Modern Avenue To Change The Company's Constitution, The Actual Control Of The Crown Is Cross Border Acquisition Of Trouble?

The controlling shareholder, the actual controller and the concerted action are restricted by high consumption.

In order to alleviate the pressure of depreciation and amortization cost of 23 million per year, the modern Avenue is now selling the headquarters building at two degrees. The company announced in August 8th that it would sell it, but it was sold at the 40 percent off sale price in 2018.

The decline in performance was serious. Four of the company's seven directors left, and even the company's real controller Lin Yongfei was asked to resign as chairman. The chief financial officer resigned after 5 months' work.

Are cross border acquisitions provoked?

In August 16th, morden Avenue announced the announcement of shareholders' receipt of enforcement notice and restriction of high consumption order. According to the announcement, the controlling shareholder of Ruifeng group is actively communicating with the relevant creditors and negotiating the solution. The company may follow the risk of the change of the actual controller and controlling shareholder.

Before that, the modern Avenue announced that it would sell its headquarters building for nearly ten years.

　　 40 percent off sale headquarters building

In August 8th, morden Avenue issued the notice on signing the agreement on the sale of assets. The announcement stated that the modern Avenue will be transferred to the Guangzhou Jian Kang Sports Culture Development Co., Ltd. (hereinafter referred to as "cultural development company") with the price of RMB 950 million yuan.

However, according to the two front and back sale plans of the headquarters building, the valuation difference of the headquarters building is not small.

In fact, in October 2018, in the announcement of major asset restructuring plan, morden Avenue planned to sell related assets and liabilities to headquarters of Ruifeng group. Based on the asset based approach, the estimated value of assets and liabilities of the headquarters building is about 1 billion 520 million yuan. But at that time, the property right certificate of the headquarters building was still in process and has not yet been obtained and is in a state of mortgage.

The estimated price last year was 1 billion 520 million yuan, compared with the selling price of the recent announcement of 950 million yuan, equivalent to 40 percent off big sale.

But why is it that the headquarters of the modern Avenue will move in less than a year?

Because of its unique shape, the modern Avenue headquarters building has been regarded as one of the landmark buildings and punching places of Guangzhou Science City. As early as December 2009, morden Avenue signed the contract for the assignment of the right to the use of state-owned construction land with the Guangzhou land resources and Housing Authority, and bought the site as the comprehensive building site of the company's R & D creative center and clothing exhibition center, until the assets of the headquarters were completed in November 2007. Modern Avenue moved to headquarters for office in the same year.

But in less than a year after moving to a new house, the modern Avenue felt like pins and needles.

In the recent announcement, the modern Avenue said that the transfer of the headquarters building is aimed at strengthening the allocation of resources, improving the efficiency of resource utilization, and promoting the better development of main business. In fact, the headquarters of the modern Avenue has large assets, and the new depreciation and amortization costs are relatively high after completion.

When the modern Avenue was relocated to the new headquarters office, the office space usage fee (including property management fees, utilities and so on) and office space depreciation fees amounted to 9 million 180 thousand and 500 yuan only during the six months of 1-6 months in 2018, which increased by 4 million 353 thousand and 200 yuan compared with the same period in 2017. At the same time, headquarters related assets as the company's own property, compared with the lease, assuming that the relevant assets are completed acceptance, the annual depreciation and amortization costs are 23 million 36 thousand and 500 yuan.

By contrast, it would be more appropriate to choose a modern avenue after the transfer. After the completion of the transaction, a heart disease in modern Avenue can be solved. And it also helps to improve the company's asset utilization rate, and more funds are used in production and operation.

But it is noteworthy that the transaction is expected to achieve a profit of about 10 million yuan to 30 million yuan. Compared with the net profit of 27 million 854 thousand and 700 yuan and the first quarter net profit of 37 million 559 thousand and 300 yuan in 2018, it has a certain effect on improving the company's 2019 performance. However, it is not yet clear whether the profit will enter the 2019 year.

And the transaction may lead to a lower than 60% of the income of the new high road, and the high and new technology enterprise qualification and related preferential tax policies will also be affected.

As a result, the red eyed card was played as a "hot potato" in the hands of the owners.

Decline in performance, personnel changes

The modern Avenue is a Limited by Share Ltd set up by Guangzhou Yi Shi Lu trade Co., Ltd. in December 25, 2008. Its total share capital is 75 million shares. In February 28, 2012, the first public offering of modern Avenue was listed on the Shenzhen Stock Exchange.

In the following year, the performance of big Boulevard on A shares has changed dramatically. It is thought that the performance will continue to climb after the listing. The performance of those who wanted to go on the market was already the peak of the more than 10 years of modern Boulevard, and has been declining since then.

In the year of listing, the operating income of modern Avenue reached 636 million yuan, an increase of 37.86% over the same period last year, resulting in a net profit of 177 million yuan, an increase of 61.72% over the same period last year. Although the next year's revenue increased slightly, the net profit fell by 15.56% over the same period, and has been declining since then, or even 2908.90% in 2016. The continued decline in net profit has led to the sinking of modern Avenue.

In 2018, 5 of the 9 main subsidiaries of modern Avenue lost money. In June this year, it was announced that the controlling shareholder, Ruifeng group, the actual controller and its co operative shareholder may be passively reduced due to the stock pledge financing matters, or account for 13.28% of the shares held by them.

But its subsidiary was pleased that last year the cost of advertising was 268 million yuan, accounting for 95% of the total operating cost. Operating costs increased by 7.81 times compared with the same period last year, while operating income increased by only 2.47 times.

The outside world has been speculating whether Yuet's heart is trying to fulfill its promise performance by crazy advertising, but if the company goes on like this, the impairment of goodwill may happen.

It is noteworthy that the net assets of the modern Avenue, the card international road limited and the modern fashion Agel Ecommerce Ltd are negative.

Meanwhile, in the six months, 6 executives fled, and the chief financial officer resigned in 5 months.

Most notably, the announcement shows that 4 directors of Lin Yongfei, Weng Wuqiang, Hu Shengji and Liu Wenyan have submitted written resignations recently. Lin Yongfei is the real controller of modern Avenue.

However, the board of directors of the modern Avenue consists of 7 directors, which means that most of the board of directors of the company needs to be checked by elections.

In August 8th, the modern Avenue announcement amended the articles of association and amended the chairman of the original Ordinance as the legal representative of the company to be the legal representative of the general manager.

Cross border acquisitions play "slip"

In the early days of modern Avenue, the decline in performance was due to the depression of men's clothing market, so they chose to embark on the road of corporate transformation.

In 2015, modern Avenue began to build its own network business platform, and the platform was launched in 2016. But in the Jingdong, Taobao, Amazon and other well-known business platform competition, modern Avenue is hard to get ahead. This road of transformation has not opened up its own road.

Therefore, the modern Avenue has sprouting new ideas and playing cross-border mergers and acquisitions.

In October 2016, morden Avenue acquired 490 million stake in Yuenan 100% by issuing shares and paying cash, and raised matching funds of 230 million yuan at the same time. Yuenan is mainly engaged in the development and operation of mobile Internet applications, and its subdivision industry belongs to the development and operation service business of mobile Internet social networking tools. After the acquisition, the modern Avenue can better integrate the resources of both sides and enhance the comprehensive strength.

In fact, the modern Avenue is actively promoting the company to embrace the "Internet +" fashion industry, and to start its own cross-border acquisitions in the international market.

The cross border mergers and acquisitions stalls are too big, the modern Avenue opens the burn money mode.

After acquiring a series of O2O projects and international fashion brands, the modern avenue that wanted to get through the online and offline collaborative roads was miscalculated. The 2016 annual report shows that the net profit of O2O project is a loss of 41 million 467 thousand and 500 yuan, and the net profit of the Italian big LEVITASS.P.A.51% equity acquisition and DirkBikkembergs brand marketing network construction is 17 million 588 thousand and 800 yuan loss. The road of transformation is not easy.

Therefore, in 2017, morden Avenue announced its sale to its subsidiary company Cafu (Hengyang) commercial plaza limited.

The 2017 annual report of the modern Avenue shows that net profit from the net profit is 146.94%, up from the same period last year. In fact, this does not mean that the modern Avenue is coming back to life and the results are getting warmer. Instead, the sale of a controlling subsidiary at the beginning of the year, which generated nearly 100 million yuan of investment income, made the 2017 performance of modern avenue a flash in the pan.

Soon, in the first quarter of 2018, net profit was 37 million 408 thousand and 700 yuan, down 61.54% from the same period last year.

Modern Avenue announced recently that the Zhujiang accounting firm, which has worked with them for many years, will replace it in the 2019 annual report and the internal control audit project.

After the setback of the main industry, it was thought that cross-border mergers and acquisitions could bring the company back to life, but it was rejected. The way of cross-border transformation and acquisition of modern Boulevard ended in twists and turns.