The mystery of "China's SaaS Going to the United States" plummeted

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Since the beginning of this year, the "XX first shares" in the US capital market seem to be collectively approaching the red line of the delisting.

"Fresh E -commerce First Share" Daily Outstanding Fresh received Nasdaq's delisting warning twice in May and June this year, because the reasons for failing to submit the 2021 annual report and the company's stock price have been 30 consecutive consecutive consecutive consecutiveth. The trading day is less than $ 1.

The "first share of Internet medical beauty" new oxygen has received privatization invitations in November 2021, but there has been no progress since then. Under the continuous supervision of the policy on the medical beauty market, the new oxygen stock price has been below $ 1/share for two consecutive months.

In addition, with the "China SaaS's first share in the United States", there is Ronglianyun Communication (hereinafter referred to as "Ronglianyun", which is blessed by well -known investment institutions such as Sequoia Capital, Zhixin Capital, and Lanto Capital. ) Development is not optimistic.

In February 2021, Ronglianyun successfully listed on the New York Stock Exchange. The stock price closed at $ 48 per share on the first day of listing, up 200%, and the total market value reached 7.9 billion US dollars (about 5.6 billion yuan). The increase in the market exceeded 260%, and the market value of up to $ 9 billion.

Unfortunately, the good times did not last long. Since then, the company's stock price has plummeted. From May this year, Rong Lianyun's stock price has maintained around $ 1/share. It is also true that the outside world also joked that Rong Lianyun was "melting clouds."

Picture source: Oriental Wealth

In May this year, Rong Lianyun was warned for failing to submit an annual report to the New York Stock Exchange on time. In June, because the ADS transaction price was below the compliance standard, it was warned by the New York Stock Exchange again.

So, what is wrong with the development of Rong Lianyun?

Multi -problem to be solved

Sun Changxun, the founder and CEO of Rong Lianyun, graduated from the Department of Mathematics of the University of Science and Technology of China in 1998. He went to Tsinghua University to study MBA in 1998. He first worked at a company called Gaoyang San Siyuan. In 2006, he became the vice president of the company and was responsible for the company's IMS fusion communication products, video products, games and other mobile Internet products.

After several entrepreneurial failures, it finally determined its own entrepreneurial direction -providing a fusion communication solution, claiming to "make communication technology the cornerstone of your application." Ronglianyun, which was established in 2013, is also the earliest domestic manufacturer in the field of rooting cloud communications.

The cloud communication here refers to packing the communication capabilities into API interfaces and SDKs, and selling them to companies to reduce their use threshold. Simply put, the participants mainly do the resale business. For example, the SMS verification code received by our daily life, and the virtual phone calls dial on the third -party software are all realized through this service.

According to data from the Foresight Industry Research Institute, the market size of the global Internet communication cloud will increase from US $ 570 million in 2015 to US $ 1.61 billion in 2018.

The huge market size, coupled with earlier entry, at that time, Rong Lianyun was a complete "hit" capital aesthetics. Data show that in the years after the establishment of Rong Lianyun, almost every year can get financing from investment institutions.

Picture source: Ronglianyun's official website sorting out

However, although there is a promotion of capital, Rong Lianyun's development is not as high as other companies, but it has always been at a tepid stage.

In 2020, the new crown epidemic has given many companies' urge to "Shangyun", as well as the improvement of the demand for communication clouds such as private domain traffic, retail customer service, e -commerce live broadcast, game and short videos. Pay attention to.

In this context, Rong Lianyun has continuously enriched his product line through self -research or external acquisition. For example, in 2021, Ronglianyun acquired the CRM brand to cross river soldiers. According to Sun Changxun, the founder and CEO of Rong Lianyun, through the expansion of the CRM business, it can provide customers with a complete service closed-loop of communication-customer acquisition-customer-staying-to improve satisfaction. At present, the business of Ronglian Industry mainly includes AI+Communication, CC+UC+PaaS business, and IoT logistics business.

Picture source: Ronglianyun's official website sorting out

But there are many problems in front of Ronglianyun. On the one hand, due to the (SMS, verification code) business needs to purchase communication resources such as text messages from telecommunications operators, this business lacks bargaining power on operators, and has the characteristics of high operating costs, low entry thresholds, and low gross profit margin.

In fiscal 2018-2020, Rong Lianyun's telecommunications resources costs were 231 million yuan, 293 million yuan, and 329 million yuan, respectively, and the income costs accounted for 73.7%, 76.4%, and 71.4%, respectively. But the gross profit margin maintained at about 30%for a long time. Therefore, this business has also been voiced by many investors as "the business".

On the other hand, the problem of long -term losses and unsolid profitability continues to exist. In fact, Rong Lianyun's financial performance is not a case. Because the SaaS industry has high early investment costs, the middle and late stages must rely on a large number of customers and continuous repurchase to form a scale effect and share operating costs.

But the question is that when Rong Lianyun has not figured out how to improve the profit -making strategy in the future, the subsidiary Rong Lian Qimo at the 3.15 party this year was suspected of collecting user privacy, buying and selling users' big data, assisting in responding to user complaints for complaints of user complaints. The issues are criticized.

According to Ronglian Qimo business manager, there are more than 30,000 customers on their platform, some of which are engaged in harassing telephone business called "unfamiliar visit". Systems and lines. Photo source: central video

At the same time, Ronglian Qimo can also provide a number pool to the company that dials the harassment phone. Each time the harassment call is called, different numbers will be displayed on the user's mobile phone. This technology can be used to avoid user complaints and communication department supervision. Although Ronglian Qimo had apologized to the matter and pointed out that the company would strengthen supervision in the future. But this also exposed Rong Lianyun's losses in the company's management process at a certain level.

Sun Changxun once pointed out that Rong Lianyun will become the Chinese version of "Twilio" in the future. However, it is worth noting that as of August 26 this year, Twilio's total market value has exceeded US $ 13.131 billion, and the company's stock price is about 72 times that of Rong Lianyun, reaching $ 72.34 per share.

Ronglianyun VSTWILIO

It should be clear that although Rong Lianyun and Twilio are in the midstream of the Internet cloud communication industry chain, Rong Lianyun is IM+RTC (instant messaging+real -time audio and video), while Twilio is IM PaaS. However, the development of Twilio still has a lot of reference to Rong Lianyun.

Picture source: Iri Consultation Research Institute

For example, during the development of Twilio, there have been problems that excessive dependence on big customers. In the early days of the company, the total revenue ratio of Uber and WhatsApp exceeded 20%, but in 2017, due to Uber's reduction of procurement, this also directly caused the company's stock price to fluctuate significantly.

In the following years, Twilio has been focusing on improving this situation.

With the continuous rise of customers, Twilio's dependence on single customers has gradually decreased. For example, by the third quarter of 2020, the number of Twilio customers reached 208,000, and the increase rate continued to stabilize at about 130%. As of the Q3 financial report data of 2020, the company's top ten customers' revenue accounted for 14%, and the risk of a single customer has basically been eliminated.

Compared to Twilio, Rong Lianyun is still overly dependent on big customers. At present, Ronglianyun's customers are mainly: TOB+TOG, covering eight industries including finance, manufacturing, education, energy, and Internet. According to Ronglianyun's prospectus, 1.4%of large customers account for 78%of the company's total revenue.

Picture source: Ronglianyun's official website sorting out

If Ronglianyun cannot improve this situation in the future, it may impact the company's multi -faceted development. On the one hand, in order to prevent large customers from losing loss and ensure the continuous renewal of large customers, the company can only form an advantage through prices. In this way, the upstream communications and downstream customers lacked bargaining ability. Rong Lianyun, who is in the "splint layer", can only earn a meager profit.

Judging from Ronglianyun's financial report, although the retain rate of net customer company based on the US dollar is increased from 86.8%in fiscal 2020 to 95.9%in the third quarter of 2021, this retention rate is still full of uncertain factors.

Take Ronglianyun's customer Ali as an example. In April 2014, Ronglianyun and Ali Ju Wireless officially cooperated to provide Alibaba Cloud's developers with communication capabilities and related technical support, and support developers through a series of activities to support developers Essence But as Ali gradually deployed the cloud communications market, Rong Lianyun's foreign introduction has not seen Ali's name.

In addition, with the continuous promotion of the "dual reduction" policy, Educational customers under Ronglianyun will inevitably significantly reduce investment in this area.

On the other hand, due to the complex business scenarios of large customers, companies are more oriented to purchase customized products. And these products generally have the characteristics of long product research and development cycle and long delivery cycle, which also determines that Rong Lianyun's signing of contracts from large customers to the final full repayment cycle is stretched.

According to Sun Changxun, affected by the epidemic, the company's repayment cycle of the company has been extended from 90 days to 150 days, which will inevitably increase the company's cash flow risk.

If there is no sufficient cash flow guarantee, it is difficult for enterprises to invest in new funds to continue their customers, and eventually form a vicious circle.

Picture source: Futu Securities

It is worth noting that the current foreign ZOOM, Google, Tencent, Huawei and other giants in China have become more and more frequent in the field of cloud communication in the past two years, and the entire market has entered the stage of fierce competition.

On November 14, 2021, Tencent released the "Tencent Cloud Vision Cube" engine to provide a fast live solution, which can achieve a minimum delay of 800 milliseconds. In terms of clarity, the "Tencent Bright Eye Speed ​​HD Solution" can increase the clarity of more than 30%at the same code rate. Under the condition of the same clarity, the broadband consumption can be reduced by 45%.

Alibaba Cloud successfully constructed a global real -time transmission network, which can minimize the delay of the end -to -end end -to -end end -to -end.

If these large factories start to "grab customers" with their traffic advantages and technical accumulation, it will inevitably have an impact on Rong Lianyun. In fact, not only the price of Internet factories and Rong Lianyun are not only prices, but also the systemic output capacity of large factories. For example, although Ali's hungry is currently cooperating with Rong Lianyun, when the services provided by Ali Cloud are more convenient, there is a high probability that it will choose to invest in Ali's arms. As for many companies in Tencent's capital investment, when choosing cloud service providers, they may also fall in love with Tencent Cloud. The direct problem brought by the intensified market competition is to increase the customer acquisition cost of Rong Lianyun. For example, the company's sales and marketing costs increased from 58.1 million yuan in the third quarter of 2020 to 82.6 million yuan in the third quarter of 2021, an increase of 42.3 %.

Summarize

For the current Rong Lianyun, it can be described as internal and external problems.

On the one hand, the competition in the communication cloud market is gradually intensifying, and the company itself is highly dependent on large customers, which put forward higher requirements for the company's cash flow and corporate customer acquisition capabilities.

On the other hand, Ronglianyun's other businesses have not yet made efforts, and the position of CPAAS business companies is still embarrassing, lack of pricing power, and the gross profit margin is too low. Perhaps under the crisis, Rong Lianyun urgently needed to settle down and build his own moat.

*This article is based on public information, which is only used as information exchange, and does not constitute any investment suggestions

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