How Does Wenhua Finance And Economics Break Through The "Ceiling" Of Growth?

Futures trading software companies, which had been boycotted by the industry, chose to rush to the gem again after nearly six years.

Recently, the official website of Shenzhen Stock Exchange announced that it has accepted the IPO application of Shanghai Wenhua Financial Information Co., Ltd. (hereinafter referred to as "Wenhua finance").

Public information shows that the sponsor of Wenhua finance and economics listing is Huatai United Securities. The IPO is all new shares. The original shareholders of the company do not offer shares to the public. The number of shares issued does not exceed 13.34 million shares, accounting for no less than 25% of the total share capital after the issuance. It is estimated that the company will raise 652.43 million yuan. The funds raised from the listing will be invested in the cloud quantitative investment software system development project, the new generation asset management system development project, the research institute construction project and the supplementary working capital of Wenhua finance and economics.

In fact, as early as November 2015, Wenhua finance and economics submitted IPO materials and applied for listing on the gem. At that time, the number of shares to be issued was no more than 13.34 million. However, in April 2018, the IPO road of Wenhua finance and economics was terminated.

After nearly six years, Wenhua finance and economics once again hit the gem and may face a completely different environment. The futures industry is a relatively small industry. Under the limited market volume, the previous mode of continuous price increase is difficult to sustain, and then the app of futures companies and competitors are chasing and blocking. How can Wenhua finance break through the "ceiling" of growth?

Changing fees for free to improve performance

For a long time, Wenhua finance and economics has been the largest futures trading software provider in China. The company's main business is to provide market data, trading and related information technology services to financial derivatives investors with trading software terminal as the carrier.

According to the information disclosed in the prospectus, by the end of 2020, Wenhua finance and economics has cooperated with 135 domestic futures companies, accounting for 90.60% of the total number of domestic futures companies. The number of monthly active users of Wenhua finance and economics PC terminal basic trading software is 628900, and that of mobile terminal portable software is 1347000. According to the company, the relevant data is in the forefront of domestic financial derivatives trading software, and the series of software has become the mainstream trading software in the financial derivatives market.

"Wenhua is a software that started to do futures data relatively early in China. The data is relatively accurate and the market reaction is fast. At that time, it was incomparable with other trading software, and there were not many competing software." There are senior futures trading personnel said.

In 2019, the financial performance of Wenhua suddenly began to improve significantly. In that year, the operating revenue was 210 million yuan, with a year-on-year increase of 56.58%. The net profit attributable to the shareholders of the parent company increased by 71.2% and the net profit reached 78.4368 million yuan.

Behind the substantial improvement in performance is the change in charges of Wenhua finance and economics.

In fact, the sharp rise of cultural and financial performance in 2019 has something to do with the company's main product "portable" charging.

"The company has taken the lead in the industry in collecting software service fees directly from end users, creating a new profit model in the industry," said Wenhua finance and economics prospectus

It is reported that before October 2018, the "portable" products of Wenhua finance and economics will not be charged to users, and they are free products. After October 2018, some function modules of portable finance will be charged in two ways: flow card and period card.

From the information in the prospectus, we can also find that in 2018, after charging for "portable" products in the fourth quarter, the products contributed a total of 14792100 yuan to Wenhua finance and economics in that year. By 2019, the revenue will directly rise to 78.7196 million yuan after full charge.

However, in 2020, the revenue and sales volume of "portable" products of Wenhua finance and economics began to decline. In that year, the revenue was 53.074 million yuan, a year-on-year decrease of 32.57%, and the sales of 168400 units decreased by 12%. This is closely related to the new consumption mode of "portable" products.

It is reported that after January 2020, the "carry on" charging mode will be adjusted to only use the period card mode for charging. Among them, the flow card charging mode refers to that the customer pays the software usage fee according to the number of hands of the transaction through the portable software, and the period card charging mode refers to the customer paying the software usage fee according to the time limit of the software authorization.

Wenhua finance and economics also said that thanks to the good reputation and high market share of the product in the free stage, the company's original portable app customers began to pay for the use, and the paid customers of the portable app reached the peak level in the reporting period in 2019. At the beginning of 2020, the company cancelled the charging mode of 0.2 yuan / hand flow card, resulting in some users with low transaction frequency and preferring to use small amount of flow card not to purchase the period card under the new charging mode, thus affecting the sales of portable app.

"At first, it was a dime for each hand, and then it rose to 20 cents. Finally, we canceled the charge by hand and directly paid for the month. Investors who trade less often are a bit unhappy. " The above-mentioned senior futures trading personnel also said, "Wenhua has increased the charges, but the service quality has declined. There are various requirements for installing software. Win10 system can not be used. It needs at least 4G memory and 20% space for C disk."

In addition, Wenhua finance and economics began to charge for trading information of foreign futures varieties, which also caused dissatisfaction among investors.

"In the past, external market quotations were free, but now they are given delayed quotations. If you want to make real-time quotations, you have to buy the data of each overseas exchange separately. For example, if you look at the data of the New York and Chicago futures exchanges as individuals, it costs 120 yuan a month. As a company, the data cost of an exchange alone will exceed 10000 yuan a year. " There are Beijing Securities Companies in charge of futures companies said.

However, from the company's revenue data, although the company continues to expand the range of charges, but this growth model is also difficult to sustain. In 2020, the net profit of the company's revenue will reach 192 million yuan and 75.7747 million yuan respectively, which will be slightly lower than the same period in 2019.

However, some investors said that the "moat" of Wenhua finance and economics was still there“ Now no matter which software looks at the external disk real-time data to charge, not only Wenhua. " Futures investors with securities business told the 21st century economic report that they had been "used to" Wenhua finance and economics for many years and would not give up using them because of these fees.

It was boycotted by futures companies

In addition to the investor disputes caused by the product fee reform, Wenhua finance and economics also encountered a collective boycott by futures companies.

On January 3, 2020, Guangzhou futures suddenly announced that among the Trading Softwares currently provided, Wenhua financial trading software (including Wenhua Yingshun, Wenhua portable, Wenhua Yingzhi, etc.) temporarily failed to meet the regulatory requirements. It also said that it would continue to follow up the rectification of Wenhua financial trading software. If the software still fails to meet the regulatory requirements before January 21, 2020, it will face the risk of discontinuation.

In response, Wenhua finance and Economics said that the actual situation is that the company has issued solutions, and has been sent to various futures companies, "but because of the technical upgrading requirements of penetrating supervision, economic investment is required, some small futures companies do not want to invest and refuse to upgrade. So individual customers of small futures companies that do not upgrade will be affected. "

The so-called "small futures company" of Wenhua finance and economics has angered the industry. CITIC futures, Yong'an futures, Huatai futures, Haitong futures, Nanhua futures, Guangfa futures, China Merchants futures and other domestic head futures companies have announced that they will close some software access restrictions including Wenhua finance and Economics on January 17 or January 20, 2020. As for the reasons for the suspension of Wenhua transaction access, each company expressed that it did not meet the penetration regulatory requirements.

"It's not easy to upgrade software according to the regulatory provisions. What the futures companies dislike more is that on the one hand, Wenhua finance and economics fails to meet the regulatory requirements, on the other hand, it allocates costs to futures companies on the ground of system upgrading." There are securities companies head futures company personnel think.

"In the past, the slogan of futures companies was" Wenhua finance and economics charges, I'll pay ", and provided instant information to investors out of their own pocket. Now "carry on" charges have begun to be charged. In recent years, the service fees paid by futures companies to Wenhua finance and economics have also risen sharply. Wenhua finance and economics collect money from both sides, which naturally causes market dissatisfaction. " The above securities companies are the persons in charge of the business department of futures companies.

Game dilemma of minority industries

The above-mentioned person in charge believes that Wenhua finance and economics did have an advantage in technology before, and its market share has been high due to its early establishment. On the other hand, the strength of domestic futures companies is still not strong. In recent years, the commission fees of futures trading have continued to decline. The operating pressure faced by futures companies makes them unable to bear the further compression of profits brought by the development of trading software.

Behind a series of disturbances, in fact, it reflects the development problems faced by the futures industry. The scale of the industry is limited, when there are enterprises in the industrial chain trying to expand their share, they will often face fierce interest game.

Under the pressure of many futures companies "ceasing to work", Wenhua finance and economics finally chose to compromise, saying that it had completed the middle platform system solution which could meet the requirements of penetrating supervision, and decided to provide all futures companies with a complete set of software products and related technical support for the midrange system free of charge.

Although he got away from the boycott, during the boycott period of Wenhua finance and economics, the trading software such as flush and big wisdom took advantage of the situation to insert. It even announced that "trading access is completely free" and occupied the space of futures trading market.

"After the Wenhua financial incident, futures companies are also expanding the scope of cooperation. Relative to the top companies, some companies have built capital software. Data support and operation are accessed by third-party service agencies, and are not limited to Wenhua finance and economics alone." There are East China futures company executives said.

"In the past, in the investment and education column, we often helped Wenhua finance and economics to do propaganda. Now we all recommend our customers to use our own app on the mobile terminal. We can use infinite easy to make options, and we can use the master of Boyi and the flush of flowers on the PC side." The person in charge of the above futures business department said.

At present, futures companies including CSCI futures, Huatai futures, founder medium term, Nanhua futures, Zhejiang futures and other futures companies are developing and promoting their own trading terminal software. According to incomplete statistics, the total number of relevant app products has exceeded 30.

The executives of the above-mentioned futures companies in East China believe that although Wenhua finance and economics still cooperate with more than 90% of the futures companies in the market, the development of new customers of Wenhua finance and economics will gradually encounter difficulties after the loss of the diversion of futures companies due to the fact that futures are originally a small number of varieties and the market space is limited.

Wenhua finance also said in the prospectus that the company's products and services are mainly concentrated in the field of financial derivatives trading, and the business field is relatively single. In order to maintain and enhance the company's core competitiveness and comprehensive strength, and enhance the company's anti risk ability, the company needs to constantly expand the scope of business areas to ensure its own competitive advantage. About 368 million yuan will also be used for the development of cloud quantitative investment software system and new generation asset management system.