The hottest Leo shares sell water pumps and make a

2022-09-19
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Leo's "water pump" will also make a huge investment to acquire "We Media" and "scenery". When the transformation meets the "new" business, the gross profit decreases

Leo's shares have invested 2.3 billion yuan to acquire 75% of the equity of Suzhou Mengjia Media Co., Ltd. (hereinafter referred to as Suzhou Mengjia), an we media marketing company. Leo said that this move will expand the territory of its digital marketing business and is one of the important contents of the company's business strategy in recent years

Leo shares invested 2.3 billion yuan to acquire 75% equity of Suzhou Mengjia Media Co., Ltd. (hereinafter referred to as Suzhou Mengjia), an we media marketing company. Leo shares said that this move will expand its digital marketing business and is an important part of the company's business strategy in recent years

the daily economy combed the company's annual report and found that behind the seemingly spectacular acquisition, the company's performance in recent years was not ideal. In 2017 and the first half of this year, the net profit attributable to shareholders of the parent company realized by Leo shares fell year-on-year

after its transformation into the field of digital marketing in 2014, Leo's main performance contribution now comes from digital marketing business. The decline in net profit and gross profit margin of digital marketing business are important factors affecting the company's performance decline in the first half of the year

in order to realize the transformation of "10billion sales"

at the beginning of listing in 2007, Leo was also a company mainly engaged in the research and development of miniature water pumps and garden machinery

however, in 2011, the net profit attributable to the parent company after non deduction decreased for the first time after listing. From 2011 to 2013, the net profit attributable to the parent company after non deduction of Leo shares decreased by 7.25%, 49.90% and 26.49% respectively year-on-year

it should be noted that at the beginning of listing, the internal management of Leo set a small goal, that is, to build the company into a world-class pump product manufacturer in ten years, with annual sales of 10billion yuan

with the decline of net profit year by year, Leo shares also means 1. A total of 97.02% of the respondents expressed concern about the market and technological development of circular economy and realized that it is "even more difficult" to achieve an annual sales of 10billion yuan only by the development of water pump business

therefore, in order to achieve the development goal of the company's annual sales revenue of 10billion yuan, the company decided to carry out extensive development in addition to the existing traditional manufacturing business and cultivate new profit growth points

in March 2014, Leo first acquired 85% equity of Shanghai Manku through 344million yuan, marking the "first shot" in transforming the field of digital marketing. Then in July of that year, the company acquired 100% equity of Shanghai argon krypton and 100% equity of amber communication by issuing shares and paying cash. The aforementioned series of acquisitions also means that the company has begun to increase its presence in the field of digital marketing, forming a dual main business pattern of "machinery manufacturing + interconnection"

gross profit margin of media agency services and other services fell

the above cross-border acquisition was Leo's previous experience in rock tennco Company and pactivcorp And other packaging production enterprises have worked in shares, which has brought significant performance efficiency. Leo's 2014 annual report shows that the company achieved a revenue of 2.874 billion yuan, an increase of 56.10% year-on-year; The net profit attributable to shareholders of listed companies was nearly 180million yuan, an increase of 221.34% year-on-year

Leo said in its annual report at that time that in addition to the steady growth of the sales revenue of the original civil pump business, the incorporation of Shanghai KuMan into the company's statements had a positive impact on the performance growth. In the first year of transformation, the revenue of Leo's Internet business has accounted for 34% of the company's total revenue

Leo shares, which has tasted the sweetness, has continued to acquire in the field of digital marketing since then. The daily economy learned that in 2015, the company completed the acquisition of Wansheng Weiye and minimally invasive era; In 2016, the company completed the acquisition of Zhiqu advertising. According to Leo's statement in this year's semi annual report, it has established an integrated marketing platform integrating basic Internet traffic into all-round accurate digital marketing services

a series of extensive mergers and acquisitions have produced obvious results. From 2014 to 2017, the revenue of Leo shares increased year by year, and the revenue in 2017 reached nearly 10.6 billion yuan, completing the small target set previously. However, it was also in this year that the net profit attributable to the shareholders of the parent company fell year-on-year for the first time after the transformation

in the 2017 annual report, Leo explained the reasons for the decline in performance. On the one hand, in the manufacturing sector, factors such as the rise in raw material prices led to the decline in product gross profit margin; On the other hand, Zhiqu advertising in the digital marketing sector has not fulfilled its performance commitments, and two subsidiaries have accrued a total of 40million yuan of bad debts

in the first half of this year, Leo failed to stop the decline in performance. Although the company's revenue increased by 43.35% year-on-year, the net profit attributable to shareholders of listed companies fell by 46.57% year-on-year

learned that factors such as the rising cost of raw materials in the civil pump business still affected the decline of its gross profit margin, which eventually led to the decline of its net profit in the civil pump business; In addition, the company also admitted that the net profit of digital marketing business has declined

in the first half of this year, Leo's media agency service business and digital marketing service business accounted for 83% of the company's total revenue. In other words, Leo's digital marketing business is the main source of the company's performance, and the decline in the performance of the above-mentioned functions that reach the long-distance control and upgrading software system through the joint function of the control computer will have a great impact on the company's performance

from 2014 to the first half of this year, the gross profit margin of the company's media agency services and digital marketing services showed an overall downward trend, in which the gross profit margin of media agency services fell from 16.39% in 2014 to 7.86% in the first half of this year; Digital marketing services fell from 49.17% in 2014 to 34.57% in the first half of this year

what is the reason for the overall downward trend in the gross profit margin of the above businesses? On September 12, Leo shares was contacted and an interview outline was sent according to the latter's requirements. As of press time, no reply had been received

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insiders said that at present, the gross profit margin of the whole digital marketing industry is going down, and different companies have different gross profit margins due to different business composition, different market strategies, different bargaining power, etc, "For example, some companies will make a low price in order to obtain the market. In addition, in terms of bargaining power, the rebate of some companies on the media side and the added value on the client side are also different."

the above-mentioned person also said that the recent downward trend of gross profit margin in the industry will not continue. "First, it has been at a relatively low point, and second, various companies will also take measures, such as adding new technical means and adjusting business models, which will lead to an upward trend of gross profit margin."

loan interest affects net profit

it is worth noting that with the continuous expansion of Leo's business scale, its demand for capital is also increasing. Leo shares are also raising funds in a variety of ways

however, the interest expense generated by financing has a negative impact on the company's performance

in 2017, Leo's short-term borrowings suddenly increased significantly. It was noted that due to the expansion of business scale, the company's short-term borrowings in 2017 were 2.025 billion yuan, an increase of 158.62% year-on-year; The financial expenses of the company in this year were 85.69 million yuan, an increase of 233.88% over the previous year. Leo said that it was mainly due to the increase in interest expenses caused by the increase in bank borrowings of the company

further analysis shows that the company's interest expenditure in 2017 was 84.5 million yuan, accounting for 98.6% of the financial expenses, and an increase of 178% over the same period of the previous year. At the same time, this data accounted for 20.12% of the net profit attributable to shareholders of Listed Companies in the current period

in the first half of this year, the financial expenses of the company continued to increase significantly, and the net profit fell by more than 40% year-on-year

Leo said that the expansion of the company's business scale and the increase in bank loans led to an increase in interest expenses; In addition, the amortized interest of the company's convertible bond funds is about 27.76 million yuan, which is one of the reasons affecting the decline of the company's net profit

the above increase in bank borrowings led to an increase in interest expenses, and the amortization of convertible bond interest was also reflected in the financial expenses of Leo shares. In the first half of this year, the company's financial expenses were 93.37 million yuan, an increase of 221.85% over the same period last year, of which the interest payment was 90.63 million yuan, an increase of 217.33% over the previous year, accounting for 97% of the financial expenses

CICC recently released a research report that Leo shares plans to acquire Suzhou Mengjia, and the digital marketing layout looks forward to the next city, but the increase in costs has led to a year-on-year decline in profits. In the short term, despite the rapid growth of digital marketing revenue, due to the relocation of office buildings, the rise of personnel costs and financial costs, the improvement of long-term profits remains to be tested

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