The slowdown in growth, increased competition, and internal fraud have made it anxious for the future.
Editor’s note: This article comes from the WeChat public account “Burning Finance” (ID: rancaijing) .
Author | Tang Yahua
Edit | Ling Yuanchuan
The Chinese stocks have exposed themselves for fraud. Ruixing Coffee’s 2.2 billion yuan counterfeit has been unrest, and the future sales revenue fraud has continued.
Beijing time on April 8th, Good Future issued an announcement saying that during the routine internal audit, the company found that an employee of the new business line light class colluded with an external supplier and increased it by forging contracts and other documents. Sales revenue, so the future has reported the matter to the police, the employee is currently detained according to law. As soon as the news came out, the stock price fell 17% after the market. As of last night’s close, Good Future’s stock price fell by 6.74%, with a market value of $ 30.8 billion.
Coincidentally, on the same day, iQiyi was shorted and accused of fraud before going public in 2018. The revenue in 2019 boasted about 8 to 13 billion yuan and the number of users boasted about 42%- 60%. After the news was released, iQiyi’s stock price fell more than 12%. As of last night’s close, iQiyi’s share price fell by 4.57%, with a market value of 12.1 billion US dollars.
For a time, the Chinese stock market was stunned. What is hard to understand is why Ruixing’s “self-exposure” incident happened shortly afterwards, so in the future, it will follow the self-exposure of internal financial fraud. “It’s lighter to confess your own initiative before the annual report audit than to be reported,” the industry believes that this may be because the future audit can’t pass, and “the two evils are less important”.
Behind “self-exposure” and being short-selling, it shows a good pressure for future expansion in recent years. Among them, the biggest challenge comes from new players in online education.
In 2019, Good Future and Ape Counseling “scarred eyes” on the summer advertising. Expansion pressure has made the future better from a profit to a loss, but still failed to “throw away” the ape counseling. Ape Coaching, which recently received $ 1 billion in financing, has become the highest-value unlisted online education company.
This time, it ’s not from the exposure, which superimposes the trust crisis of Chinese stocks. In the short term, it is inevitable that the stock price will decline and the market value will shrink in the future. The fundamentals of the future will not have much impact. However, before the good future was shorted, investors filed a class action lawsuit unsuccessfully. Industry insiders predict that with this “significant element and fraud element”, the class action lawsuit is likely to make a comeback.
Why do you want to expose yourself in the future?
“The audit is unsuccessful and must be exposed.” Feng Bin, founder of Pu Nan, the capital stock of professional research, explained the reason for the announcement of financial fraud at this time.
In fact, Good Future has previously stated that it will announce its 2020 annual financial report on April 23, and on the eve of the financial report, plus Ruixing ’s announcement of fraud, many people speculate that this is not a good time for self-exposure to be forced to choose.
Kuang Yuqing, the founder of Lens Research and an expert in capital market research, pointed out that many people think that Ruixing and the good future are self-exposed financial fraud. In fact, they have been forced to confess their frustration. It may be that after being short-selled by the short-selling institution, it caused the alert of the auditing institution and found problems during the special audit. Between proactively admitting financial fraud and being reported, the two evils must have been taken lighter.
Chen Zunde, general manager of Fande Investment, who has been studying the US stock market for a long time, told Ran Finance: “Now that the news is so transparent, it is easier to maintain the company’s image than being discovered by other institutions. Because of the Ruixing incident, the audit institutions are now more cautious. Before the due date of the annual report, if the company and the auditors do not agree, sooner or later they will not be able to pass through, and the paper package will not catch fire. “
Good future responded: “In fact, we can not publish this news, which is completely disclosed by us spontaneously. Although the business involved this time does not account for a large proportion of total revenue, we need Responsible for investors. “
The difference is that the fraud exposed by Ruixing Coffee is a false increase in the company’s large-scale operating data, and the good future is the performance fraud of a small team light class business line.
What was the origin of this business that did n’t have much presence before? Why did it involve large amounts of financial fraud and was notified by the company?
Public information shows that Light Class belongs to the group of Good Future Quality Education, and it was launched in February 2018. It is an online learning platform that focuses on the cultivation of discipline literacy for 6-12 year old primary schools. Bai Yunfeng, President of Good Future Group, positioned the learning and thinking light class as a strategic-level product that “responds to the learning needs of family education scenarios.”
At present, the first and second tier cities are mainly targeted at the three systems of “online”, “peiyou” and “innovation”, while light courses are mainly aimed at less developed areas, with cheap prices and high cost performance. The Xueersi light class mobile phone application shows that the Chinese course with 16 animation classes is priced at 299 yuan; the English course with 28 animation classes and 16 AI live classes is 499 yuan.
At the end of 2019, Light Class launched the Learning and Thinking Light Class Box, which proposed “Let the user’s living room become a class in seconds” to connect mobile applications, smart speakers and TV boxes. In other words, light lessons are passed through with cable TV providers, mobile, PepsiCo, JD, etc.