Securities code: 002291 securities abbreviation: Saturday Co.Ltd(002291) Announcement No.: 2022-010 Saturday Co.Ltd(002291)
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 information disclosed is true and accurate
Accurate and complete, without false records, misleading statements or major omissions.
Saturday Co.Ltd(002291) (hereinafter referred to as “the company”) received the letter of concern on Saturday Co.Ltd(002291) from Shenzhen Stock Exchange on January 21, 2022 (company department concern letter [2022] No. 25) (hereinafter referred to as “the concern letter”). According to the requirements of the concern letter, the company replied to and announced some of the questions listed in the concern letter as follows:
1. For performance forecast, please your company:
In combination with the operating income and its deduction in 2021, explain whether your company still touches on item (IV) of paragraph 1, article 5.1.1 of the stock listing rules (revised in 2022). If so, please supplement the performance forecast and fully disclose the risk indication in a timely manner.
The annual audit accountant is requested to check the above problems and give clear opinions.
Reply: according to the third quarter report of 2021 disclosed by the company, the company achieved an operating revenue of about RMB 1.671 billion in the first three quarters of 2021 (the data is Unaudited). At the same time, according to the preliminary calculation results of the company’s financial department for the annual operating revenue of 2021, It can be judged that the operating income and deduction of the company in 2021 will not touch item (IV) of paragraph 1, article 5.1.1 of the stock listing rules (revised in 2022), that is, “the lower of the net profit before and after deducting non recurring profits and losses is negative, and the operating income after deducting the business income irrelevant to the main business and the income without commercial substance is less than 100 million yuan”.
2. With regard to inventory falling price reserves, please your company:
In combination with the changing factors such as industry environment, business development and promotion strength, explain the reasons and rationality of the significant increase in the provision for inventory falling price in 2021 compared with that in 2020, and whether the accounting policy and determination basis for the provision for inventory falling price in 2021 have changed significantly compared with that in 2020. If so, explain the specific reasons for the change, On this basis, explain whether the provision for inventory falling price in previous years is sufficient and whether your company has earnings management.
The annual audit accountant is requested to check the above problems and give clear opinions.
Reply: the reply is still being sorted out, and the company will complete the reply before January 27, 2022.
3. For fashion Fengxun and Beijing Shixin, please your company:
(1) Explain the specific process of goodwill impairment test for the two companies, including the selection of core parameters, relevant calculation basis and the recognition method of goodwill impairment loss, and the differences (if any) and rationality compared with the selection of relevant core parameters and calculation basis of goodwill impairment test in 2020;
(2) Explain whether your company has not made any provision for goodwill impairment for the above companies in 2020, whether it is cautious, reasonable and accurate, whether it complies with relevant provisions such as accounting standards for business enterprises, and whether it affects the nature of your company’s profit and loss in 2020.
The annual audit accountant is requested to check the above problems and give clear opinions.
Reply: the reply is still being sorted out, and the company will complete the reply before January 27, 2022.
4. About Yuanwang network, please your company:
(1) Explain the reasons why the performance forecast only discloses the business scale of the distant network without disclosing the relevant information about the realized profits, and whether there is any violation of articles 2.1.1 and 2.1.6 of the stock listing rules (revised in 2022);
(2) Explain the main financial data of Yuanwang network, such as expected operating revenue, net profit and net profit after deduction in 2021, and its change range compared with 2020, and explain the reasons and rationality of performance changes in combination with changes in industry environment and business development;
(3) Explain whether there is a significant decline in the net profit of Yuanwang network after the expiration of the performance commitment period (2018-2020). If so, please explain the reasons and rationality of the decline in the net profit due to the significant increase in the volume of transaction orders and sales Gmv, whether the goodwill formed by the acquisition of Yuanwang network should be impaired, and on this basis, explain whether there is profit adjustment and Accurate and up to standard performance;
(4) Explain the specific plan for the establishment of Yuanwang Innovation Research Institute, the reserves of funds, talents, technology, equipment and industry experience required, and the progress of preparation so far. On this basis, explain the relevance, necessity and rationality of the research on blockchain, AI intelligence, metauniverse, digital virtual human and Yuanwang network, Whether relevant research has been carried out and phased results have been formed, whether there are hot spots in the performance forecast, and if there are relevant risks, please timely and fully disclose the risk tips;
(5) Explain the prediction basis for the expected large growth of the business scale of Yuanwang network in 2022, the specific amount predicted, and the exact number or range of the growth range. On this basis, explain whether the performance forecast violates Article 2.1.5 of the stock listing rules (revised in 2022).
Ask the annual audit accountant to check the above questions (2) (3) (5) and give clear opinions.
reply:
The reply is still being sorted out, and the company will complete the reply before January 27, 2022.
5. With regard to the sale of footwear sales business and assets, please your company:
(1) Explain the integration and effect of relevant businesses with your company’s original main footwear industry after the acquisition of Internet advertising, Internet marketing and other assets in recent years, and the reasons for failing to give full play to the synergy effect (if applicable). Whether the actual situation is consistent with the relevant disclosure of your company’s early acquisition announcement. If it is inconsistent, explain the reasons and rationality, On this basis, explain whether the relevant disclosure of the early acquisition announcement is true, accurate and complete;
(2) Fully prompt the risks of asset light operation methods and related businesses such as brand management, supply chain services, Internet advertising and Internet marketing.
reply:
1、 Reply to question (1):
(I) business integration and effect of the company
Since 2015, the company has been committed to the strategy of “building a fashion IP ecosystem”, focusing on building “media and social platform”, “fashion IP incubation operation platform” and “fashion IP collection platform”, and transforming to a new retail platform.
In 2017, by acquiring the controlling rights of fashion Fengxun and Beijing Shixin, the company quickly entered the women’s fashion information media platform, obtained the traffic entrance, carried out omni-channel communication and interaction, enhanced user stickiness and accelerated the process of strategic upgrading on the basis of all-round influence and satisfaction of consumers.
In 2019, the company acquired its rich Internet traffic resources, efficient traffic resources integration and operation ability and precision marketing technology accumulated for many years by acquiring the controlling stake of Yuanwang network. Combined with the company’s solid fashion brand and supply chain foundation, the Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integrated sales platform covering the whole country and the increasingly mature media and social platforms, Accelerate the construction of “fashion IP ecosystem”, and accelerate the construction of a new retail platform that “takes users as the core, driven by data + content, and connected and integrated with consumption scenes”.
After years of transformation and development, the company’s fashion ecosystem and the construction of three platforms have achieved certain results. The company and its holding subsidiaries have established good cooperative relations with hundreds of well-known e-commerce brands in various categories in China, providing services for brands from the promotion of new products on the market and the improvement of sales volume to the clearance of inventory, Strive to provide the brand side or the brand operator with the marketing service of the whole life cycle of the product line. At present, the company has carried out in-depth cooperation with many well-known brands on the designated platform. At the same time, with the increasing enrichment of supply chain resources accumulated in the ecosystem, the supply chain resources of the company and its holding subsidiaries have covered many fields such as clothing, beauty, underwear, food and daily necessities. The conditions for diversified brand operation, management and output of the company are basically met.
In terms of online sales channel coordination, the company made full use of the technology accumulation and industry experience of the acquisition target in the field of Internet marketing to build a multi-channel online sales network such as e-commerce stores, wechat applets and social e-commerce, and combined the shoes and clothing business with online media promotion and traffic resource operation, Through the acquisition of the target’s rich operation experience in the field of social e-commerce, the company has actively expanded new sales models such as live broadcasting and goods, which has led to the continuous growth of the income of the company’s shoes and clothing business in online sales channels in recent years, forming a good synergy effect. In terms of offline sales channel coordination, the company relies on the experience and technology of the acquisition target in customer label identification and information processing, combined with the stock customer label information accumulated by the company’s shoes and clothing business for many years, makes an in-depth analysis of the consumption trend of the target population, and creates a “saturdaymode” brand collection store. In order to integrate the strategy of the brand collection store with the fashion IP ecosystem more effectively, the company will build the brand collection store into a fashion shopping environment with Wuxi Online Offline Communication Information Technology Co.Ltd(300959) sales integration, experience Interaction and purchase sharing integration, content production, communication and drainage integration, and the integration of private brands and cooperative brands. At present, the store has gradually introduced a full range of fashionable products such as shoes, bags and accessories, which are displayed in combination according to style and customer needs. At the same time, the store will regularly hold links such as online live broadcasting, theme activities and consumer interaction, which provides strong support for the adjustment of the company’s channel structure and business transformation and upgrading.
(II) reasons for failure to give full play to synergy
After the company acquired fashion Fengxun, Beijing Shixin and Yuanwang network, the company’s original footwear business and Internet marketing business have played a good synergy in Wuxi Online Offline Communication Information Technology Co.Ltd(300959) sales channel synergy and formed a good synergy. Combined with its own characteristics, the company focuses on the social e-commerce service business and plans to sell the business related to footwear sales, which is the need of the company’s development strategy and is conducive to enhancing the sustainable profitability of listed companies.
The company’s shoes and clothing business takes fashionable women’s shoes as the main products, and is equipped with a small amount of men’s shoes, bags and accessories. At present, the company has many private brands such as “St & SAT” ( Saturday Co.Ltd(002291) ), “D: fuse”, “SAFIYA”, “saturdaymode” and “fondberyl”. It has established a brand group with fashion as the core and diversified product categories, and subdivided the market according to the needs of consumers, To meet the demand of the target consumer group for fashion consumer goods.
The company’s women’s shoes products are positioned as medium and high-end fashion trend goods, and new products must be produced and launched into the market every quarter to maintain market share. Therefore, each footwear brand adds more SKUs every year. At the same time, in order to maintain the brand image of the company’s products, the company generally does not digest the inventory with radical low discount promotion in department stores and online channels, For products with long storage age, the company mainly sells at a discount through offline channels such as retail, wholesale and regular special sales.
Because the company has many categories of women’s shoes and in order to maintain the brand image of the company’s products, it is difficult for the company to quickly realize mass sales of shoes through Internet marketing and live delivery mode. At the same time, as the fierce impact of the new retail model has intensified in recent years and the repeated epidemic in some regions since 2020, the company’s footwear business income has decreased significantly and continued to suffer losses, which has brought great pressure on the company’s business performance. In order to further promote the company’s business strategy and finally focus on brand management In the transformation of “light” asset operation mode of supply chain management, the company focuses on social e-commerce service business in combination with its own characteristics, and plans to sell business related to footwear sales.
The company’s sale of footwear related businesses is in line with the company’s strategic planning, and will further optimize the company’s industrial structure and asset allocation, effectively reduce the company’s asset liability ratio, improve the company’s operating cash flow, further improve the operation quality and efficiency, enhance the company’s sustainable profitability, sustainable development ability and core competitiveness, and improve the return on investment of shareholders, Continue to create more value for shareholders.
(III) the actual situation of the company is consistent with the disclosure of the previous acquisition announcement
According to the report on Saturday Co.Ltd(002291) issuing shares and paying cash to purchase assets and raise supporting funds and related party transactions, the company acquired the controlling interest of Yuanwang network, mainly in view of the rapid development of Internet marketing industry, listed companies will continue to deepen the layout of Internet marketing industry and plan to acquire Internet marketing service providers with larger business scale, Build a more perfect Internet marketing business system and improve the sustainable profitability of listed companies. The main purposes of the transaction include (1) to further improve the Internet marketing business structure of listed companies. By integrating various high-quality and medium and long tail flow resources, it can provide advertisers with more diversified Internet marketing services and further improve the layout of the Internet marketing industry chain; (2) Give play to the business synergy between the listed company and the target company. The listed company can use the advantages of Yuanwang network in technology and channels to serve the existing fashion leather shoes business, reduce the marketing cost of fashion leather shoes business, effectively broaden the sales channels, improve the brand image of the listed company, and then improve the repurchase rate of customers; (3) Enhance the profitability of listed companies and enhance the value of listed companies. After the completion of this transaction, Yuanwang network will become the holding subsidiary of listed companies. After the completion of this acquisition, the listed companies are expected to further improve their business scale and profitability, so as to maximize the interests of shareholders of listed companies.
According to the above situation and effect of the company’s business integration in recent years, at present, the company has basically realized the purpose of the original M & a transaction. The company’s acquisition of the controlling rights of fashion Fengxun, Beijing Shixin and Yuanwang network, and the recent plan to sell the business related to footwear sales are based on the needs of the company’s strategic transformation and dynamic adjustment according to the changes of market conditions, Gradually build a “fashion IP ecosystem” and transform to a new retail platform. The actual situation of the company is consistent with the disclosure of the previous acquisition announcement, and the disclosure of the previous acquisition announcement is true, accurate and complete.
2、 Reply to question (2):
The company has transformed to the “light” asset operation mode of brand management and supply chain management, concentrated resources to promote the development of mobile internet marketing business, focused on social e-commerce service business in combination with its own characteristics, and may face the following risks in the process of enterprise operation and business development:
(I) risk of improper brand management
Since its establishment, the company has focused on the operation of footwear brands and has passed the long-term
