On January 26, Goody Science & Technology Co.Ltd(002694) (002694, SZ) held a meeting of the board of directors and agreed that the company would apply to the court for bankruptcy liquidation of Mengqi cultural tourism as a creditor on the grounds that its wholly-owned subsidiary, Alxa League Mengqi Cultural Tourism Development Co., Ltd. (hereinafter referred to as “Mengqi cultural tourism”) was insolvent and unable to pay off its due debts.
For cross-country enthusiasts, the Alashan hero club held by Mengqi cultural tourism and Goody Science & Technology Co.Ltd(002694) subsidiaries is quite famous, and the bankruptcy of Mengqi cultural tourism may be related to the poor situation of Alashan hero club.
“dream” shattered
As of December 31, 2021, Goody Science & Technology Co.Ltd(002694) borrowed 287 million yuan from Mengqi cultural tourism. Because the assets of Mengqi cultural tourism are insufficient to pay off all debts, in order to protect the legitimate rights and interests of the shareholders and creditors of Mengqi cultural tourism, the company plans to apply to the court for bankruptcy liquidation of Mengqi cultural tourism as a creditor on the grounds that Mengqi cultural tourism is insolvent and unable to pay off its due debts in accordance with the enterprise bankruptcy law.
It is understood that Mengqi cultural tourism was established on May 8, 2017 with a registered capital of 90 million yuan. As of December 31, 2021, the total unaudited assets of Mengqi wenlv are 706 million yuan, the total liabilities are 1.302 billion yuan, the net assets are – 596 million yuan, and the undistributed profit is – 691 million yuan, which has been seriously insolvent.
Why did Mengqi wenlv go bankrupt? All this should be mentioned before the establishment of Mengqi cultural tourism.
In July 2016, Goody Science & Technology Co.Ltd(002694) announced that it planned to establish an automobile cross-country event management company jointly with off-road Yizu (Beijing) Investment Management Co., Ltd. (hereinafter referred to as “off-road Yizu”) and Shanghai Xiangdi Yike Investment Co., Ltd. (hereinafter referred to as “Xiangdi Yike”). So far, “cross country race (Beijing) Co., Ltd.” (hereinafter referred to as “cross country race (race)”) was established. Among them, Goody Science & Technology Co.Ltd(002694) contributed 91.8 million yuan, cross-country gens 87.3 million yuan and local artists 900000 yuan. Before that, Goody Science & Technology Co.Ltd(002694) was just an enterprise producing PVC pipes.
It is worth mentioning that there is a private network platform called cross-country e family, which is directly controlled by “cross-country family”. Here, the reporter of the daily economic news refers to the two as “cross-country gens”.
Subsequently, Goody Science & Technology Co.Ltd(002694) announced that the cross-country race (event) would cooperate with the international famous organization Amaury Sport Organization (representative activities: Dakar Rally, tour de France bicycle race) to hold the Dakar China series. Through the cross-country race, Goody Science & Technology Co.Ltd(002694) successfully entered the field of cross-country activities.
Then the cross-country race (event) participated in the 2016 Alashan hero meeting, which achieved a direct economic benefit of 542 million yuan, making the first gold in the field of sports events for Goody Science & Technology Co.Ltd(002694) . In 2016-2017, Goody Science & Technology Co.Ltd(002694) sports event revenue was 61 million yuan and 294 million yuan respectively, with gross profit margin of 90.66% and 64.57%.
On July 24, 2017, Goody Science & Technology Co.Ltd(002694) decided to increase investment in cultural and tourism events. On July 24, 2017, Goody Science & Technology Co.Ltd(002694) passed a proposal to invest 997 million yuan through Mengqi cultural and tourism, a wholly-owned subsidiary, to implement the construction project of Alxa Desert dream automobile aviation Park – automobile park (Interactive Entertainment area). The company said that the project was based on the site of “Alxa hero Association”, Make full use of Tengger’s unique desert resources and the organization and operation mode, brand effect and great influence of “Alxa hero Association” to create a desert automobile culture theme park.
As the park is located in the hinterland of the desert, the construction of roads in the early stage is very difficult. At the same time, the project covers a huge area and the cost of equipment maintenance is very high. According to the annual report, in 2017, Goody Science & Technology Co.Ltd(002694) invested 421 million yuan in the construction project of “Alashan desert dream auto aviation Park – Auto Park (interactive entertainment area)”. By the end of 2018, the company had invested 569 million yuan in the project. In 2020, Goody Science & Technology Co.Ltd(002694) said in reply to the annual declaration note of Shenzhen stock exchange that the Alashan Auto Park project has actually completed an investment of 1.21 billion yuan.
High investment does not bring corresponding high returns. According to the 2018 annual report, the revenue of the sports event sector was 41.2487 million yuan, but the operating cost of the sector was as high as 58.7587 million yuan, with a loss of more than 17 million yuan and a gross profit margin of – 42.45%. The operating revenue of Goody Science & Technology Co.Ltd(002694) sports events in 2019 and 2020 was 62.6533 million yuan and 3.1132 million yuan respectively, and the gross profit margin was 45.93% and 12.41%.
Goody Science & Technology Co.Ltd(002694) in the 2019 annual report, it was said that due to multiple lawsuits involved in Mengqi cultural travel, the debts could not be repaid when they were due, the bank accounts were frozen, and the main assets used for business activities were sealed up. Mengqi wenlv plans to improve its sustainable operation ability by reaching a settlement with creditors, unsealing the seized assets, obtaining loans by mortgaging assets, and improving the efficiency of operation and management. After more than two years of efforts, Mengqi wenlv, which has fallen into the “bottomless pit” of investment, has still come to the end of bankruptcy liquidation.
“hero” has changed
In addition to the financial pressure brought by huge investment, the decline in the popularity of Alxa hero club activities is also the reason for the disillusionment of the “dream” of Mengqi cultural tourism.
It is understood that the Alashan heroes association is a cross-country activity, which was originally organized by the cross-country group. It was first held in 2006. In 2011, cross-country group and Inner Mongolia Alashan League jointly held and permanently settled in Alashan League, becoming the Alashan hero Association. Located 52 kilometers west of Alxa League, the venue of Alxa hero Association desert Geopark has become the main venue of desert cross-country sports in Western China.
Alashan is a holy land for Chinese cross-country players. The early Alashan hero club was a gathering of a group of cross-country players who loved the limits, attracting a large number of hard core enthusiasts to join.
Mr. Peng, a cross-country enthusiast who lives in Chengdu, told reporters that in his early years, he drove thousands of miles to Alxa to participate in activities. Later, after the commercialization of the activities, he stopped participating. He told reporters that in the early days, the Alashan hero club was purely a group of players who liked to play cross-country. Later, the whole activity had been commercialized. The organizers will now surround the venue and charge no low fee to enter. Moreover, the experience of entering the site to participate in the activities is not good, and additional fees will be charged for participating in other projects such as desert cross-country.
Mr. Peng was not surprised by the plight of Mengqi cultural tourism. He said, “it’s just to create a piece of land in the hinterland of the desert, and the investment is huge. Later, there are fewer and fewer tourists, manufacturers, and the income is getting worse year by year. It’s no surprise that the company goes bankrupt.”
The commercialization of cross-country events originally dominated by competition has also led to the withdrawal of hard core players. Some players said on social networking sites that Alxa heroes will “change their taste” and “spoil the desert”. In recent years, the Alxa hero association has frequently broke out negative news, superimposed the influence of covid-19 epidemic and other factors, and the popularity of the hero association has long been gone.
