July 25, recently, Zhejiang Startup Co., Ltd. (hereinafter referred to as "Startup Shares"), which has been listed for less than two years, has once again attracted the attention of many insiders. The topic stems from a merger and acquisition plan that began planning last year. On May 9 of this year, the reorganization plan for the initial share plan was officially released. Startup Shares intends to purchase Shenzhen Zehui Technology Co., Ltd. (hereinafter referred to as "Zehui Technology") held by Liu Zhiheng, Ma Xiuping, Shenzhen Changyu and Longyan Haojia by issuing shares, convertible bonds and paying cash. 88.5714% equity, cut into the fast-growing cross-border export e-commerce industry.


　 The reporter noticed that since the start-up shares were listed in August 2017, there has not been a large-scale merger and reorganization transaction. Startup said that after the completion of the acquisition, the company will start the development model of "children's clothing, children's shoes business + cross-border export e-commerce business", and add a cross-border export e-commerce in the rapid development period on the basis of the existing main business. Business, the company and Zehui Technology will gradually develop business cooperation, starting shares through Zehui Technology’s sales channels to promote products overseas and expand overseas markets; Zehui Technology through the sale of "ABC KIDS" brand children's clothing, children's shoes to create high-end brand boutique route To form a differentiated competitive advantage.

Why did the start-up shares lock the first major M&A after listing in the cross-border e-commerce field? The reporter noted that in recent years, cross-border e-commerce has become a hot spot for capital investment, and cross-border e-commerce companies that have developed to a certain scale in the early stages seek capitalization Has become a trend.

　　 intends to acquire "Zehui Technology" equity

　　 In recent years, the cross-border e-commerce field has been gaining momentum, and a wave of cross-border e-commerce investment has also been launched in the children's wear field. According to the plan, Startup intends to purchase 88.5714% equity of Zehui Technology held by Liu Zhiheng, Ma Xiuping, Shenzhen Changyu and Longyan Haojia by issuing shares, convertible bonds and paying cash. Taking March 31, 2019 as the pre-assessment base date, Zehui Technology's 100% equity value is estimated at 1.8 billion yuan, and its 88.5714% equity transaction consideration is initially determined to be 1.594 billion yuan.

　　Starting Stock was listed in August 2017. It is a well-known children's wear and children's shoes brand operator in the domestic children's products industry. The well-known children's clothing brand "ABC KIDS" comes from the starting stock.

　　 This time, Zehui Technology, which is in the starting share, is a cross-border e-commerce export company. Information shows that Zehui Technology was established in 2011, mainly through the cross-border B2C online retail business model, and eBay, amazon, alexex, WISH, Shopee, Walmart, Shopee and other third-party international e-commerce platforms, will apparel shoes and hats, beauty Hundreds of thousands of categories of products, such as beauty makeup, 3C electronics, mobile computer peripheral products, mother and baby toys, pet supplies, outdoor sports, home department stores, etc., are sold to overseas end consumers, and their exports cover Britain, France, Germany, Japan, Italy, More than 180 countries and regions around the world such as Spain and Portugal.

From the performance of the past two years, Zehui Technology achieved an operating income of 1.76 billion yuan and a net profit of 82.26 million yuan in 2017; from January to September 2018, it achieved an operating income of 1.28 billion yuan and a net profit of 78.68 million yuan.

According to relevant data, the scale of China's cross-border e-commerce transactions reached 9 trillion yuan in 2018, an increase of 11.6% year-on-year, of which the export cross-border e-commerce scale was 7.1 trillion yuan, an increase of 12.7% year-on-year.

Based on the optimistic about cross-border e-commerce business, Startup said that Zehui Technology has strong profitability and good development prospects. After completing this transaction, the synergy between Zehui Technology and the company will produce new Profit growth.

　　 The desire to transform "out to sea" has failed

According to the 2018 financial report of Startup, benefiting from brand influence and product innovation, in 2018, Startup realized a main revenue of 1.399 billion yuan, a year-on-year increase of 4.43%, and a net profit attributable to shareholders of listed companies of 181 million yuan, a year-on-year decrease 7.05%. In the first quarter of 2019, the start-up shares achieved a main operating income of 316 million yuan, an increase of 19.11% year-on-year; the net profit attributable to shareholders of listed companies was 46.684 million yuan, an increase of 47.63% year-on-year. In the opinion of the industry, cross-border e-commerce exports will become one of the important engines for the continued development of China's foreign trade exports. The start-up share's performance source mainly depends on the domestic market, and the decline in profits in 2018 also shows the weak growth of the domestic market, which is also one of the reasons why the start-up shares target cross-border e-commerce retail export business.

Since its establishment, 　　Startup has been focusing on industries such as children's shoes, children's clothing and children's apparel accessories. Its products cover T-shirts, pants, sweaters, skirts, coats, down jackets and so on. Data show that in 2018, the company's children's shoes and cloth shoes revenue increased by 83.22% over the previous year, and children's clothing accessories revenue increased by 60.82% over the previous year. According to relevant statistics, the top ten brands of China's children's shoes market in 2018 had a market share of 15.20%, and "ABC KIDS" had a market share of 3.6%, ranking first in the children's shoes market.

Earlier, Startup also stated that this equity acquisition will help the company turn its vision of "serving global children" into reality, further expand overseas markets, build overseas sales channels, and enhance the company’s multi-channel and multi-level sales network advantages. Children from 3 to 13 years old around the world provide a full range of clothing products with various styles, providing children with assured health products and services.

　　 However, the reorganization plan of the starting shares failed in the end. On June 15, the start-up shares issued a reorganization termination announcement, saying that due to the failure to reach an agreement on important terms, the company decided to terminate the acquisition of 88.5714% equity of Zehui Technology, which also means that the start-up shares intend to quickly enter cross-border export power through acquisition integration The original intention of the commercial industry failed. In fact, shortly after the start-up shares announced the restructuring plan, the Shanghai Stock Exchange issued an inquiry letter to the start-up shares regarding the reorganization. After the completion of the above transaction, the starting stocks are required to explain the stability of the listed company’s future control and related measures, and whether there is a situation in this transaction that circumvents the formation of restructuring and listing. In addition, regarding the financial, valuation and performance commitment information of Zehui Technology Assets, the Shanghai Stock Exchange also made key inquiries in the reorganization inquiry letter.

　　Industry insiders believe that although multiple marketing channels are a necessary way for products to reach the market, there is still a large gap between the overseas market and the domestic market, and the initial share "going out" still faces challenges. Especially if you fail to lay a solid foundation in the domestic market and blindly seek overseas markets, you will eventually not only fail to find new growth points, but will also drag down your performance. In addition, traditional companies' mergers and acquisitions of cross-border e-commerce companies also face difficulties in integration.