Summary: The market value has shrunk significantly, and Qiwo Information’s losses exceeded expectations

When the storm comes, even pigs can fly. Recently, the pilot reform of the GEM registration system has been in full swing. Affected by this positive impact, the overall performance of the GEM has been good and has a tendency to rebound.

It’s an explosive period for the release of mid-year reports of major companies. Who is the real one and who is relying on bragging? The financial report data is clear.

Recently, Qitian Technology, a veteran GEM listed company, released its semi-annual report. The report shows that in the first half of 2020, the company achieved operating income of 552 million yuan, a year-on-year increase of 3.67%; the net profit attributable to shareholders of the listed company was -123 million yuan, a year-on-year decrease of 408.88%.

In addition, core financial indicators such as net cash flow generated from operating activities, weighted average return on equity, and total assets all showed a year-on-year downward trend.

It is worth noting that after undergoing key inquiries from the Shenzhen Stock Exchange, its subsidiary Shanghai Qiwo Information Technology Co., Ltd. (Qiwo Information) continued its previous loss trend.

As shown in the picture above, Qiwo Information’s revenue in the first half of 2020 was about 3.7 million yuan, and its net profit was about -9.56 million yuan. In the previous first half of 2019, the above two figures were 26.13 million yuan and -25.25 million yuan respectively.

1. After 4 years of transformation, the market value has shrunk greatly

Speaking of Qitian Technology, it can be said that this is a company that likes to seize the limelight. Its original name was Shanghai Kangnaite Optical Co., Ltd., with the stock abbreviated as Kangnaite. Public information shows that the company was founded in 1996 and has always been one of China's largest suppliers in the world's eyewear market.

In 2016, after the reorganization with Shanghai Qiji Intelligent Technology Co., Ltd. (Qiji Intelligent), Kangnaite changed its name to Kangqi Co., Ltd. and officially transformed into financial technology. In January 2020, Kangqi Co., Ltd. changed its name to Qitian Technology.

Since then, Qitian Technology has acquired more than a dozen related companies by spending money in various ways to expand its layout in the field of financial technology.

The assets and liabilities related to spectacle lenses have been divested and are no longer included in the scope of consolidated statements. The 2019 financial report disclosed that Qitian Technology is currently mainly engaged in bank card value-added marketing business and digital commodities. Marketing business, aviation and travel consumption digital business, insurance brokerage business, financial science and technology innovation service business, etc.

Currently, Qiwo Information is one of the pillar companies of Qitian Technology. Tianyancha information shows that Qiwo Information was included in the territory of Qitian Technology in January 2019. Qitian Technology holds a total of 51.01% of its equity, and its main business is financial technology related services. Through the self-developed credit card customer screening data model, credit card customers who meet the bank's requirements are screened, and then the joint risk control module built between Qiwo Information and the bank is used to judge the users, and the bank ultimately decides whether to issue a credit card.

Zeng Qiwo Information’s business includes the credit installment loan platform Chuanchuan Wallet. Kangnet and Qiji Intelligence participated in Chuangchuan Wallet’s angel round and Series A investment in 2018 and 2019 respectively. However, at present, Chuanchuan Wallet is no longer searchable in various application markets.

Although it is turning against the wind, the stock price of Qitian Technology does not seem to be "blown" very high. On the contrary, after the transformation, the stock price has plummeted. Today, it has shrunk by more than half compared to 4 years ago, from more than 20 yuan to less than 6 yuan.

2. Behind the inquiry, Qiwo Information’s losses exceeded expectations

Behind the shrinkage of stock price and market value, Qitian Technology’s related business model and financial actions are also facing controversy.

Take the subsidiary Qiwo information mentioned above as an example.

In May this year, the Shenzhen Stock Exchange issued a letter of inquiry, which mentioned that some innovative projects have concentrated credit risks due to cardholders of cooperative banks, and the company shall bear credit risk losses as stipulated in the agreement.

The Shenzhen Stock Exchange requires it to provide additional explanations on the specific methods of carrying out innovative projects, the reasons for the concentrated credit risk of cardholders, whether the relevant business is in compliance with national laws and regulations, whether it has the corresponding business qualifications, and whether There are risks of violations of laws and regulations, as well as the amount of credit risk losses the company has incurred in the past two years, and whether it has fulfilled its information disclosure obligations.

In this regard, Qitian Technology also issued a long response, which mentioned that since the first cooperative bank successfully signed a contract in August 2017, by the end of 2019, the number of cooperative banks signed by Qiwo Information was only 6 Home, this credit risk mainly occurred in a newly signed cooperative bank at the end of 2018. In addition, Qitian Technology did not disclose the specific amount of credit risk losses incurred in the past two years.

Immediately afterwards, the Shenzhen Stock Exchange asked about the reasons and rationality of its financial assistance of 159 million yuan to Ciwo Information. Just in January this year, the first extraordinary shareholders meeting of 2020 held by Qitian Technology reviewed and approved the "Proposal on the Extension of Financial Assistance and Related Transactions for its Holding Subsidiaries" in order to continue to support the business development of its holding subsidiary Qiwo Information , it is planned to extend the financial assistance of 159 million yuan to Qiwo Information until April 10, 2023, with an interest rate of 5.22. Liu Tao and Qirong Investment, other shareholders of Ciwo Information, bear corresponding guarantee responsibilities for this financial assistance based on their shareholding ratio in Ciwo Information.

But the problem is that based on the revenue of Qiwo Information, it can be inferred that on April 10, 2023, there will be pressure to return this financial aid to Qiwo Information with a high probability, which shows that there are problems with its business model. .

According to Qitian Technology’s financial report, when it acquired Qiwo Information, it predicted revenue of 17.0973 million yuan and net profit of -11.9034 million yuan. However, Ciwo Information failed to complete the performance forecast when the acquisition was made in 2019. The actual receivables were 49.0379 million yuan, with a net loss of 119 million yuan.

In this regard, Qitian Technology explained in the financial report that Qiwo Information’s losses were due to the great uncertainty in regulatory policies and the concentrated credit risk of the partners’ customers. The company shall bear the credit as agreed in the agreement. Risk losses, and a full credit impairment loss of RMB 9.9884 million was accrued during the reporting period.

3. Where will Qitian Technology go in the future?

After the wind slows down, where will the pigs end up? No one seems to have an answer.

Once upon a time, the acquisition of Qiji Intelligence gave Qitian Technology full power. The stock price rose all the way that year, reaching a maximum of about 24 yuan.

Today, the financial technology industry has entered a reshuffle stage, with regulatory tightening and competition intensifying. Qitian Technology’s heavyweight industries are facing more and more unknown risks.

In addition to Qiwo’s information, there are also many doubts about Qifa’s information, another pillar company. Its main business is the value-added distribution of Internet traffic. Simply put, it is a traffic intermediary - a loan supermarket. The main operating company of "Miao Baitiao" is Qifa Information.

Miao Baitiao has repeatedly caused Qitian Technology to be involved in public opinion turmoil, such as being accused of "charging beheading interest", "suspected of routine loans", "diverting 714 anti-aircraft artillery products", etc. At the beginning of this year, some users said that they could not log in to the Miao Baitiao APP. Subsequently, Qitian Technology suspected that related businesses were shut down.

On the other hand, after the crazy mergers and acquisitions, the performance of the acquiring companies is also unsatisfactory. The data that can be seen is that the credit card customer marketing business revenue of related companies under Qitian Technology has declined, the growth of financial technology service performance is weak, and the insurance business has just started and there are many constraints.

In the past few years, Qitian Technology's revenue growth has been ups and downs, and its net profit has been a roller coaster, which has really made the company's shareholders sweat.

The good news is that Qiwo Information predicts that business will return to an upward trend in 2021, which will inevitably affect the profitability of Qitian Technology.

However, "slaps in the face" have happened before. What will happen in the future?

We'll see.

(This article only represents the author’s views and does not constitute any investment advice)