Photo source: Visual China Blue Whale Financial Reporter Shao Yuting
On May 20, Hong Kong Stock Exchange showed that Quantifier Technology Co., Ltd. (hereinafter referred to as Quantifier) resubmitted its listing application, with CICC and CITIC Securities as its joint sponsors.
At the beginning of its establishment, Quantifier started with the loan application "Credit Wallet". Now the loan platform has been changed to an e-commerce platform, and the company has transformed into a "digital solution provider", providing "precision marketing services" for financial institutions and merchants. Business standardization has always been a concern. Has Quantifier, who has ventured into the capital market, prepared a new story?
New story? Transformation of lending platform into e-commerce
In January 2014, Zhou Hao set up Liangkebang Group, which is mainly engaged in consumer loan related businesses. In November of the same year, Liangkebang Group incubated the predecessor of Quantifier, "Quantum Digital Science", focusing on precision marketing business.
At that time, the loan platform "Credit Wallet" of Liangkebang Group was once a well-known cash loan supermarket in the industry, and the loan volume was at the top of the industry. The application connects with financial institutions, lending enterprises and individual users. The company, as an intermediary service provider, earns profits by charging fees for pricing risks, post loan services, etc.
As the supervision of the cash loan industry became stricter, the company gradually transformed into a "digital solution provider". According to the prospectus, today's Quantifier is a Chinese digital solution provider. Its main business is divided into two segments: digital marketing and commodity transaction enabling. It has applications such as "Sheep bleating" and "Consumption Map".
Digital marketing includes precision marketing, that is, to provide business display, consumer loan matching and advertising for cooperative financial institutions and local merchants. Commodity transaction enabling mainly refers to marketing of commodities directly traded on quantified self owned applications for business partners.
In November 2020, Quantifier officially changed the "credit wallet" to "sheep small baa". The app download page shows that the app is a one-stop living consumption service platform, providing users with staged shopping services. The page layout of the app is similar to common e-commerce platforms, selling 3C digital, food and beverage, cosmetics and skin care and other goods. The products are from Quantifier's business partners.
Although the lending platform "Credit Wallet" has been changed to the e-commerce platform "Yangxiaobaa", the application still has financial lending related services.
On the home page of "Yangxiaobaa", we can see the opening windows of "enjoy flower card" and petty cash which provide the service of "enjoy first and pay later". Among them, "enjoy flower card" is jointly operated by Tianjin Zimujinke Technology Co., Ltd. and Yingtan Xinjiang Guangda Micro Loan Co., Ltd., Xinjiang Guangda is wholly owned by Liangkebang Group, and Zimujinke is 40% owned by Xinjiang Guangda.
Quantifier said that the company currently provides two loan functions, namely, flower sharing card and petty cash, on "Yangxiaobaa". The flower sharing card is only used for the user to purchase the retail goods provided by the business partner on "Yangxiaobaa". After the user uses the flower sharing card to initiate the application for purchasing the goods, the financial institution will pay the price for the goods. From 2021 to 2023, the average amount of flower cards provided by financial institutions will be 887.9 yuan, 1161.1 yuan and 1268.8 yuan. The petty cash is available to consumers on the company's applications and websites, and the amount of each petty cash is between 100 yuan and 50000 yuan.
Quantifier generally does not charge service fees from financial institutions for precision marketing related to flower sharing cards, except for "Yingtan Guangda", a financial institution engaged in consumer loan business, for which the company charged a service fee of 2.0%. In addition, in terms of petty cash service, before 2023, the company charged a rate of 3.6% to 3.7% from Yingtan Guangda. In 2023, it will no longer provide precision marketing services to Yingtan Guangda through the petty cash function.
From 2021 to 2023, the total amount of service fees paid by Yingtan Guangda Vectorization is 8.445 million yuan, 9.358 million yuan and 14.161 million yuan respectively. However, in 2022, the Company will extend the credit period of Yingtan Guangda to six months, resulting in an increase in accounts receivable. During the reporting period, the net accounts receivable of quantitative distribution will be 151 million yuan, 258 million yuan and 443 million yuan respectively.
It is reported that Yingtan Guangda is one of the top five customers of Quantifier. Its parent company is Quantifier Kebang Group. Zhou Hao, the founder of Quantifier, holds 39.18% shares of Quantifier Kebang.
As of the last practical date, Zhou Hao, the founder and executive director of the company, held 31.54% of the total issued share capital indirectly through Mars Legend, and was entitled to exercise 45.21% of the voting rights of the company.
Difficult transformation, loss of key customers and start of new business
With the heavy blow of supervision, the revenue structure and revenue scale of the quantifiers have changed accordingly.
In January 2022, the Credit Information Measures officially came into force, and the quantification party made major adjustments to its business, resulting in a sharp decrease in the digital marketing volume of financial institution customers. The number of financial institutions cooperating with the quantification group also declined from 30 in 2021 to 6 in 2022. The income from financial institutions dropped from 270 million yuan in 2021 to 56.1 million yuan in 2022, and the performance of the year also changed from profit to loss.
From 2021 to 2023, the revenue from quantitative distribution will be 351 million yuan, 475 million yuan and 530 million yuan respectively; The annual profit was 54 million yuan, - 283000 yuan and 3.64 million yuan respectively. The gross profit rate in the same period was 75.9%, 65.8% and 69.4% respectively.
Before the new regulations came into effect, Quantifier only provided precision marketing services for financial institutions, which accounted for 76.8% of the revenue in 2021. Among them, from 2019 to 2021, the top five quantifiable customers are financial guarantee, financial technology, consumer loans and other financial companies, with the income from the top five customers accounting for 94.2%, 93.5% and 74.0% respectively.
After the release of the new regulations, in 2022, the company began to provide precision marketing services for local merchants. In 2022, the main customers of the quantifier will become automobile sales companies, and the revenue from automobile sales companies will account for 34% of the total revenue, while the revenue from financial institutions will plummet to 11.8%.
In 2023, the proportion of quantified income from financial institutions will be 20.2%, and that from auto merchants will be 34.4%. The proportion of revenue from the top five customers is also declining. From 2022 to 2023, the proportion of revenue from the top five customers is 19.2% and 21.0% respectively, and the proportion of revenue from the largest customers is 7.0% and 5.2%.
Although at present, digital marketing business is still the core of quantitative business, its market share is not dominant. According to Frost Sullivan, in 2023, by revenue, Quantifier ranked seventh among digital solution providers for Chinese scenarios (proprietary applications or websites of the provider itself or its corporate customers), accounting for 0.5% of the market share. Compared with 2022, the company's market share still declined.
With the reduction of financial business, the focus of quantitative business has gradually shifted to commodity transaction enabling business. From 2021 to 2023, the revenue of digital marketing business will account for 76.8%, 56.5% and 62.2% respectively, and the revenue of commodity transaction enabling business will account for 23.2%, 43.5% and 37.8% respectively.
In addition to "Yang Xiaobaa", in 2022, Quantifier also launched the small program "Consumption Map", which was introduced as a collection of proprietary local consumption applications to enable the transaction of local merchants' goods and services, such as issuing consumption vouchers, subsidies, merchants' welfare and other activities, and charging local merchants with certain technical service fees.
In this IPO, Quantification intends to use the raised funds to improve research and development capabilities, improve the technical infrastructure enabling digital marketing and commodity trading, and build new and expand existing local consumer applications.
By the end of 2023, the amount of cash and cash equivalents held in quantitative distribution was 111 million yuan, and the amount of bank and other borrowings was 23 million yuan.
After transformation, business compliance is still concerned
This is a quantitative four time submission to seek listing. In 2017, the company had submitted listing application documents in the form of confidentiality to the U.S. Securities Regulatory Commission. In June 2022, the company transferred to the Hong Kong Stock Exchange to submit the prospectus, which became invalid after the six-month hearing period. After the submission of the form again in February 2023, the company received regulatory attention due to the standardized operation of loan assistance business, and finally became invalid.
In 2023, after the quantitative delivery form, the CSRC will require it to explain whether the loan assistance business belongs to the category of financial activities, whether it involves personal credit service, and whether it complies with national laws and regulations; "Yangxiaobaa" and other platforms have a large number of reasons for user complaints, as well as quantitative dispatch involving administrative penalties, and whether there are major violations of laws and regulations and other business compliance issues.
In the newly submitted prospectus, Quantifier said that the company provides precision marketing services for financial institutions on "Yangxiaobaa" and introduces potential borrowers to them through the H5 portal.
The reporter noticed that the "card package" page of the "Yangxiaobaa" platform has words such as "easy borrowing" and "maximum consumption limit". When opening, users need to check and agree to authorization agreements such as the Comprehensive Authorization for Personal Information Inquiry and Use (Credit Authorization).
In September 2021, the People's Bank of China promulgated the Credit Investigation Measures, which stipulates that financial institutions shall not conduct commercial cooperation with market institutions without legal credit investigation qualifications to obtain credit investigation services. Therefore, quantitative dispatch to financial institution customers requires to update relevant technical settings and modify relevant agreements with existing customers.
In this regard, Quantifier said in the prospectus that after the release of the new regulations of the Credit Reporting Measures in January 2022, the company will require financial institution customers to update the relevant technical settings. The company has not participated in the collection of personal credit information by financial institution customers, and the company's financial institution customers are responsible for any personal information collected from the end customers. Such personal information will not flow through Quantifier, Therefore, the company did not participate in the collection of personal credit information by financial institution customers and did not engage in credit investigation business.
Quantifier said that the "precision marketing services" provided to financial institutions are different from loan assistance services. Since the company does not act as a guarantor, it will not take risks when providing pure flow recommendation services. Lanjing Finance and Economics noted that in December 2020, after the "credit wallet" was changed to "sheep small baa", Quantified sent a price of 4 million yuan to sell the rights and interests of the subsidiary Fujian Xiapu Zhongying Financing Guarantee Co., Ltd. to an independent third party.
With regard to the complaints on the "Yangxiaobaa" platform, Quantifier said in the prospectus that "Yangxiaobaa" was mentioned on the public complaints forum and was accused of improper debt collection, refusal of return and refund, wrong address and other acts. Most of the allegations related to the public complaints are related to the commercial services Yangxiaobaa received. According to the confirmation of Chinese legal counsel, These allegations do not involve potential violations of Chinese laws and regulations.
From the beginning of 2019 to the end of 2020, quantitative dispatching entrusted a third-party debt collection institution to collect outstanding loans from relevant customers, and signed an agreement with financial institutions and debt collection institutions explicitly prohibiting improper debt collection. Quantifiers said that the allegations against third-party debt collection agencies were untrue and inaccurate.
The reporter noted that at present, there are still complaints from users about the "sheep bleating" platform.
According to the Black Cat platform, as of May 20, 2024, the number of complaints about Yangxiaobaa was 19168, including 923 complaints in the past 30 days. All complaints related to the violent collection and telephone harassment of Yangxiaobaa platform. There are complaints that they have received harassing calls and threatening information even though they have paid on time and are not overdue. There are complaints that the annual interest rate of the platform loan is 36%, which exceeds the national standard. In addition, there are guarantee fees, platform service fees, etc., and there is no manual customer service available to contact.
