Campus "Profiteers" Have Been Struggling To Go Public For 17 Years, And The Three People'S Bank Has Failed To Reorganize And Then Returned To The Main Board

On March 5, the Three People's Bank Media Group Co., Ltd. (hereinafter referred to as the "Three People's Bank") will accept the examination of the initial listing application of the Development and Examination Committee of the CSRC.

Qian Jundong, the founder of the Three People's Bank, made his fortune by "scalping" on campus and became a large advertising media company in the field of integrated marketing services. Following the successful listing of NEEQ in 2015 and the failure of "marriage" Xi'an Tourism (000610. SZ) in 2016, the three people's bank launched a sprint to the main board IPO in April 2019, proposing to issue 17266700 shares and raise 1.034 billion yuan.

The three person bank, which has media resources of more than 800 well-known universities in China, has a group of "star customers", such as China Telecom, China Mobile, China Unicom, Industrial and Commercial Bank of China, Agricultural Bank of China, Yili Group, Nongfu Spring, Tsingtao Beer, etc.

In addition, there is no lack of "star shareholders". According to the prospectus on October 15, 2019, iFLYTEK holds 4.26% of the shares, making it the sixth largest shareholder of the Three People's Bank; Beijing Natural Way holds 3.33% shares, and Zhuhai Optical Holdings holds 2% shares, ranking the seventh and tenth largest shareholders respectively.

So, can the campus "profiteer"'s business experience win the applause of the Development and Examination Commission?

Business experience of campus "scalpers"

The journey of the three person trip should start from the entrepreneurial story of the founder Qian Jundong.

According to local media reports in Shaanxi, Qian Jundong was born in 1980 to an ordinary peasant family in Anhui, and was admitted to Chang'an University in 2000.

Due to family reasons, Qian Jundong started his business in college. He sold walkmans and English tapes at low prices through acquaintance channels, and then "reselled" them in school, earning the first bucket of gold in his life. Over time, Qian Jundong also won the title of "Qian Daodao".

In 2003, Qian Jundong, a junior in college, seized the opportunity of the booming campus communication market and, together with his partner Cui Lei, established the first Xi'an Sanrenxing Information Communication Co., Ltd. in Shaanxi Province funded by undergraduates with a registered capital of 500000 yuan, which is the predecessor of Sanrenxing.

On April 21, 2015, the three people's bank was listed on the NEEQ, becoming the "first share of campus media on the NEEQ". In the same year, the three people's bank received a total of 29.76 million yuan of subscription money for shares from Shenwan Hongyuan, Qilu Securities, Beijing Keyue Investment Consulting Center (limited partnership) and Western Securities.

Landing on the new third board is just the beginning, and the three person line has also tried to land on A-shares in a curve.

Since April 2016, the Three People's Bank has been planning to suspend trading and restructure the assets of Xi'an Tourism (000610. SZ).

According to the acquisition plan of Xi'an Tourism, it plans to acquire 100% equity of Sanren Bank with RMB 1.104 billion.

At that time, Xi'an's tourism business, which mainly engaged in hotel and management, catering services, and tourist attractions, was stagnant, and it was urgent to find new business growth points through acquisition and transformation. However, six months later, the two sides "had disputes over important terms such as valuation, and still could not reach an agreement after many negotiations" and announced the failure of "marriage".

After delisting from the NEEQ on June 13, 2017, the three people's banks signed a listing guidance agreement with Industrial Securities on October 26, 2017. Until April 2019, the prospectus applying for listing on the main board was disclosed for the first time.

Why does the net profit margin slow down?

What are the advantages of the three member bank that has won the certification of "Digital Marketing Class A Advertising Enterprise" by the China Advertising Association?

The prospectus shows that the three people's bank positions itself as a "comprehensive advertising media enterprise engaged in integrated marketing services", mainly engaged in digital marketing services (including advertising agency, advertising scheme planning and implementation), scene activity services and campus media marketing services.

The three people's bank said that at present, it has more than 800 well-known university media resources, including campus bulletin boards, sports field fences, campus canteen table stickers, freshmen manuals, campus light boxes, car sheds, rest seat sheds, university BBS and other campus media resources.

The fund raised this time is 1.034 billion yuan, which is also used for "expansion of digital integrated marketing service system", "expansion of scene activity service system", "expansion of campus media", "construction of creative center and business headquarters" and other projects.

From the perspective of performance, from 2016 to the first half of 2019, the main business income of the three PBCs was 367 million yuan, 757 million yuan, 1.099 billion yuan and 713 million yuan respectively, and the corresponding net profits were 72.5533 million yuan, 97.7627 million yuan, 124 million yuan and 45.1016 million yuan respectively.

Among them, digital marketing business has become the main contributor to its revenue. Taking the first half of 2019 as an example, digital marketing revenue was 657 million yuan, accounting for 92.17% of the total revenue.

Looking at the huge student market, what are the roles of the three person tour for campus publicity?

The prospectus on October 15, 2019 shows that China Telecom and China Mobile are the top five customers of the three people's banks from January to June 2016, Yili Group is the top five customers from 2017 to June 2019, and Jingdong Group and Industrial and Commercial Bank of China are the top five customers from 2016 to 2018.

Among them, the Three People's Bank has a long history of cooperation with some major customers: for example, it has cooperated with China Mobile since 2004, China Telecom since 2008, Industrial and Commercial Bank of China and Jingdong Group since 2013, Agricultural Bank of China since 2014, and Yili Group since 2015.

In addition, the top five suppliers of the Three People's Bank should not be underestimated.

From January 2016 to June 2019, the three people's bank has carried out business cooperation with well-known Internet media such as Byte Beat (operating today's headlines, Tiaoyin and other APPs), Tencent, Sina (including Sina Weibo), NetEase, iQiyi, Tudou Culture, and through purchasing video patch ads, creative insert ads, top banner ads, picture in picture ads, Optimus Prime ads Information flow advertising and other forms of access to advertising resources.

However, although the compound annual growth rate of main business revenue is as high as 73.01%, the net profit margin of the three people's banks has slowed down in these years.

According to the rough calculation of its financial data, from 2016 to 2018, the net profit margin of the three people's bank in the first three years was 19.7%, 12.9% and 11.28%, respectively, declining year after year, while from January to June 2019, the net profit margin of the three people's bank was only 6.3%.

In addition, during the reporting period, the comprehensive gross profit rates of the three PBCs were 38.99%, 27.24%, 25.34% and 16.8% respectively, which can be described as declining year by year.

An advertising marketer pointed out to the 21st Century Business Herald reporter that "the different gross margins of customers in different industries may be due to the greater voice of upstream customers of the Three People's Bank, especially large customers who have higher requirements for rebate when choosing advertising agencies."

The prospectus also confirms this.

From 2016 to June 2019, the amount of rebate returned by the three people's banks to customers continued to increase, which were 249300 yuan, 46059000 yuan, 98.3962 million yuan and 106 million yuan respectively.

In addition, the Three People's Bank also needs to face the pressure of high accounts receivable.

From 2016 to January June 2019, the balances of accounts receivable of the three PBCs were 176 million yuan, 274 million yuan, 353 million yuan and 606 million yuan respectively, of which the balances of accounts receivable at the end of 2017 and 2018 increased 55.62% and 28.74% year on year respectively.

In this regard, the three people's bank explained in the prospectus that "the top five customers of the company are mainly large and high-quality customers in telecom operators, finance, fast moving consumer goods and Internet industries, with good credit standing and timely payment collection. The balance of accounts receivable with an age of less than one year at the end of each period accounts for more than 98% of all accounts receivable. The account age is short, so the possibility of bad debts is small."

On March 2, the reporter further called the public phone number of the three people's bank, but the phone has not been answered.

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