Jia Nailiang's shining cover cannot hide the company's losses.

"Investor Network" Jordan.

Recently, Foshan Yowant Technology (002291.SZ) announced externally that the previously adjusted investment projects will be delayed again, and two new companies with a registered capital of only 0.01 million yuan each will be added as the implementing entities for these projects.

A series of measures undoubtedly stirred up waves in the market, triggering doubts from many investors and industry professionals about its operational capabilities and project execution efficiency.

From an operational perspective, Foshan Yowant Technology is still in a loss-making situation and has not yet escaped the predicament. Although the company has achieved certain results in the live streaming e-commerce sector, and its anchors have considerable influence, the overall financial situation has not improved as a result.

Further Delay of Investment Projects

An announcement released by Foshan Yowant Technology reveals that the company has approved the 'Partial Investment Project Delay Plan,' deciding to postpone the expected completion dates of the 'YOWANT Digital Marketing Cloud Platform Construction Project' and the 'Innovation Technology Research Institute Construction Project' from the previously adjusted September 2024 to a new set usable status date of December 31, 2025.

The two projects mentioned above were initially proposed as additional issuance projects in 2021 with a total investment amount of 1.454 billion yuan, planning to use 1.291 billion yuan of the raised funds. The initial target for usability was set for September 2023. The performance report for the first half of 2024 showed investment progress of 36.2% and 28.19% for these two projects. One year has passed since the initial usability target, and the construction progress has not yet reached halfway.

On the same day, Foshan Yowant Technology also announced the addition of Hangzhou Xunxi Network Technology Co., Ltd. (referred to as 'Hangzhou Xunxi') and Hangzhou Lingliang Network Technology Co., Ltd. (referred to as 'Hangzhou Lingliang') as one of the implementers of the two projects, and plans to use the raised funds to provide loans to these two companies to advance the implementation of the fundraising projects.

It is worth noting that both of these subsidiaries were established on July 8, 2024, with a registered capital of 0.01 million yuan each, and are wholly owned by Hangzhou Shien Asset Management Co., Ltd. (referred to as 'Hangzhou Shien'), which is a wholly-owned subsidiary of Foshan Yowant Technology's controlling subsidiary, Hangzhou Yowant Network Technology Co., Ltd. (referred to as 'Yowant Network').

According to the announcement of Foshan Yowant Technology, Yowant Network and Hangzhou Shien were originally key executors of the aforementioned fundraising project, but the project completion date has been repeatedly delayed. As early as August 2022, Foshan Yowant Technology decided in a meeting to no longer directly provide loans from the raised funds to Yowant Network and Hangzhou Shien to implement the fundraising project, but chose to convert the original loan receivables (principal) and bank deposit interest income into capital increases for Yowant Network, with Yowant Network then increasing capital for Hangzhou Shien for project implementation.

This series of operations has raised concerns from the public, especially regarding whether companies with a registered capital of only 0.01 million yuan can effectively bear the operational capacity of projects worth tens of billions. Foshan Yowant Technology's plan to provide loans to the newly established Hangzhou Xunxi and Hangzhou Lingliang has also led to speculation in the market about whether it is still indirectly providing financial support to Hangzhou Shien by increasing the subsidiary level.

Still struggling to get out of the loss quagmire.

Foshan Yowant Technology, formerly known as Saturday, is a long-standing high-end footwear manufacturer and was the first listed company in the footwear sector of the A-share market. However, with the decline of the footwear business, the company later transformed into an MCN institution, a transformation that stood out among many old footwear enterprises.

After the transformation, Foshan Yowant Technology shone in the live streaming field, with its contracted anchor Jia Nailiang firmly seated as the 'top seller' on Douyin. According to Feigua data statistics, in the first half of this year, Jia Nailiang occupied the top position on the Douyin sales chart multiple times. During the 618 sales promotion period, Jia Nailiang surpassed his counterparts HUITONGxing and Little Yang Brother to become the new 'top seller' on the Douyin platform. In just the first live stream of 618, Jia Nailiang's live stream achieved excellent sales of 450 million yuan. Recently, on the daily live streaming sales chart on September 25th, Jia Nailiang once again won the championship with sales exceeding 510 million.

Despite the decent performance in the live streaming business, Foshan Yowant Technology still faces a serious loss issue. From 2021 to 2023, the company's cumulative losses exceeded 2 billion yuan. In the first half of this year, although the company's revenue increased by 31.56% year-on-year, reaching 2.978 billion yuan, the net income remained in a loss state, decreasing by 5.2% year-on-year, with a loss of 0.219 billion yuan.

It is not difficult to find from the financial data of foshan yowant technology that the main reason for the losses is the company's provision for a large amount of asset impairment and the increase in period expenses. From 2021 to 2023, the company's provision for credit impairments and asset impairment losses totaled 1.32 billion yuan. In the first half of this year, the company's asset impairment losses and credit impairment losses increased by 136% and 219% respectively compared to the previous year, negatively impacting net income.

In terms of expenses, since 2021, management expenses have become the largest proportion of expenses. In the first half of this year, management expenses increased by 33.56% compared to the previous year, reaching 0.29 billion yuan. This is mainly due to the launch of the country's first online and offline 24-hour business complex X27 PARK by the company, leading to a significant increase in depreciation, amortization expenses, property expenses, etc.

Faced with the worsening losses in its main business, foshan yowant technology has decided to enter the instant retail market and plans to implement the X27 MINI front warehouse project. However, this plan has been questioned by investors. Some investors on the interactive platform suggest that the company carefully assess its offline operational capabilities and inquire whether the newly added instant retail business has undergone complete business validation, as well as whether the company has an operational team capable of handling this business.

In the instant retail industry, platforms such as Meituan Flash Purchase, Ele.me, and jd.com have a large user base, strong brand awareness, and extensive delivery networks, firmly occupying the vast majority of the market share. For latecomers like foshan yowant technology trying to enter this field, they face the high walls and intense market competition built by giants. This is undoubtedly a challenging path full of thorns, where foshan yowant technology faces severe tests from strategy to strength. (Produced by Simei finance and economics)■