Securities code: Kelin Environmental Protection Equipment Inc(002499) securities abbreviation: ST Colin Announcement No.: 2022034 Kelin Environmental Protection Equipment Inc(002499)
Announcement on the reply to the letter of concern of Shenzhen Stock Exchange
The company and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete without false records, misleading statements or major omissions.
Kelin Environmental Protection Equipment Inc(002499) (hereinafter referred to as “listed company” or “company”) received the attention letter on Kelin Environmental Protection Equipment Inc(002499) (2022) No. 214 from the company Department of Shenzhen Stock Exchange on April 17, 2022. The company implemented the relevant issues one by one, and now the relevant replies are announced as follows:
I The reply said that the information technology service business segment mainly focuses on relevant services at the level of big data information technology services, such as marketing strategy formulation, data tracking and analysis, delivery optimization, etc. When replying to our previous inquiry letter (CGH [2022] No. 62) (hereinafter referred to as “the previous reply”) on February 15, 2022, your company said that your subsidiary yiyoule network technology (Beijing) Co., Ltd. (hereinafter referred to as “yiyoule”) and Xiake (Shanghai) Advertising Co., Ltd., Beijing Rongshan Yuanhai Network Technology Co., Ltd The agreement signed by Zhixiang (Xiamen) Media Co., Ltd. stipulates that yiyoule will provide it with content promotion related services, including but not limited to media content production, data analysis, media platform promotion, launch advantage analysis, cost estimation, scheme formulation, industry data support, operation optimization, etc. Please give clear examples one by one of the specific service contents of marketing strategy formulation, data tracking analysis and launch optimization provided by yiyoule in the reply, and the specific service contents of media content production, data analysis, media platform promotion, launch advantage analysis, cost estimation, scheme formulation, industry data support and operation optimization provided by yiyoule in the previous reply, as well as the corresponding data sources Information system and personnel guarantee.
[company reply]:
1. Service content
The “media content production, data analysis, media platform promotion, launch advantage analysis, cost estimation, scheme formulation, industry data support, operation optimization” and other service contents mentioned in the contract signed between yiyoule and the above customers are the service contents that yiyoule can provide externally. In the actual service process, the needs of different customers are inconsistent. Yi Youle will design the service scheme and provide the service content in a non standardized and customized manner according to the needs of customers, that is, “marketing strategy formulation, data tracking analysis, delivery optimization, etc.” are the services that Yi Youle actually provides for the above customers.
Taking Beijing Rongshan Yuanhai Network Technology Co., Ltd. as an example, the specific contents of marketing strategy formulation are as follows: according to the big data analysis, the advertising strategy system locks in the target customers, focuses on the target population, reduces the cost, avoids waste, and puts the target advertising in the specific consumer group. The specific content of data tracking analysis is to collect the effect data and user behavior data in the process of advertising, and further refine the user attributes, advertising types and other information, so as to optimize the effect of advertising. The specific content of delivery optimization service is to adjust and optimize the advertising delivery parameters to improve the advertising delivery effect and meet the ROI needs of advertisers. Yi Youle provides services such as marketing strategy formulation, data tracking analysis and delivery optimization, which is a set of comprehensive advertising solutions. By analyzing various data and labels such as user group type, interest preference, consumption performance and use time period through its own system, constructing user portrait, and generating delivery strategy scheme according to the algorithm, it can help customers deliver efficiently and accurately, improve user click through rate and order rate, and effectively control the cost of advertising.
2. Data source
All data sources of the company’s big data analysis advertising strategy system include but are not limited to the following: first, advertisers’ own data. Advertisers can accumulate a considerable amount of customer basic information and purchase behavior data in the daily business process.
Second, the company obtains data in the process of providing services. The company provides customers with internet marketing services, and the marketing launch display data, click data, transformation data, user behavior data and other data obtained in the process of providing services.
Third, obtain data through legal purchase from a third party.
At the same time, all data entering the company’s system will be desensitized for data security and data privacy. The data left in the system are statistical results and the original data will not be retained.
3. Information system
Yiyoule has independently developed a system that can be used for big data analysis advertising strategy. The research and development of the system is mainly based on the following two points: first, yiyoule has the technical basis for the research and development of big data analysis projects. Second, the advertising industry is accelerating the integration. At this stage, advertisers’ requirements for the efficiency, accuracy and conversion rate of advertising are gradually increasing, The advertising strategy driven by “data + technology” has gradually become the development direction of the industry. The more accurate the advertising strategy is, the more conducive it is for advertisers to make correct advertising judgment, so as to carry out targeted advertising and optimize and improve the advertising effect.
According to different industries, different delivery conditions and other characteristics, combined with user behavior characteristics, the system establishes a recommendation algorithm model through machine learning, and finally presents different types of advertisements to matching users, so as to meet the needs of accurate delivery of upstream advertisers and efficient cash realization of downstream media.
4. Personnel guarantee
In order to develop and maintain the big data analysis advertising strategy system, Yi Youle has established a separate project team of the business to carry out long-term technical research and development on the system from the aspects of R & D environment construction, relevant data research and analysis, relevant database table design and launch strategy module development, and the operation and maintenance personnel are responsible for the update, maintenance and troubleshooting of the system before and during application.
In terms of operation, yiyouleyou business personnel carry out market development, communication and negotiation with customers and suppliers, contract signing, customer maintenance, fund collection and other work, and conduct in-depth analysis and communication on specific needs.
[accountant’s reply]:
To solve the above problems, the accountant mainly implemented the following verification procedures:
1. Interview relevant personnel of the company to understand the personnel composition and service ability of the company’s information technology services;
2. Conduct sample interviews with customers and relevant suppliers of information technology service business, investigate whether the company has a relationship with customers and suppliers, the source of transaction funds and performance ability, check the key terms of the contract, and judge whether the transaction has commercial essence in combination with the specific service content and collection;
3. Carry out it special audit on the software system on which the company provides information technology services to confirm the authenticity of the software system and whether the function of the software system meets the service demand.
According to our verification results, we believe that the information system that yiyoule business relies on to carry out information technology service business is self-developed and is a technical support system to provide customers with information technology services. Yiyoule is equipped with a team of professional technicians and business personnel, which can ensure the company to carry out information technology service business.
II According to the reply, Yi Youle generally signs a framework cooperation agreement with customers with new media data delivery needs to determine the cooperation relationship. After receiving customers’ demand orders, according to the agreed projects and budget amount, and according to the characteristics of different industries and different needs, Yi Youle relies on big data to lock the target consumer groups, so as to formulate different delivery strategies and implement media delivery. Please explain the agreed method and process of the project and budget amount in combination with the specific terms and contents of the contract and attached documents, and give examples to illustrate how to formulate different delivery strategies according to the needs of customers and how to convert the customer’s demand order into delivery order.
[company reply]:
Take Beijing Rongshan Yuanhai Network Technology Co., Ltd. (hereinafter referred to as “Rongshan Yuanhai”) as an example:
1. Contract signing and specific contents: the company directly signed a written framework agreement with Rongshan Yuanhai to provide services.
2. Agreement process of budget amount: after Rongshan Yuanhai has advertising demand, it will agree with the company’s operators on the service promotion brand, budget amount, delivery cycle, etc. through wechat, telephone, e-mail, etc. 3. Specific operations: after the company receives the demand from Rongshan Yuanhai, the operation personnel cooperate with the technical support personnel to analyze various data and labels such as user group type, interest preference, consumption performance and use time period through the company’s own system, build the user portrait, and generate the delivery strategy scheme according to the algorithm, which shall be confirmed by both parties, The brand promotion materials for Rongshan Yuanhai help customers deliver efficiently and accurately.
[accountant’s reply]:
For the above matters, the accountant mainly implemented the following verification procedures:
1. Understand, evaluate and test the effectiveness of internal control design and operation related to information technology services; 2. Understand and check the relevant information of information technology services, including but not limited to checking the key contract terms of service business contracts, and understand and investigate the service contents of suppliers and customers.
3. Interview major customers and suppliers to understand the way and process of price agreement and judge whether the transaction has commercial essence;
According to our verification results, we believe that yiyoule generally signs a framework cooperation agreement with customers with new media data delivery needs to determine the cooperation relationship. After receiving customers’ demand orders, according to the agreed projects, budget amounts, etc., and according to the characteristics of different industries and different needs, yiyoule relies on big data to target consumer groups, and generates a delivery strategy scheme according to the algorithm, which is confirmed by both parties. The above service contents The agreed method of project amount and business process are in line with industry practices.
III The reply said that the revenue recognition method of yiyoule is consistent with that of Listed Companies in the same industry Nanji E-Commerce Co.Ltd(002127) , Leo Group Co.Ltd(002131) , Kaisa Jiayun Technology Inc(300242) . Please make a comparative analysis between yiyoule and the above three companies on the business model, the position of the industrial chain, the customer resources and advertising agency rights, the management policies adopted for upstream and downstream receivables and payables, and the risks to be borne in the launch process. On this basis, explain the similarities and differences between yiyoule and the above three companies, and the reasons and rationality why your company believes that the income recognition methods of yiyoule are consistent with those of the above three companies.
[company reply]:
1 Nanji E-Commerce Co.Ltd(002127)
Business model: provide advertisers with one-stop services such as marketing strategy formulation, creative planning and material production, media resource integration, data tracking and analysis, short video customization, delivery optimization and so on.
Location of industrial chain: advertising agent
Customer resources and advertising agency rights: the exclusive agent of Xiaomi effect e-commerce, the core agent of vivo e-commerce finance, the core agent of oppo online service industry, the core agent of “huge engine” of bytewo’s marketing platform, and the core agent qualification of Kwai.
Settlement mode and credit policy: customers usually pay advance payment after signing the cooperation agreement, and recharge the media in the background before consumption; Some customers will choose the company to pay the media release money in advance. According to the contract, the customers will settle the release money with the company according to the settlement methods such as advertising release time, downloads and clicks. Give different credit policies according to the amount of customers.
Risk: the company’s operation Department is responsible for the optimization of advertising promotion of customers in the media background. If there are problems in the promotion process due to the company’s reasons, the company will bear all responsibilities. In the promotion process, if the operator’s operation error leads to exceeding the customer’s budget, the company shall be liable for compensation.
Business model: for advertisers to recharge on the advertising platform through the company’s advertising agency right. When the above advertising platform clicks the corresponding website, the recharge account will automatically deduct the fee.
Position of industrial chain: middle link of business chain
Customer resources and advertising agency rights: one of the leading agencies of Tiktok and Kwai, and core agents such as today’s headlines
Settlement mode and credit policy: it mainly adopts the way of advance payment to form a strategic cooperative relationship with important suppliers; The company purchases according to the quantity from the supplier and settles the rebate quarterly or annually. In terms of payment mode, the top five suppliers adopt the payment method after the credit period, the purchase flow of some platforms adopts the pre recharge method, and the effect media adopts the pre recharge method.
3 Kaisa Jiayun Technology Inc(300242)
Business model: provide search engine marketing services for advertisers
Position of industrial chain: middle link of business chain
Customer resources and advertising agency rights: core agent of vivo online service industry, core agent of oppo e-commerce finance and game industries, and exclusive agent of Xiaomi life service industry; Baidu SEM five-star agent, baidu original advertising four-star agent and other agency qualifications; Massive engine advertising agency partner in 2020.
Settlement mode and credit policy: first pay to upstream media enterprises to purchase media advertising resources, and form prepayment; Some media that cooperate closely with the company give the company credit account period, and adopt the method of consumption before settlement for advertising, thus forming accounts payable; For some advertisements, it is mainly required to prepay advertising funds to the company before advertising, so as to form advance receipts.
Risk: the risk that accounts receivable cannot be recovered; Risk of withdrawing bad debt reserves.
4. Yi Youle
Business model: provide advertisers with comprehensive solutions such as marketing strategy formulation, data tracking analysis and delivery optimization
Position of industrial chain: middle link of business chain
Customer resources and advertising agency: in terms of information technology service business, the company has perfect big data analysis talents and independently developed the big data analysis advertising strategy system, which can use big data analysis to provide efficient and accurate delivery strategy guidance for media delivery demanders, help customers deliver efficiently and accurately, improve user click through rate and order rate, and effectively control advertising delivery costs. In the service process, the company has accumulated many customers and advertising agency resources.
Settlement mode and credit policy: after signing the cooperation agreement, the customer will generally pay the advance payment according to the customer’s budget, and recharge the media in the background before consumption; Some customers will choose the company to advance the media release money, and the customers will settle the release money with the company according to the actual release plan. Give different credit policies to different customers.
Risk: the risk that accounts receivable cannot be recovered; Refund and compensation risks when the launch plan is not as expected. 5. Specific analysis
From the perspective of pricing method, the company is the main responsible person. Generally, the regular quotation and discount are more open and transparent in the market, but the specific rebate and other special policies shall be determined by both parties through negotiation. The company obtains higher discounts from suppliers through negotiation, and determines that a single customer enjoys the actual discount of a supplier according to the situation of each customer. The determination of the discount has high autonomy and belongs to independent pricing.
The company negotiated pricing with suppliers and customers respectively. The cooperation agreement between the company and the supplier does not specify the price of services provided by the company to third parties
