Beijing Quanshi World Online Network Information Co.Ltd(002995) and
Minsheng Securities Co., Ltd
about
Beijing Quanshi World Online Network Information Co.Ltd(002995) preparations for the meeting of the issuance and Examination Committee for public issuance of convertible bonds
Reply to notification letter
Sponsor (lead underwriter)
(No. 8, Puming Road, China (Shanghai) pilot Free Trade Zone)
February, 2002
China Securities Regulatory Commission:
According to the letter on making preparations for the meeting of Beijing full-time Beijing Quanshi World Online Network Information Co.Ltd(002995) network information public issuance examination committee for convertible bonds (hereinafter referred to as the “notification letter”) issued by your association, Beijing Quanshi World Online Network Information Co.Ltd(002995) (hereinafter referred to as ” Beijing Quanshi World Online Network Information Co.Ltd(002995) “, “the company” or “the issuer”) has worked with the sponsor Minsheng Securities Co., Ltd. (hereinafter referred to as “Minsheng securities” and “the sponsor”) Beijing Guantao Zhongmao law firm, the lawyer of the issuer (hereinafter referred to as “Guantao Zhongmao” and “the lawyer of the issuer”), and Tianzhi International Certified Public Accountants (special general partnership) (hereinafter referred to as “Tianzhi international” and “reporting accountant”) have explained, verified and implemented the issues listed in the notification letter one by one, And reply to the questions raised in the notification letter one by one. The specific situation is reported as follows. Please review it.
Unless otherwise specified, the terms, names and abbreviations used in this reply have the same meanings as those in the prospectus for the public offering of convertible corporate bonds (draft report) and the due diligence investigation report of Minsheng Securities Co., Ltd. on the public offering of convertible corporate bonds.
catalogue
1、 About revenue and gross margin 4 II. About this raised investment project 38 III. about short video service 63 IV. about suppliers 71 v. accounts receivable and payable Vi. about the previous raised investment project 93 VII. About corporate governance one hundred
1、 About revenue and gross margin
During the reporting period, the applicant’s income continued to grow, while the net profit and gross profit margin of display Internet comprehensive marketing services continued to decline, showing an overall trend of “increasing income without increasing profit”. In 2019, 2020 and the first three quarters of 2021, the applicant realized an operating revenue of 2.393 billion yuan, 3.270 billion yuan and 3.190 billion yuan respectively, and the net profit in the same period was 99.05 million yuan, 104.93 million yuan and 69.34 million yuan respectively. The corresponding gross profit margin of display Internet comprehensive marketing services was 7.79%, 5.45% and 3.13% respectively. From January to September 2021, the income related to the applicant’s search engine business was 290831100 yuan, with a large year-on-year decline, but the gross profit margin was 23.95%, an increase of 7.73% percentage points over the annual gross profit margin of 16.22% in 2020. From January to September 2021, the income related to the applicant’s display Internet comprehensive marketing services was 2864.5317 million yuan, which increased significantly year-on-year, but the gross profit margin was only 3.13%, which was higher than the gross profit margin of 2.38% from January to June 2021, but still significantly lower than the annual gross profit margin of 5.45% in 2020. During the reporting period, the issuer’s gross profit margin decreased significantly from 11.58% in 2019 to 4.75% from January to June 2021. The gross profit margin changed from higher than the industry level in the early stage to lower than the industry average level in the later stage, which is mainly related to the significant increase of channel revenue. Among them, when the proportion of channel revenue in 2020 and January June 2021 changes little, the gross profit margin decreases significantly from 7.43% to 4.75%.
Please: (1) explain the specific situation of the manufacturer’s recognition policy and its impact on the recognition and measurement of income and cost; (2) Combined with the orders in hand, the market situation and the actual situation of the industry, the proportion of channel customers and direct sales customers in the display business and the difference in gross profit margin, the change of quarterly gross profit margin, the cost carry forward method, the main rights and obligations of new channel customers and risk distribution, this paper explains the reasons for the sharp fluctuation of gross profit margin of display Internet comprehensive marketing services The rationality of applying the “total amount method” to the relevant income of channel customers, the accuracy of income cost matching and the stability of profitability, indicating whether the accounting of relevant income cost is accurate, whether there is a significant adverse impact on the future performance and sustainable operation ability, the applicant’s corresponding measures and feasibility, and analyzing the impact on the performance after the implementation of the raised investment project; (3) Combined with the main customers and suppliers of search engine, this paper explains the reasons and rationality of the sharp increase in gross profit margin of search engine business under the condition of slowing demand; (4) Explain the reason and rationality of the sharp decline in gross profit margin, whether there is a risk of continuous decline and whether the relevant risks are fully disclosed when the proportion of channel revenue in 2020 and the first half of 2021 changes little; (5) Explain and compare the gross profit margin level of main channel customers in 2020 and the first half of 2021. Is there any difference
Differences, if any, explain the reasons and rationality, and explain whether the main channel customers are different from the applicant and the controlling shareholder
And related parties, whether there is an unfair transfer pricing or other potential interest arrangement
The situation in which the associated party or potential interested party conveys interests in a disguised form. The recommendation institution and the reporting accountant shall explain the verification basis
And the process, and give verification opinions.
reply:
(I) explain the specific situation of the manufacturer’s recognition policy and its impact on the recognition and measurement of income and cost
1. Explain the specific situation of the manufacturer’s confirmation policy
(1) Cooperation mode between company and manufacturer
The company’s display and search engine marketing services require the company to provide Internet media resources
The business system opens a general account and sets up sub accounts for the company’s customers under the general account. The company first reported to the Internet media
The physical resource supplier pays the purchase money and recharges the virtual point to the company’s general account, and the company then recharges the virtual point of the general account
The sub accounts to be allocated to the company’s customers for consumption. At the same time, the company can use some Internet media resources
The credit line provided by the source supplier shall be used to recharge the customer’s sub account, and shall cooperate with the media within a fixed period of time
The source supplier settles the credit limit.
The purchase price of the company’s virtual point is determined by the first purchase price and the rebate confirmed by the supplier. Including rebate
It refers to the additional rebate given by the supplier to the company according to the quarterly or annual business volume of the company (return of virtual points or
Cash).
Therefore, the manufacturer’s confirmation policy is the rebate proportion confirmed by the supplier. The change of the manufacturer’s confirmation policy will affect
The purchase cost of the company’s virtual point.
(2) Details of rebate confirmation policies of major manufacturers of the company
From January 2018 to September 2021, the procurement and proportion of the company’s main suppliers are as follows:
Unit: 10000 yuan
Supplier name January September 2021 2020 2019 2018
Proportion of procurement cost proportion of procurement cost proportion of procurement cost proportion of procurement cost proportion of procurement cost
Tencent culture 213238.76 71.20% 209430.70 69.19% 123733.02 59.64% 118704.59 58.69%
Today’s headline 45317.00 15.13% 20979.51 6.93% 3459.27 1.67% 3084.85 1.53%
360 Security Technology Inc(601360) 21,044.72 7.03% 43,792.03 14.47% 54,341.42 26.19% 55,505.80 27.44%
Others 19901.22 6.64% 28502.75 9.42% 25921.59 12.50% 24963.84 12.34%
Total 299501.69 100.00% 302704.99 100.00% 207455.30 100.00% 202259.08 100.00%
Note: “Tencent culture” refers to Beijing Tencent culture media Co., Ltd. “today’s headlines” in 2018 refers to Shenzhen today’s headlines
Technology Co., Ltd. from 2019 to January September 2021 refers to Hubei today Toutiao Technology Co., Ltd. ” 360 Security Technology Inc(601360) ” refers to sanliu
Zero Technology Group Co., Ltd.
It can be seen that the main suppliers of the company from 2018 to January September 2021 are Tencent culture, today’s headlines and three
Sixty.
From 2018 to 2021, the rebate policies of the company’s main suppliers are as follows:
Supplier 2021 2020 2019 2018
name
1. Basic reward: 1. Industry customer reward: according to direct 1. Basic reward: according to 1. Basic reward: according to the rebate of cash consumption of e-commerce customers
2% – 3% rebate based on cash consumption (0% – 14% rebate for direct e-commerce industry and 3% – 9% rebate based on self media);
(rebate for small and medium-sized customers in direct e-commerce industry: 9%); Rebate for cash consumption of physical customers (2. Rebate for assessment of operation ability (7%); 2. Reward for operation ability assessment: 0% – 10%; Incentive: according to the examination of operators 2. Evaluation and reward of operation ability: according to the examination of operators, 2. Basic reward: according to the cash cancellation, the number of new customers, the number of new customers and old customers, and the rebate of 3%; Rebate cash consumption such as the number of old customers retained, the number of old customers retained, etc. 3. Evaluation and reward of operation ability: root point cash consumption
0% – 3% of rebate cash consumption; According to the assessment of operators, the number of new customers is 1% – 6%;
Tencent 0% – 4%; 3. Performance task reward: according to the number of households and the number of regular customers. 3. Performance task reward: 3. Performance task reward: rebate cash consumption according to the completion of quarterly tasks. Rebate cash consumption according to the completion of quarterly performance assessment tasks. 0% – 3% of cash consumption according to the completion of quarterly performance assessment tasks; 0%-5%； Completion rebate
0% – 3% of consumption; 4. Other rewards: Based on new customers 4. Performance task rewards: Based on quarterly 0% – 3%, based on annual over 4. Other rewards: Based on the completion of new customer consumption and old customer consumption increment tasks, rebate cash amount, performance completion, return consumption, old customer consumption growth, long-term, old customer recharge times and other consumption of 0% – 5%; 7% – 3%;
Reward rebate for recharge times of old customers; 5. Other rewards: according to the market 4. Other rewards: according to the incentive rebate; 5. Annual reward: according to the annual expansion, consumption of small and medium-sized customers, market development, cash 5. Annual reward: reward rebate according to the overall consumption of the year; Consumption growth rate, consumption of small and medium-sized enterprises and reward rebates. Point. 6. Annual reward: reward rebates according to the annual consumption of customers and other reward bodies. Excitation return point.
1. Quarterly reward: if the total quarterly consumption is more than 2 million yuan, according to 1. Quarterly reward: according to the consumption of bidding, rebate income level, team size, optimization operation ability, development ability and violation of 0% – 3%; According to the consumption of non competitive bidding, rebate rules and other assessment items will be rewarded; 0%-10%；
First 2 of today, annual reward; If the annual total consumption is more than 2 million yuan, the reward will be given according to 2. Annual reward: according to the completion of tasks, income growth, income level, team size, optimization operation ability, development ability, violation, team size, operation ability, etc
