Do KOL marketing?Yuepu Group IPO: The gross profit margin fell in a row, and the operating net cash flow continued to be negative

During the reporting period, Yuepu Group's operating net cash flow continued to fail, and the profitability also fluctuated significantly.

"Investment Times" researcher Zhuo Yi

Traditional advertisements are subject to the direct and obvious characteristics of its communication channels, and the influence of consumers has gradually weakened. KOL marketing has gradually developed as a more intensive marketing approach, which is an emerging marketing method in recent years.

KOL is defined as a key opinion leader, refers to having more and more accurate product information, accepting or trusting for related groups, and has a greater influence of the behavior of the group's behavior, such as celebrities, celebrities, platforms Large V, Internet celebrities, domains, etc.

The so -called KOL marketing refers to the marketing model that uses the KOL and its production content in the social media platform to carry out social marketing activities on the new media platform. With KOL as the main body, it is accurately conveyed to its fans in the field of KOL's specialty. The characteristics or selling points of the product or service make the brand more effective and more targeted to establish a connection relationship with consumers.

Shanghai Yuepu Advertising Group Co., Ltd. (hereinafter referred to as Yuepu Group) is a comprehensive advertising company with social media marketing as its core. Recently, the company submitted the application for the first public offering of the stock market prospects, and planned to pierce the motherboard of Shanghai City. This time it is planned to disclose that the RMB ordinary shares are not more than 40 million shares, and the planned funds are planned to be raised. Invest in the new media marketing agency system upgrade project, brand full -scale creative center construction project and supplementary funds.

"Investment Times" researcher noticed that this is not the first financing of Yuepu Group. In 2019, the company announced that it has received a strategic financing of $ 25 million. 200 million yuan financing.

Despite several rounds of financing, Yuepu Group's net cash flow has always been negative in recent years. In this IPO, Yuepu Group will use 381 million yuan of raised funds to supplement cash flow. In addition, the company's 90 % of the revenue is an advertising agency business, and the gross profit margin is lower than the peer level, and the profitability of profitability has also fluctuated significantly.

Profitable

Researchers in "Investment Times" reviewed the prospectus and found that in 2019, 2020 and 2021 (hereinafter referred to as the reporting period), the operating income of Yuepu Group was 503 million yuan, 705 million yuan and 1456 million yuan, respectively, 2020 and 2021. The year -on -year growth rates were 40.12%and 106.47%, respectively, and the revenue in 2021 doubled.

However, during the same period, the company's net profit changed significantly, reaching 36.97 million yuan, 31.29 million yuan, and 120 million yuan, respectively. In 2020, it fell 15.36%year -on -year, and the growth rate in 2021 reached 284.03%. Under this situation, whether Yuepu Group can achieve a high growth as in 2021, it is necessary to make a question mark.

In addition, the gross profit margin of Yuepu Group's main business has also declined. During the reporting period, the company's main business comprehensive gross profit margin was 21.85%, 18.61%, and 17.79%, respectively, and continued to be lower than the average level of 22.77%, 21.58%, and 21.62%comparable to companies in the same industry. Yuepu Group explained in the prospectus that in 2020 and 2021, the impact of the increase in sales of large customers with a strong bargaining capacity and low gross profit margin in 2020 and 2021, the gross profit margin has decreased slightly.

In fact, the gross profit of Yuepu Group mainly comes from the difference in the procurement and sales of media resources in the main business cost. The size of the difference is comprehensively affected by various factors, such as the company's professional service capabilities, bargaining capabilities, cooperative relationships with customers and media resources and continuous cooperation expectations, the scale of media purchase, and market competition. It can be seen that the Yuepu Group's profitability is weak, there are obvious fluctuations, and the bargaining ability is weak.

In response to the aforementioned situation, the relevant person in charge of Yuepu Group told the Investment Times researcher that from 2019 to 2021, the company's revenue growth mainly comes from the development of new customers and the increase in sales of existing customers. In 2021, L'Oreal (China) Co., Ltd. and Huayang Lianzhong Digital Technology Co., Ltd. newly became the top five customers in the company; at the same time, the sales of Alibaba Group, byte beating group, and OPPO Guangdong Mobile Communications Co., Ltd. among the top five customers. Averaged significantly increased in 2020.

At present, the company's current operating conditions are good, and the company's new media advertising marketing market has a good development trend. It is expected that in the next few years, the scale of my country's new media advertising marketing market will continue to grow steadily. By 2023, the overall release scale is expected to be close to 10 trillion yuan.

The changes in gross profit margin during the reporting period of the comparison company in the same industry and the same industry

Data source: company prospectus

90 % of the income depends on the advertising agency business

The prospectus shows that the main business of Yuepu Group includes social media advertising agency, social media integrated marketing and social media operation services.

The agent of social media advertising refers to the purchase of media marketing resources according to customer needs, and the advertising release is completed according to customer requirements. Social media integrated marketing compared to purely purchasing corresponding media resources, and also provides customers with a package of social media marketing activities such as marketing solutions and creative communication support. Social media operational services specifically refer to providing continuous content, events and event marketing planning for customer brands according to customer needs, enhance customer brand awareness, and maintain brand image. Yuepu Group claims that it is a comprehensive advertising company with social media marketing as the core, but during the reporting period, 90 % of its operating income stems from social media advertising agents. It can be said that the company is essentially an advertising agency.

According to each business gross profit margin during the reporting period of Yuepu Group, the researcher of the Investment Times found that the gross profit margin of its social media advertising for agency business is only about half of the integrated marketing of social media, and it is not as good as social media operation services. One -third of the profit is weak.

In this regard, the relevant person in charge of Yuepu Group said that the rich and extensive social media platform resources are an important part of the company's development of daily business and the embodiment of competitiveness. Through in -depth cooperation with mainstream social media platforms, the company has accumulated a large number of media resources covering Weibo, WeChat, Douyin, Xiaohongshu, B Station, Kuaishou, etc., while meeting the marketing demand of the entire platform of the advertisers The content marketing ecosystem is jointly constructed with social media platforms. The company and social media platforms have built partnerships based on common interests and goals. It is a rare marketing service provider that can achieve the full coverage of mainstream social media platforms and reached in -depth cooperation with many of them.

In the integrated marketing business of social media advertising and integrated social media, the company negotiates with customers and suppliers to pricing, and has made profitability through sales revenue and procurement cost differences. The quotation of different customers depends mainly on various factors such as the category and service content of the media resources purchased by the customer, the customer's price tolerance and the degree of competition. Therefore, in the integrated marketing business of social media advertising and integrated marketing business, the gross profit margin between different customers and the same customer has a certain fluctuations in the industry, which is in line with the characteristics of the industry.

In addition, Yuepu Group attaches more importance to marketing construction, relying on marketing to obtain a large number of advertising agency business orders.

From the perspective of employee structure, the proportion of sales staff in 2021 reached 73.91%, and the company's main employees were almost composed of sales staff, and the R & D expenses during the reporting period were 10.87 million yuan, 12.04 million yuan, and 17.43 million yuan, accounting for accounting The proportion of operating income is 2.16%, 1.70%, and 1.20%, respectively, decreased year by year and has been lower than the average level of the same industry, and the research and development cost rate is low. In this raised fund, it also applied 255 million yuan to upgrading projects for the new media marketing agency system, continued to help marketing, and took out 114 million yuan to invest in the full -scale creative center construction project of the brand to improve the company's creative capacity level.

Yuepu Group's main product gross profit margin situation

Data source: company prospectus

Eat the cash flow?

According to the prospectus, the balance of receivables at the end of each period of Yuepu Group's reporting period was 227 million yuan, 349 million yuan, and 667 million yuan, respectively. %And 45.80%show that nearly half of the revenue cannot be included in cash and always maintains a high proportion. If Yuepu Group's receipt measures are not effective, or customers are affected by the macro environment or their own operations, they cannot pay some or all accounts receivables in a timely manner, which will have a adverse effect on the company's operating performance.

The significant increase in receivables also adversely affect the net cash flow of Yuepu Group's operating activities. During the reporting period, the company's net cash flow generated by the company's operating activities was -13.65 million yuan, -124 million yuan, and -164 million yuan, respectively, which was different from net profit.

In this regard, Yuepu Group explained in the prospectus that the company generally places an order through social media advertising trading platforms in the business. In addition to a small number of platforms to give a certain accounting period, the current payment model is mostly adopted. At the same time, the company gives customers a credit period based on industry practices. Therefore, the company generally gives customers a credit period longer than the credit period obtained from suppliers. The time difference between upstream and downstream funds settlement has led the company's net cash flow to continue to be negative.

In addition, Yuepu Group still has a large number of borrowings and guarantee contracts. As of December 31, 2021, its short -term borrowing amount reached 129 million yuan, and the balance of cash and cash equivalents was only 40.52 million yuan. Risk of stress and operating funds. As the cash flow was tight, Yuepu Group also replenished the cash flow of 381 million yuan in the raised funds.

In response to relevant issues, the relevant person in charge of Yuepu Group told the Investment Times researcher that Yuepu advertising is an important link between advertisers, advertising agents and media resources in the social media release industry. Waiting for multiple competitive advantages.

From 2019 to 2021, the company's account receivables are basically within one year. The company's customer has good credit qualifications, and no bad debt is sold during the reporting period.

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