Electronic paper book business giant loss Hanwang dizzy

According to the newly-announced 2012 annual report, the operating revenue of Hanwang’s electronic paper book business was 69.16 million yuan, a 77% drop from 2011, which accounted for 18% of the company’s overall revenue of 385 million. This proportion had exceeded 75% at its peak. If the retail price is 700 yuan (at Jingdong Mall, the current "hot" retail price of the two products is 999 yuan and 799 yuan respectively), Hanwang electronic paper books sold only 100,000 in 2012, not as high as Period of one month's sales. After the publication of the electronic paper book, Hanwang Technology (002362) is returning to the role of small and medium-sized technology companies.

For Hanwang, the electronic paper book business is now a bitter “chicken rib”. Its gross profit margin is only 10.31%, and the expenses are spread out and the losses are serious. In 2012, Hanwang's entire company's "net profit after deducting non-recurring gains and losses" was -11.11 million yuan, and its daily operations have already made serious deficits.

Hanwang seems to have been uninterested in electronic paper books, and its research and development focus has shifted to handwriting trajectory, text recognition, face recognition, digital reading and other four businesses. In the research and development of electronic paper books, the annual report of the company has been passed over. It merely states that "investments have been made in low-cost chips, front-light technology, and touch-control technology." If one day Hanwang Chairman Liu Yingjian completely abandons the electronic paper book business, the industry should not be surprised.

However, due to the "internal injuries" caused by the electronic paper business, the Han Dynasty still suffers so much that it has to sell its growth business for "convalescence."

In December 2012, Hanwang announced that it had signed an equity transfer agreement with Beijing Digital Zhengtong (300075) Technology Co., Ltd. and four natural persons and sold its wholly-owned subsidiary, Beijing Hanwang Zhitong Technology Co., Ltd.’s shares. Hanwang Zhitong and its predecessor Hanwang Science and Technology Intelligent Transportation Division have been engaged in the field of intelligent transportation and security for 13 years. Their license plate recognition and intelligent analysis technologies based on DSP (digital signal processing) are widely used in the field of traffic security, and the license plate recognition of highways The national market share of the system is nearly 50%.

This can be a star business of Hanwang. In 2011, revenue from smart transportation business increased by 68% year-on-year, which was the only increase in 2011 Hanwang's gross profit margin, when revenue from its main business e-paper book dropped by 75%. The intelligent transportation business increased its revenue from Hanwang's technology from 2% in 2010 to 8% in 2011, and its gross profit increased from 2% in 2010 to 21% in 2011. According to the 2012 Hanwang Technology Interim Report, the operating revenue of the industry application business increased by 128% year-on-year and the gross profit margin increased by 18% mainly due to the fact that the business of intelligent transportation maintained a sustained growth trend, while the total revenue of the company fell by 26% during the same period. As of the end of October 2012, Hanwang Zhitong had a contract with approximately RMB 109 million in unrecognized revenue and approximately 40 million orders that had been awarded but did not sign contracts.

This equity transfer brought about 120 million non-recurring gains to Hanwang, “modifying” its originally ugly financial performance.

Although Hanwang expressed that it will continue to deepen the intelligent interaction technology with pattern recognition as the core, it is committed to becoming a “world-class mobile interconnection technology and product provider with intelligent interaction as the core”, but in terms of its actual business units (industry applications, The performance of the OCR product line, portrait recognition and handwriting trajectory product lines can only be a good vision for the future. In its business portfolio, there is no single business revenue of more than 100 million yuan, and everything is still on the road.

Recall that in early 2010, Hanwang Technology issued 27 million shares at a price of 41.9 yuan per share, raising funds of 1.1 billion yuan. Chairman Liu Yingjian shouted out the "Zhuzhou Fortune 500" as a slogan and was prominent. Today, just three years, hundreds of millions of dollars in financing only results in a fireworks explosion.