Hao Jun, vice chairman and executive vice president of Wanrun Technology, said in an interview with China Securities Journal that the company will adhere to the strategy of coordinated development of LED and digital marketing in the next few years, and will continue to adopt mergers and acquisitions, etc. Further improve the digital marketing industry chain.
Actively promote transformation and upgrading
China Securities Journal: At the beginning of the listing of Wanrun Technology, LED packaging and lighting were the main industries. In recent years, the company has laid out the Internet advertising industry across the border. Why did the company choose to cross the border in this industry?
Hao Jun: Wanrun Technology decided to transform since 2014. The company believes that although the LED industry market still has a certain market increment and profit margin, the development speed has slowed down significantly, transforming into a “precautionary†move. After investigating a number of industries, the company has locked in the Internet sector. In terms of the entire Internet sector, entities in the gaming, e-commerce and Internet advertising industries have strong profitability. At the moment of the rapid development of the Internet sector, the company chose the Internet advertising industry as the beginning of the transformation.
China Securities Journal: The development of the Internet advertising industry is obvious to all. What is the core competitiveness of Wanrun Technology?
Hao Jun: The company has the following characteristics in the transformation process, which constitutes the transformation advantage of the company. First, the M&A strategy is clear and continuous: the company's research is solid and determined, and the transformation strategy has clear plans in the next few years. Second, it is different from the company whose main business has been in trouble and transformation. The company's LED main business has been in recent years. The performance of the company continued to maintain steady growth and lay the foundation for the company's transformation. Third, the company's management team is stable, especially the senior management team. In addition to the founders, many senior executives work in the company for about ten years. Fourth, the company is responsible for the transformation. The investment team is professional, and the two independent investment teams are equipped with professionals in the fields of finance, law, finance, internet, etc. Fifth, the company carefully chooses the target of merger and acquisition. Since the transformation in 2014, the company has accumulated its resources. According to incomplete statistics, the company has more than 100 target companies selected from January to August this year.
Prevent merger risk
China Securities Journal: How does Wanrun Technology control the risk of mergers and acquisitions to protect the interests of small and medium investors?
Hao Jun: There are many aspects to protecting the interests of small and medium-sized investors. In terms of M&A, it is mainly to control the risk of mergers and acquisitions including high valuation. As a light asset company, the Internet company has a higher premium. From the perspective of accounting treatment, the goodwill formed by mergers and acquisitions is relatively large, and the higher the valuation, the greater the goodwill, the greater the risk of mergers and acquisitions.
In order to safeguard the interests of all shareholders and effectively prevent merger and acquisition risks, we have a set of strict standards in selecting targets, due diligence, valuation, and trading conditions. We internally call the “five military regulations†of Wanrun M&A.
The first military regulation is that the self-owned investment team has made the best adjustments in the early stage: the company has a strong and professional investment team inside. At present, the staff of the company's investment department specializes in legal, financial, internet, investment and other backgrounds, and is equipped with two investments. The director, who led the two teams, who have been in contact with the project for a long time, have a deep understanding of the Internet industry and have a good professional reputation in the market.
The balance of our own team and the starting point of the intermediary is not the same, which can form a good complement, the self-owned team understands the Internet advertising industry, the self-owned team is to determine the target company in the Internet advertising Whether the industry has a promising future and whether it meets Wanrun’s “M&A mapâ€, that is, whether the M&A target matches the company’s industrial development strategy is the primary consideration for trading negotiations.
The second military rule is to reject high valuations. High valuations often coexist with high-commitment performance. However, high-performance commitments are likely to cause the target companies to pursue short-term benefits, which will undermine the long-term development of the company; the phenomenon that high-performance commitments cannot be completed will also harm the interests of investors. The company adheres to the bottom line of lacking in the market, taking the industry's mainstream valuation as the standard, resolutely denying the high valuation project, rejecting the daring performance commitment without data support. At present, the projects we have acquired are all based on performance commitments of 13-14 times. In line with the industry average.
The third military regulation has a hard requirement for the form of consideration payment: the valuation of the merger target consists of two parts: the cash consideration and the stock consideration. The company gradually makes the cash consideration no more than 40%, and the stock consideration is not less than 60% as a transaction. condition. We insist on the principle of restricting the consideration of cash. It is hoped that the original shareholders of the target company will take more shares of the listed company, so that the cooperation between the original shareholders of the target company and the listed company will be deeper. Generally speaking, the future of everyone is bundled together, the original of the target enterprise. Shareholders also hope to develop together with listed companies, effectively reducing the participation of performance-flicking companies.
The fourth military regulation is a four-year performance commitment model. Compared with the general standards, there are at least four advantages: first, it reflects the self-confidence and confidence of the target company team; second, it can prevent performance from water injection to a certain extent; third, it effectively curbs the short-term behavior of the target company and is beneficial to the long-term behavior of the target company. Healthy development; four for the company to win more integration time.
The fifth military regulation is to adhere to more stringent cash payment and stock unlocking conditions. Taking the company's new M&A transaction in Vientiane as an example, 40% of the cash consideration is divided into three payments. After the approval of the regulatory authorities and the funds raised, the first payment will be made. In 2017 and 2018, there will be two payments, respectively. It is the completion of the previous year's commitment performance. The stock pays 60% of the transaction consideration, and the first 36 months after the listing of the stock is locked. After 36 months, 75% of the shares can be traded, and the remaining 25% will be unlocked after 48 months of listing.
At the same time, before the company pays in cash or lifts the stock, it sets the conditions for the collection of receivables. For example, the precondition for the company to pay the 2018 cash consideration is that the performance of the target company's commitment in 2017 is completed, and the balance of accounts receivable at the end of 2017 should be recovered more than 70%. Setting a strict proportion of receivables and paybacks can encourage the target enterprises to focus on improving the quality of operations, effectively preventing the bidding of the target company's performance, and protecting the interests of all shareholders.
Maintain dual main business development in the short term
China Securities Journal: At present, the listed companies have more flowers for the transformation of Internet advertising. What is the overall planning of the integrated marketing industry chain for listed companies?
Hao Jun: At the beginning of 2015, the company has formulated a clear strategic plan for transformation, and built the entire industry chain of Internet advertising media through the integration of mergers and acquisitions and mergers and acquisitions. The whole industry chain includes both horizontal and vertical directions. Among them, creative planning, channel placement, data mining, programmatic purchasing, and Internet advertising media resources are the indispensable main links in the vertical development of the entire industry chain.
At present, the company's merger and acquisition of three, participating in an Internet advertising company, basically involves the main aspects of the industry chain. In the future, the company will further improve the integrated marketing industry chain by means of mergers and acquisitions. The horizontal development is mainly focused on deep digging of vertical segmentation areas, such as the prestige of the prestige of Yisheng Yixuan and Yiwan Wireless, the business is engaged in the home decoration industry in the search engine field advertising and focus on the Internet company to do APP Promotion, the main business is in the channel, but the two belong to different areas, the business does not overlap.
China Securities Journal: In the future development of the company, how will the two main businesses of LED and integrated marketing be coordinated?
Hao Jun: The business foundation of Wanrun Technology's LED is solid, and the company will maintain the development of dual main business in the short term. In response to the development of the LED market, the company will adjust its business plan. If you choose some single products, relying on its original technical advantages, in the panel lights, fluorescent lamps, street lamps and other aspects to do single product breakthrough; vigorously develop EMC model, namely contract energy management business.
For integrated marketing, the company will continue to acquire M&A along the industry chain. However, the parallel development of the dual main business focuses on the integrated marketing (Internet advertising) business. The LED main business will maintain stable performance growth, provide stable cash flow for the company's transformation, and become the basis of the company's transformation.
Our wire harnesses are widely used for various parts of automobiles and truck , Like engine valve cover gasket/diesel gasket(DORMAN-FORD), headlamp(GROTE), Intelligent Anti-collision System(Mobileye), audio, rearview mirror, power seat, etc. Also the complete engine cable assembies for electric vehicle.
Related Products:ul wiring assembly,engine gasket cable,cable harness.
Automotive Wire Harness,Auto cable assemblies,OEM Automotive Wire Harness,Electrical Automotive Wire Harness,Wire Harness,Auto Wiring Harness,Engine Wiring Harness,Cable Harness,Ul Wiring Assembly
ETOP WIREHARNESS LIMITED , http://www.oemwireharness.com