August 11, Yuewen groups shares fell 3.16% to close at HK $50.6/share, with a total market value of HK $51.4 billion.

Steady growth of online business revenue by 50.1% year on year

Online business and copyright operation are the two main businesses of Yuewen group.

According to the performance report, due to the expansion of distribution channels and the increase of users willingness to pay for reading content, the online business revenue of Yuewen group increased by 50.1% to 2.495 billion yuan in the first half of 2020, accounting for 76.5% of the total revenue. Among them, the revenue of self owned platform products increased by 101.9% to 1.989 billion yuan.

It is worth mentioning that the daily economic news reporter found that the curse of reducing the user payment ratio of Yuewen group since 2018 has finally been broken. According to the performance report, as of June 30, 2020, the average monthly active users of the companys own platform products and self operated channels increased by 7.5% to 233 million, and the average monthly income of each paying user increased by 51.6% to 34.1 yuan.

Photo source: screenshot of financial report

This means that, although the rise of live broadcasting and short video has brought entertainment diversification, the willingness of online users to pay in the first half of this year has quietly increased.

However, there is still room for further improvement in the online business. Yuewen Group believes that the progress of free reading of the company has not met the expectation. The overall performance of the free reading app flying reading launched in 2019 does not match the leading position of online literature corresponding to reading.

How to adjust next, can increase the revenue of copyright operation? According to Yuewen group, there is an urgent need to establish a top-down planning to promote the construction of IP centric content and operation strategy, promote the development and production of various content forms, and maximize the life cycle value of IP.

Xinli media lost 4.4 billion yuan in goodwill and trademark rights

Since its listing, Yuewen group, which has achieved stable performance, suddenly suffered its first loss in the first half of this year. According to the performance report, the net loss of Yuewen group in the first half of 2020 was 3.31 billion yuan, down 941.9% year on year, while the net profit in the same period of 2019 was 390 million yuan.

This time, the huge loss of Yuewen group is mainly the hidden danger after the acquisition of Xinli media. According to the company, the recoverable amount of goodwill and trademark right acquired by Xinli media is lower than its book value, and the provision for impairment of goodwill and trademark right is RMB 4.016 billion and RMB 389 million respectively. Moreover, Yuewen group predicts that the performance of Xinli media in 2020 will be lower than expected. According to the performance report, in the first half of this year, Xinli media had a revenue of 130 million yuan and a net loss of 97.1 million yuan.

Two years ago (in 2018), when Yuewen Group acquired Xinli media for 15.5 billion yuan, Xinli media made performance commitment: the net profits achieved during 2018-2020 will not be less than 500 million yuan, 700 million yuan and 900 million yuan respectively. If the above performance requirements are not met, the consideration paid by Yuewen group to Xinli media will be deducted accordingly. Previously, every reporter has noticed that Xinli media has not completed the gambling with Yuewen group for two consecutive years in 2018 and 2019, and the total profit of the above two years has decreased by 1.642 billion yuan (including part of the issue consideration shares and cash).

Photo source: screenshot of financial report

This year is the third key period of Xinli medias gambling year. Although it has created a hit drama Qingnian Nian and won two awards in the Magnolia Award of the 26th Shanghai TV Festival, it has won two awards, including the best screenwriter (adaptation) and the best supporting actor. However, due to the lack of a team who is familiar with the network literature business and film and television production to coordinate and coordinate systematically, the integration of reading and Xinli media is not enough Its far from complete success, and the progress is less than expected, said Yuewen group.

Photo source: cats eye professional

In the face of huge losses, how to get out of the predicament of Yuewen group has attracted much attention. In this regard, the company said that it will first strengthen its core business, promote faster growth of IP by enhancing IP incubation capability, consolidating business foundation and accelerating cross business development; secondly, it will improve the social and community functions of the platform; finally, it will strengthen the IP centered ecosystem and seize the new opportunities brought by innovative technologies, business model segmentation and partner network.

In the future, we will focus on upgrading the content, platform and ecology, so as to release the core value of reading and reverse the dilemma. Cheng Wu said.

Reporter Du Wei editor Dong Xingsheng Zhao Yun Wang Jiaqi

Source: Qiao JunJing, editor in charge of daily economic news_ NBJ11279