After the resumption of trading, it soared more than 300%. A takeover offer drove Youju Holdings (01948) to “take off”?

On May 8, Youku Holdings (01948) resumed trading and once soared more than 300%, drawing great attention from the market. After the opening of the market today, the company's stock price rose rapidly. It reached a high of HK$4.8 in about an hour after opening, with a maximum trading volume of 90,000; in the afternoon, the company's stock price fell slightly and hovered around HK$3.5.

According to public information, Youku Holdings was listed on the Hong Kong stock market as early as November 2021, and fell below the issue price on the first day of listing. At the time of listing, the company's issue price was HK$6.7 per share, and the net capital raised was HK$749 million. However, the company's stock price has continued to decline over the past three years, and the trading volume is almost nil, and it has long since faded out of the public eye. Since '24, the stock price has been hovering around HK$1 for a long time, and it has almost fallen into the category of fairy stocks.

On the financial side, as of around 15:00 p.m., the biggest net purchase today was Bank of China International, which bought 205,000 shares, followed by Nagahashi and Yaocai net purchases of 57,000 shares and 45,000 shares respectively; in terms of sales, CMB International sold 184,000 shares, and still holds about 18 million shares of 3.06% on hand, followed by retail investors from Futu with a net sale of 74,000 shares. It can be seen that due to the long-term sluggish trend of the stock, retail investors did not have many chips in their hands.

Judging from the news, the current change in Youku Holdings' stock price is mainly due to an acquisition announcement.

The controlling interest was discounted by 41.7% and a full purchase offer was made

Established in 2017, Youku Holdings mainly provides one-stop cross-media online marketing solutions for advertisers and customers through media partners, especially online short video marketing solutions. The company's CEO Peng Liang served as senior vice president at Gome Electronics. He is mainly responsible for formulating marketing strategies for Gome Internet and has more than 15 years of marketing-related experience.

On May 8, Youku Holdings announced that Supreme Development, the original major shareholder, completed the sale of 50.62% of its shares to an independent third party Autumn Harvest Ltd (offender), involving approximately 304 million shares, at a total cost of HK$213 million, equivalent to HK$0.7 per share. After completion, the offender and its actors held a total of 72.71% of the company's share capital and were required to make a mandatory comprehensive offer, with a cash price of HK$0.7 per share, a discount of 41.67% over the closing price before the suspension of trading. The offeror intends to maintain the listed position of the company and plans to continue operating the existing business.

According to reports, the offender is an investment holding company whose issued share capital is directly owned by Mr. Cheng and 40% directly beneficial owned by Ms. Ma. The sole director of the offeror is Ms. Ma, the spouse of Mr. Cheng. Mr. Cheng has over 20 years of work and management experience in the Internet industry. She is the founder and general manager of Shanghai Zhishu Qifei Software Technology Co., Ltd.; Ms. Ma has worked for Baidu and Cheetah Mobile. He joined Youju Holdings in 2023 as Vice President of Marketing.

According to public information, the shareholder structure of Youju Holdings is highly concentrated. As of December 31, 2024, the company's founder Ma Xiaohui and Yu Juan jointly held 72.67% of the shares, and the first two held 90% of the shares in total.

The acquirer, Cheng Yu, is the founder and general manager of Shanghai Zhishu Qifei Software Technology Co., Ltd., a Feishu business ecological strategic partner under ByteDance, focusing on the three strategic tracks of digitalization, cloud computing, and artificial intelligence. The business not only involves Feishu's full ecological operation, but also includes four self-developed products grafted onto Feishu's base: Beacon System, TabLink, QIFEI, and Zhishu contracts.

Youju Holdings, which was acquired this time, has also cooperated with Feishu for a long time in business. As early as 2021, the company established a strategic partnership with Feishu, a subsidiary of ByteDance, to use Feishu as the core to combine private traffic operation products to help improve the efficiency of customer organizations and achieve their marketing goals.

According to the prospectus, Youku Holdings has a significant risk of dependency on ByteDance. The total bills generated through ByteDance's content distribution platform in 2018-2020 were 850 million yuan, 3.455 billion yuan, and 5.97 billion yuan respectively, accounting for 43.1%, 67.1% and 68.1% respectively; in recent years, its dependency risk has not improved. In the year ended December 31, 2024, the largest supplier accounted for about 54.2% of the company's total service and sales costs, and the five major suppliers accounted for about 95.7% of the total service and sales costs.

According to financial data, Youku Holdings' overall revenue fluctuations have increased slightly in recent years, while profits have declined significantly. Currently, the profit level has dropped by nearly half compared to 2020. For the full year of 2024, the company achieved total operating income of $9.156 billion, up 29.32% year on year; net profit to mother of $93.883 million, up 3.66% year on year; net cash flow from operating activities was -$298.54 million, compared to $812 million in the same period last year; basic earnings per share was $0.16, weighted average return on net assets of 6.55%, and the company's 2024 distribution plan was HK$0.04 per share.

The current change in control of the company may bring major operations such as business strategy adjustments, management changes, and even asset restructuring to Youku Holdings, which will directly affect the company's future development and subsequent trends. Considering the company's long-term low trading volume and poor profit performance, investors need to beware of the risk of speculation when entering the market.