In 2020, the National Market Regulatory Authority organized 139 national monitoring of product quality. Throughout the year, a total of 17968 products were tested for the production operations of 16792 enterprises, and 1798 of 1729 enterprises were found to be unqualified, with a sub-qualification rate of 10.0 per cent.

Of these, 396 products produced by 4 395 enterprises were sampled every year in the home industry, with a sub-qualification rate of 16.2 per cent, a decrease of 3.5 per cent over 2019.

Ablution furniture product is less than 10 per cent; sand and wooden furniture products are less than 10 per cent and 20 per cent; and palm fibre elastic mattresses are less than 20 per cent.

The main disqualification of palm fibre elastic mattresses, among others, is the durability requirement, and the quality problem is due mainly to the use of poor quality raw materials by enterprises, or to inadequate production processes, suppression of raw materials and insufficient time, leading to inadequate core support.

The major disqualified projects in sand hair are the process of product use, power performance, safety performance, and quality issues. One is the use of wood plunges in part of the enterprise, which should have been abandoned in sand, metal pipes with thickness, stain stainium, etc.; and the incomplete understanding of standards by some enterprises, the lack of understanding of flammability requirements and the lack of clarity on the normal place of use of the product.

The main underqualified projects for wooden furniture are dynamic performance, carpentry requirements, superficial properties, etc., which are the main causes of quality problems, i.e., the non-extension or coating of some enterprises for the cost of production, at the bottom or later side of the furniture, and the use of less-quality pumping and surface jewellery materials, etc.; and the lack of rational design of the furniture product by some enterprises, without taking full account of safety and stability requirements.

Author | qingfengmingyue editor | Jue Jue

Coo resigned, the loss has expanded year by year in the past two years, and the share price has fallen like a broken kite. A series of “face changing” events are dizzying.

What happened to Youke?

The halo of the gold lettered signboard “first cloud computing” on the top of the scientific innovation board has been on the market for 2 years and 4 months. At present, it is obvious that it has reached the crossroads that determine its future destiny.

Share price “face change”

Founded in 2012, youkede is a leading neutral third-party cloud computing service provider in China.

In January 2020, youkede registered on the science and innovation board, and the stock issue price was 33.23 yuan, which reached 126.3 yuan at the peak of the stock price. However, it has fallen all the way since then. Now its lowest share price is 11.82 yuan, only 35.6% of the issue price, with a maximum decline of more than 90%.

Although the sci-tech innovation board index fell the most by 54.8% in the same period, many companies listed in the same period as youkede are still rising. The decline of youkede is completely unexpected.

For cloud computing companies such as youkede, the A-share market generally adopts income valuation indicators such as enterprise value multiple (EV / s) and market sales ratio (P / s).

After youkede’s listing, its revenue increased by more than 62% and 18% respectively in 2020 and 2021, and its revenue increased rapidly. However, the stock market did not measure its value according to the income valuation indicators. Is it the “face change” of the market?

The cloud computing industry is really different.

Amazon was the first to go to the cloud in 2008. In 2010, Ma realized that it was one of the main strategic directions for the future development of enterprises. Alibaba cloud came into being, and the domestic cloud market began to compete.

Youkede was founded early, established a firm foothold in the field of cloud computing with the strategy of neutral cloud manufacturers, and achieved vigorous development in 2015-2018.

However, in recent years, the industry has begun to gradually concentrate on top cloud manufacturers. Giants such as Alibaba cloud, Tencent cloud and Huawei cloud have formed the first echelon and continue to erode the market share of other manufacturers.

Due to its lack of advantages in infrastructure services and value-added services (SaaS), Youke’s market share has been eroded and its ranking has been declining.

According to the report previously released by IDC, youkede’s share in the public cloud market continued to decline, with 4.9%, 4.6%, 4.3% and 3.4% from 2015 to 2018 respectively. Since 2019, it has fallen out of the top five and is no longer listed separately. It is classified as “other” together with other manufacturers.

The market share is constantly squeezed, and the brand value of Youke is greatly reduced. However, what hurts investors most is the change of performance.

According to the data, youkede continued to make profits in 2017, 2018 and 2019 before its listing, which changed after its listing. The net profits of youkede in 2020 and 2021 were - 349 million yuan and - 633 million yuan respectively, and the loss in 2021 increased by more than 70% year-on-year.

In fact, youkede also suffered losses in 2015 and 2016, including a loss of 210.862 million yuan in 2016. Perhaps in order to realize the listing as soon as possible, youkede made profits for three consecutive years from 2017 to 2019.

After youkede was listed in 2020, the sales expenses, management expenses and R & D expenses have increased significantly year by year, and the cost rate has also gradually increased. In 2020, 2021 and the first quarter of 2021, it was 22.61%, 26.44% and 34.28% respectively.

In contrast to the continuous expansion of the company’s losses, youkede’s revenue continued to grow, reaching 2.455 billion yuan and 2.901 billion yuan respectively in 2020 and 2021, with a year-on-year increase of 62.06% and 18.17% respectively.

It doesn’t bode well to increase income without increasing profits.

Low gross profit

At the beginning of the founding of youkede, COO Huakun specifically mentioned in an interview with the media that the company is a neutral cloud manufacturer. It will not confront Alibaba cloud, Tencent cloud and other giants head-on. It will differentially choose waist customers with price advantage and head customers who can give play to neutrality.

With this business idea, youkede stepped on the vent of the rise of the mobile game industry in 2013, quickly intervened in the waist of the industry, and soon won the leading position of neutral cloud manufacturers in the industry.

When youkede goes public in 2020, it coincides with the outbreak of the new crown, and the demand for Cloud Computing in various industries such as audio and video, online education, remote office and games is expanding rapidly in the short term.

In particular, the head companies in various industries have a strong demand for Cloud Computing Based on the requirements of data security and independence.

During the epidemic period, Alibaba cloud and Tencent cloud achieved several times of growth. Youkede also saw the huge business opportunities and wanted to take a share from the giants, rapidly expanding the scale of cloud distribution and other businesses.

According to its prospectus and annual report, the revenue scale of youkede from cloud distribution business has expanded from 20 million yuan in 2016 to 805 million yuan in 2020, and its proportion in the company’s revenue has also increased from 3.88% to 32.80%, which has an important “contribution” to the growth of the company’s operating revenue.

However, this rapid growth in revenue stems from the business strategy of giving priority to the substantial price reduction and expansion of market share, which is quite different from the business philosophy of “giving priority to the expansion of market scale and giving consideration to a certain profit space” promised to investors when youkede was listed in 2020.

To grab food from the giants, Youke relies on the sharp price reduction of products, which also leads to a sharp decline in the gross profit margin of sales.

In 2019, the gross profit margin of youkede was 29.04%, but by 2020, the gross profit margin will be reduced to 8.55%.

In 2020, although youkede controlled expenses by reducing costs, its operating profit and net profit were negative due to the significant reduction of gross profit margin.

The expansion of business scale such as youkede cloud distribution has made its public cloud revenue grow rapidly.

In 2020, the revenue of youkede public cloud was 1.804 billion yuan, a year-on-year increase of 50.6%, accounting for 73.48% of revenue. The gross profit margin of public cloud was 5.84%, 25.41 percentage points lower than that in 2019.

Attract customers by price reduction strategy