The net that clean out rice has become a foundling privatisation next capital market?

(editor: qing nan)

August 22 is taomee release second-quarter earnings this year. After two weeks, rice prices have edged up, from around $5 was promoted to a maximum of $6.82, although a few days later also have fluctuated, but really started to shocks are earnings release, after fell yesterday, today again fell by 9.53%. It also makes after long-term “lonely” taomee stock again “fall from grace”.

can cause such fluctuations are more earnings to share price is too bad. Let’s look at the main situation of The Times earnings:

– total net revenue of $12 million, compared with $10.5 million in the same period of last year’s 15% growth.

– net profit of $300000 and $3.2 million a year earlier.

– based on the general accounting standards (Non – GAAP), and net income of $1.6 million, and $3.8 million a year earlier.

although the decline in revenue growth, net profit, but looking at a quarter in terms of performance, it seems, are still good, but should be put in a longer time span, the situation is more grim.

2 years performance little progress

cloud network hunting by collating the net that clean out rice from the second quarter of 2011 to 2011 in the second quarter earnings key data, want to give the reader a more intuitive judgment. To be sure after the company listed in the second quarter of 2011 are the first results. (hunting cloud network when it was reported in May, “” the depth of the report, from the lack of financial performance, rivals and business development, such as Angle carried on the thorough analysis.)

look first in the total revenue, and barely two years ago, growth in the second quarter of this year, even than listed in the first quarter of 2011 before the less $12.4 million in revenue. Of these two years, the highest for Q3’s $2011 in 12.7 million, the lowest $2012 Q4 7.47 million.

pre-ipo, revenue mainly comes from the online part of the net that clean out rice, had occupied as high as 90% in Q2 2011. Since then, however, the net that clean out rice CEO Wang Hai soldier has made it clear that, to actively expand the proportion of offline business, strive for can do 6:4 proportion. Can see from the graph, the net that clean out rice offline revenue evident seasonal contrast, this also with film, animation, film and television works such as play cycle. The highest proportion of offline business less than three.

in the gross profit and net profit in terms of the two key indicators, basic it is weaker in development, which directly shows the company’s operating costs control problem.

want to know, in the case of domestic Internet industry rapid development, taomee’s performance is “backsliding”. The pursuit of high growth stocks investors, this is intolerable, thus lose interest in shares of taomee. Since June 2011, the net that clean out rice’s shares on the market in just a month after has slightly pull up and hit a record high of $14.72, stock prices began to fall all the way, and the lowest at $3.15. In nearly two years of long period, basic prices is within the range of 3 – $6.

what’s worse, the volume also fell sharply, from newly listed after an average of more than 200 shares, has dropped to the present day thousands of stocks. It also shows that the net that clean out rice has become a “abandoned” in the capital markets.

strategy improper?

taomee avoid tencent children involved in virtual community, set up four years on the nyse IPO success, namely this is also the domestic Internet as a learning model, but why it was abandoned by capital markets?

of course, is ultimately reflected, financial and business company in around the established goal which exist in the execution of strategic problem? Hunting cloud network analysis is as follows:

1, underfunded: overall, the children’s online and offline virtual community is a resource industry, including the content, services, etc. But open taomee calendar quarter results we found back, taomee “stingy” in this regard. During Q2 from Q2 2011 to 2011, while operating expenses overall growth, is relatively stable. In addition, the cash flow of rice have been stable at around $120 million. Visible, company’s overall operating style tend to keep steady.

among them, operating expenses, including product development, sales and marketing and management costs.

2, business model extension from line to line down first, it is be compelled helpless. After the children’s community bon proved, tencent and other opponents went at once to come in, intensified market competition directly. Blue ocean space of online business is more and more narrow. Offline business despite a certain profit space, but that rather depends on offline resources, the cost price for rice is higher, short-term gains is weak. Besides, for the rice into the television and animation works, has obvious seasonal effect, makes the company’s performance volatile. Us capital markets to see there is a growth in the space of technology stocks, taomee network gradually increase, the proportion of the company’s properties have been changed. According to the original valuation system is not appropriate.

3, game products to high age students expand encountered Nemesis: taomee original location of users is 6-14 years old children. However, subject to the restrictions of time and ability to pay, per capita contribution value is low. So the company to 10 to 18 higher age groups to expand. This is so with tencent, netease also this giant to compete for the user, the cost is extremely high, and its own product research and development ability is not strong. Among them, taomee “original mind corps”, the first end of the swimming products intended users ages is 14 to 25 years old, director of product even with “for young and old” to describe the product.

next station: privatization?

although taomee is far away from real delisting of the red line is too (share price below $1) for a long time, but this possibility is not impossible, we might as well to assumptions.

according to the investment banker’s point of view, the general enterprise meet the following several conditions of the company should consider privatization: 1, the company’s business requires significant transformation, listed on the state is not conducive to the transformation; 2, the two markets (such as the U.S. stock market and the domestic stock market) have difference, the privatisation of the benefit is very high. 3, if a company’s share price rising long-term downturn in the future no space, account cash a lot more than market value, even the company’s founder has strong control, more should seriously consider privatization.

the rice, and their transformation strategy is not clear, because the location of field and company has restrictions on its operations, so it is hard to have a big transformation, the latter two are more suitable. At present, the rice has a market value of about $180 million, for had $114 million in cash flow, privatization of difficulty is not great.

variable factors are:

in the third quarter performance even more crucial: it is reported, the net that clean out rice’s tour new hand the cernet number: “god of war begin on July 16th, from the official claimed user retention rate is good.

the game of the same name the film “(” big movie 3 ares released the same day, more than 8.5 million at the box office, and stimulate producers light media shares jumped 9.49% in the session. At present the film has won nearly 40 million at the box office, is expected to sprint one hundred million yuan. In the third quarter of this or camp up to the lift.

therefore, taomee can cross the line, the third quarter performance is critical.