Guangdong Media (002181) recently announced that due to the serious insolvency of Shanghai Advertising Xiangli Media Co., Ltd. (hereinafter referred to as “Champsâ€) and the loss of debt repayment ability, the company agreed that Xiang Lili should apply to the court for bankruptcy liquidation.
According to the audit data, from January to July 2016, Champs-Ely was losing 228 million yuan. As of July 31, 2016, the total assets were 120 million yuan and the total liabilities were 339 million yuan. There was a serious insolvency and there was significant uncertainty in the ability to continue operations.
The parent company, Guangdong Media, said that in order to reduce losses and safeguard the legitimate rights and interests of the company and its shareholders, it agreed that Xiang Lili should apply for bankruptcy liquidation.
Lawsuit
It is reported that Champs also has many lawsuits.
Guangdong Media disclosed that as of August 31, 2016, there were 81 lawsuits and arbitration cases involving Xiang Lili, and the total amount involved in the lawsuit was 190 million yuan.
Among them, 71 defendants in litigation and arbitration cases were Xiang Lili or jointly sued the general manager of the company, Ye Mei, and requested the defendant to pay the target amount, liquidated damages, compensation and litigation fees totaling 185 million yuan; Xiang Lili as the plaintiff There were 10 lawsuits, and the defendant was requested to pay the total amount of the target, liquidated damages, etc., totaling 4.85 million yuan.
Guangdong Media said that for the relevant litigation, the company will accrue other payables and estimated liabilities for the corresponding matters, which are respectively 12.324 million yuan and 11.619 million yuan, which makes the company's consolidated statements of non-operating expenses and management expenses increase correspondingly. Profits from January to August have a significant impact.
Dreams are too beautiful, reality is cruel
It is reported that in 2014, Guangdong Media purchased a 100% equity interest in the outdoor LED advertising media company, Xiang Lili, by issuing shares and paying cash. According to the acquisition announcement, more than 20 shareholders of Xiangli, such as Ye Mei, promised. The profit of Xiang Lili from 2014 to 2016 was not less than 56.83 million, 68.7 million and 81.56 million yuan respectively.
After the announcement, many analysts gave high praise, saying that this is the media-wide integrated marketing model for Guangdong Media to expand the channel of all-media advertising operations, enhance the core competitiveness of the main business, and promote "newspaper + outdoor + new media". A big step. After the approval of the acquisition plan, the company's share price was once stronger.
But the days that followed were not as good as people thought, and the troubles followed. At the end of 2014, Champs could not fulfill its performance commitment. In 2015, Champs-Ely suffered another huge loss, directly affecting the profit of Guangdong Media. Guangdong Media's 2015 consolidated statement operating income was 1.292 billion, down 20% year-on-year, and net profit was -445 million. , down about 294% year-on-year.
On March 16, 2016, Guangdong Media announced that it was informed by the Guangzhou Police Department that Ye Mei, the general manager of Shanghai Xiangli Advertising Media Co., Ltd., was found guilty of contract fraud. It can be said that the wall is in trouble.
Poor management, lack of management
We can see from the current information of the Champs-Elysées that Guangdong Media has at least a pre-existing risk control and lack of internal control management. At the time of the merger and acquisition of Guangdong Media, the company, brokerage, lawyers, and accountants had major flaws in their efforts. The fundamental reason was the transformation pressure of the Guangdong Media. The launch was early but not effective.
After deciding to lay out the outdoor LED advertising business, driven by the strategy of accelerating performance improvement and promoting transformation, it will inevitably exist to speed up the process of M&A and simplify or weaken the original M&A risk control process.
In addition, after the merger, the relevant media of Guangdong Media and Champs-Elys are insufficient, and there is a shortcoming.
From the performance of Guangdong Media after completing the merger and acquisition of Champs, it is not in place to control the control of Champs through finance. For example, when the large amount of accounts receivable appeared in the first half of 2015, it took action. In the face of the other party's use of legal means to resist, the two sides of the merger reached a crack in a short period of one year, showing that the integration of the two sides after the merger did not do well.
Deviation from the direction of transformation and upgrading
In its 2014 annual report, Guangdong Media described the company as “a leading company in China's outdoor LED large-screen new media marketâ€, but it was hit by the Internet and mobile Internet.
As an early advertising form, outdoor LED large screen has been rapidly developed in the early stage due to its unique advertising space resources and dynamic display forms. However, customer resources have experienced large bottlenecks in recent years, and high-end customers, especially local governments, have attracted high-end investment. It is difficult for customers to attract investment twice.
Due to the high price, it is unable to attract small customers, resulting in a significant increase in revenue, and it is difficult to break through the profit model. In addition to the huge diversion of Internet advertising, the operating losses of the industry continue to expand.
As a traditional newspaper listed company, Guangdong Media is obviously eager to reverse the traditional business trend and transform the layout of new media business. However, the main business of Xianglili still belongs to the traditional advertising business, which will inevitably be squeezed by new media.
The acquisition of Champs by Guangdong Media can only be regarded as enriching the advertising business, but it has not fundamentally transformed the business through “Internet +†and optimized the income structure. Therefore, the acquisition of Champs by Guangdong Media has not achieved the transformation effect from both the business transformation and financial investment.
Unexpectedly, Guangdong Media had thrown 450 million yuan in the two years ago, and did not bring the expected performance contribution.
In 2015, Guangdong Media only accrued bad debts of accounts receivable and impairment of goodwill. The two amounts amounted to 375 million yuan and the annual loss was 445 million yuan. In the first half of this year (2016), the company's loss amount was 83.229 million yuan. This is a relief for the Guangdong media, or a quagmire, and it can only be tested in the future.
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