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Mr. Youdao submitted the prospectus: 30% CEO weeks, 20.6% shares of Feng.

via:博客园     time:2019/10/1 9:02:46     readed:83

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Tencent Technology News, NetEase's youdao filed a statement on Monday with the Securities and Exchange Commission (FORM F / 1) and plans to raise up to $300 million through an initial public offering of (IPO). Youdao in the IPO did not disclose the amount of issuance, issue price range and other information.

NetEase owns 66.2 percent of NetEase youdao and is a controlling shareholder, with Ding Lei holding 30.1 percent of the shares, the largest individual shareholder, NetEase youdao CEO Zhou Feng holding 20.6 percent and NetEase youdao vice president Wu Yinghui holding 1.9 percent, according to the offering.

The funds raised by youdao will be used mainly to further invest in technology and product development, expand brand and marketing efforts, further expand the user base, and meet other general corporate purposes, according to youdao's IPO letter. Youdao applies for listing on the New York Stock Exchange under the symbol

Doctrine will adopt dual ownership structure. Class A and Class B common stocks are only different in terms of conversion and voting rights. Class A common stock can not be converted into Class B common stock; Class B common stock can be converted into Class A common stock. Class A common stock contains one voting right and Class B common stock contains three voting rights. The B class common stock holders include Zhou Feng, the company's controlling shareholder, chief executive officer and director of the company, and a few individual shareholders composed of the company's employees.

The well-known prospectus also shows that when the company's initial public offering is completed, private placement will also be carried out simultaneously. Some investment funds managed by institutional investors and Orbis have agreed to purchase a class a common stock of $125 million from the company at the issue price.

The following is a summary of the contents of the youdao prospectus:

Our business

What is the right way?

There is a way to make learning a reality.

For more than a decade, youdao has been developing and using technology to provide learning content, applications and solutions for users of all ages.

In the first half of 2019, youdao was China's leading intelligence learning company, with an average monthly average of more than 100 million visitors. Starting with online knowledge tools, youdao currently offers an accessible, reliable and reliable set of comprehensive learning products and services.

Today, for tens of millions of users, youdao is a must for finding words, translating foreign languages, preparing for exams and mastering new skills. Through technology, youdao enriches the lives of people of all ages every day, leading them on the journey of pursuing knowledge and sharing ideas.

What does Dao provide?

Youdao, which belongs to NetEase, a Chinese Internet company, was founded in 2006 to provide content, community, communications and business-centric online services. In 2007, youdao launched its flagship youdao Dictionary. According to Frost

The early success of Tao Dictionary has enabled Youdao to attract a large number of users, build a strong brand, and expand to a wide range of products and services to meet the lifelong learning needs of preschool, primary and secondary schools, college students and adult learners, including the introduction of learning products, learning services, intelligent devices and interactive learning applications. Series of products and services.

Awareness of online knowledge tools includes leading technical support for dictionaries, translation and writing tools. The tool is convenient, intelligent and powerful. Doctrine learning tools are mostly free, mainly through advertising to make money. As these tools become ubiquitous in people's lives, they can also help drive organic user traffic to streamlined online courses and other products and services.

Based on the popularity of youdao online knowledge tools, the company began to offer online courses, including youdao premium courses. Youdao excellent course is the flagship online course brand of youdao, with a strategic focus on primary and secondary school students, as well as NetEase Yun classroom and Chinese university MOOC. Youdao is broadcast live in

Tao also offers interactive learning applications that allow students to learn math, English and other subjects through virtual teachers on mobile devices. These interesting and effective applications combine AI teaching to cater to the learning habits of Daoist students. Through social media such as social networking, users can access these applications and share their activities with friends. In addition, the interactive learning application provides rich game functions, which can help to significantly improve the interest level of young students and promote their participation.

Youdao's products and services are based on a common set of core technologies that enable the company to use data insight from a single product or service to help optimize the entire product and service mix. Since its inception, great changes have taken place in youdao's business. Youdao has never stopped reimagining and innovating products and services. This is not only to cater to, but also to affect users' learning habits and lifestyles, achieve their goals, enrich their lives. Since its inception, the cumulative number of downloads of youdao applications has exceeded 1.3 billion, with more than 200 million registered students. All of these great achievements are driven by youdao technology. This is why youdao will continue to invest in technology and products for users and long-term success.

In the first half of June 30, 2019, Youdao's revenue reached RMB 548.5 billion yuan (about 79.9 million US dollars), an increase of 67.7% over RMB 327.2 billion yuan in the same period of last year; Youdao's net losses in the first half of 2018 and the first half of 2019 were RMB 82.8 million yuan and RMB 167.9 million yuan respectively (about 2450 million US dollars). Ten thousand dollars).

Youdao's net revenue in 2018 was 731.6 million yuan ($106.6 million), up 60.5 percent from 455.7 million yuan a year earlier, and youdao's net loss in 2018 was 209.3 million yuan ($30.5 million), up from a net loss of 163.9 million yuan a year earlier.

Market opportunity

Driven by mobile Internet, artificial intelligence and data analysis, intelligent learning in China is becoming more and more popular. Intelligent learning is characterized by the combination of technology with most aspects of learning and teaching process in order to cultivate a more personalized, interactive and adaptive learning experience. Intelligent learning companies can attract and profit from a large number of loyal users by providing a comprehensive and collaborative set of learning products and services.

China's intelligent learning industry is currently made up of online courses supported by artificial intelligence, intelligent knowledge products and services, and institutional learning solutions. In recent years, driven by the rapid development of technology, the industry has developed rapidly. Frost

In addition to the Chinese market, other countries and regions, such as India, Indonesia and South America, have also provided great opportunities for Chinese enterprises in the field of intelligent learning due to their large population, scarce educational resources and willingness to pay for education.

What makes youdao different?

Youdao believes that the following competitive advantages distinguish it from competitors:

  • Leading technology;
  • A large and loyal user base with trusted brands;
  • Products and services covering a complete learning journey;
  • Strong content development capability;
  • An extensible business model;
  • A visionary and experienced management team.

How to Face the Future

Youdao seeks to lead the development of China's intelligent learning industry through the following strategies:

  • Continue to invest in technology;
  • Improving content supply;
  • Develop and attract user groups;
  • Expanding overseas;
  • Enhance intelligent device products;
  • Serve more business customers.

Challenges faced

There are risks and uncertainties in achieving business objectives and implementing strategies, including the following:

  • Tao has a limited history of operating on the basis of integration, especially in some products and services. This may make it difficult to assess future prospects and risks and uncertainties associated with these products and services.
  • If youdao technology is not developed and applied to support and expand products and services, or if it fails to respond to the rapid changes in industry trends and user preferences in a timely manner, youdao may lose market share and the business may be significantly adversely affected.
  • It may not be able to effectively broaden the monetization channels of the company.
  • The success and future growth of youdao business will be affected by the market trend of user acceptance, technology and learning.
  • It may not be possible to improve or expand products and services in a timely, economical and efficient manner.
  • Youdao has lost money and may not be able to make a profit in the future;
  • Doctrine business depends on the sustained success of the brand. If we can not maintain and improve the recognition of Doctrine brand, its reputation and business results may be damaged.
  • Youdao needs a lot of capital to fund its operations and respond to business opportunities. If sufficient capital is not available on acceptable terms, or if sufficient capital is not available at all, the financial position and results of operations may be significantly adversely affected by sound business;
  • There are high operating capital requirements and operating capital deficits. If the operating capital deficit continues in the future, sound business, liquidity, financial situation and operating results may be adversely affected.
  • Some aspects of youdao's operations may not be seen as fully in line with China's regulatory requirements for online private education. In addition, youdao faces risks associated with uncertainty in the implementation of these requirements, as well as additional regulatory requirements and restrictions related to online private education;
  • If existing advertisers cannot be retained or new advertisers can be attracted, sound business, financial situation and operating results may be adversely affected.
  • Users may decide not to use youdao's products and services for a variety of reasons, including that their academic performance has not improved or that they are generally dissatisfied with the product, which may have a negative impact on youdao's business, financial position and operating results;
  • There may be no way to continue recruiting, training and retaining a sufficient number of qualified teachers and assistants.
  • If intellectual property rights are not protected, youdao's brand and business may be damaged;
  • There may be infringement claims related to third-party intellectual property rights from time to time.
  • Youdao faces fierce competition, which may lead to pricing pressure and loss of market share, and has a significant negative impact on the company's business, financial position and operating results;
  • It may not be possible to maintain or raise the level of tuition fees.
  • Youdao's quarterly operating results are likely to fluctuate, which makes it difficult to predict the company's performance and may cause its quarterly operating results to be lower than expected;
  • Without effective management of growth or implementation strategies, sound business and prospects may be adversely affected.
  • Any major disruption or failure to maintain the satisfactory performance, safety and integrity of the technical infrastructure will reduce the flow of visitors to the channel and may have a significant adverse impact on the business, reputation, financial situation and operating results of the company.
  • Failure to respond adequately and promptly to changes in China's examination system, admission criteria, examination materials, teaching methods and regulations may reduce the attractiveness of meaningful content, products and services to users and students.
  • Refund of course fees or potential refund disputes may have a negative impact on business, financial position and operating results;
  • It is likely that any negative publicity will be negatively affected by negative publicity. If negative publicity is involved, it can damage reputations and businesses if it involves the company, shareholders, directors, officials, lecturers, assistants and other employees and business partners, and the industry that operates.
  • Doctrine reputation and business may be adversely affected by user, student and employee misconduct, improper activities and abuse of Doctrine content, products and services, many of which are beyond the control of the company.
  • Youdao cannot guarantee that it will not be liable for any inappropriate or illegal content or legal or regulatory liability, which may make youdao liable and cause damage to its reputation;
  • Privacy issues or security loopholes related to channel platforms may lead to economic losses, damage the reputation of the company, prevent users from using proprietary products, and confront legal penalties and responsibilities.
  • Youdao is bound by various legal and other data protection obligations, and any failure to comply with applicable laws and obligations may have a significant negative impact on its business, financial situation and operating results;
  • In terms of licensing requirements for Internet audio-visual programs, Tao may face risks and uncertainties.
  • Failure to obtain, maintain or update other licenses, approvals, licenses, registrations or records required to carry out business in China may have a significant adverse impact on youdao's business, financial position and operating results;
  • Dominant business is affected by international operational risk.
  • Youdao may not be able to successfully develop or maintain relationships with key participants in the mobile industry, nor may it successfully develop or provide products and services that can make effective use of these operating systems, networks, devices and standards;
  • If sales and marketing activities cannot be carried out economically and efficiently, sound business, financial situation and operation results may be adversely affected.
  • The success of youdao depends on the continued efforts of the executive team and other key employees;
  • Doctrine may become the main body of harmful acts of third parties such as competitors, including complaints to regulators and public dissemination of malicious assessments of Doctrine business, which may have a negative impact on the company's reputation;
  • Youdao may not be able to successfully obtain synergies from acquisitions, as well as expected gains from short-term and future investments, strategic partnerships and acquisitions;
  • Owing to the operation of the company, it may be subject to lawsuits, accusations, complaints and investigations from time to time, and the reputation and operation of the company may be adversely affected.
  • Youdao advertising content may be punished and other administrative acts;
  • Although it is believed that there are sufficient internal control procedures at present, they still face the need for Sarbanes in 2002
  • As a listed company, the cost of youdao will increase, especially when the company no longer has
  • Some have given and will continue to give equity incentives, which may lead to an increase in equity-based remuneration expenditure;
  • Failure to pay adequate fees for various employee benefit schemes as required by Chinese regulations may result in youdao being penalized;
  • Increased labor costs in China may have a negative impact on sound business and operational results.
  • Youdao faces specific risks associated with leased real estate;
  • Any changes or interruptions in the characteristics and functions of the main social networks in China may seriously restrict the ability to continue to expand the user base, and the company's business may be seriously adversely affected.
  • The operation of youdao depends on the performance of China's Internet infrastructure and telecommunications network.
  • A serious or long-term downturn in China or the global economy may have a significant negative impact on the business and financial position of the company.
  • Youdao faces risks related to third-party payment processing;
  • There is no commercial insurance at present.
  • Youdao faces risks associated with natural disasters, extreme weather conditions, epidemics and other catastrophic events that could seriously interfere with the company's business;
  • The inaccuracy of user data and other assessments in measuring the company's performance may damage the company's reputation.

Key financial data:

Major financial data for the first half of 2019

  • Net revenue was 548.5 million yuan ($79.9 million), compared with 327.2 million yuan in the same period last year. Of this, net revenue from online courses was 228.2 million yuan ($33.2 million), compared with 158 million yuan in the same period last year.
  • Revenue cost was 389.6 billion yuan ($56.7 million), compared with 215.5 billion yuan in the same period last year.
  • Gross profit was 159 million yuan ($23.2 million), compared with 107.6 million yuan in the same period last year, and gross profit margins were 29.0 percent, compared with 32.9 percent in the same period last year.
  • Operating expenditure was 321.1 billion yuan (about 46.8 million US dollars), compared with 190.7 million yuan in the same period last year. Among them, sales and marketing expenditure was RMB 186.1 billion yuan (about 27.1 million US dollars), compared with RMB 94.3 million yuan in the same period last year; general and administrative expenditure was RMB 23.8 million yuan (about 3.5 million US dollars), compared with RMB 15.7 million yuan in the same period last year; R&D expenditure was RMB 112 million yuan (about 16.2 million US dollars), compared with the same period last year. The period is RMB 80.7 million.
  • The operating loss was 162.1 billion yuan (about 23.6 million US dollars), compared with 83.1 million yuan in the same period last year.
  • The net loss was 167.9 million yuan ($24.5 million), compared with 82.8 million yuan in the same period last year.
  • The net loss attributable to good practices was 168.4 billion yuan ($24.5 million), compared with 82.1 million yuan in the same period last year.
  • As of June 30, 2019, youdao had an average of 105 million monthly active users in the first half of the year, up from 93.1 million as of June 30, 2018.
  • As of June 30, 2019, the total number of high-quality course-paying users was 338,000, higher than that of 318,000 as of June 30, 2018.
  • As of June 30, 2019, gross bill income per paying student for youdao boutique classes was 751 yuan, up from 508 yuan as of June 30, 2018.

Major financial data for 2018

  • Net revenue was 731.6 million yuan ($106.6 million), compared with 455.7 million yuan a year earlier. Of this, net revenue from online courses was 329.4 million yuan ($48 million), compared with 115 million yuan in the same period last year.
  • Revenue cost was 515.1 billion yuan ($75 million), compared with 293.8 million yuan in the same period last year.
  • Gross profit was 216.5 million yuan ($31.5 million), compared with 161.9 million yuan a year earlier.
  • Operating expenditure was 435.6 billion yuan (about 63.5 million US dollars), compared with 292 billion yuan in the same period last year. Among them, sales and marketing expenditure was RMB 213 million yuan ($31.1 million), compared with RMB 136.4 million yuan in the same period last year; general and administrative expenditure was RMB 38.2 million yuan ($5.6 million), compared with RMB 22.5 million yuan in the same period last year; R&D expenditure was RMB 184 billion yuan ($26.8 million), compared with the previous year. In the same period, it was RMB 133.1 billion.
  • The operating loss was 219 million yuan (about 31.9 million US dollars), compared with 130 million yuan in the same period last year.
  • The net loss was 209.3 million yuan ($30.5 million), compared with 163.9 million yuan a year earlier.
  • The net loss attributable to good practices was 208.9 billion yuan ($30.4 million), compared with 133.6 million yuan in the same period last year.
  • As of December 31, 2018, youdao had an average of 96.4 million monthly active users in 2018, up from 73.7 million in 2017.
  • As of December 31, 2018, there were 643,000 high-quality course-paying users, up from 418,000 in 2017.
  • As of December 31, 2018, gross bill income per paying student for youdao boutique classes was 559 yuan, up from 363 yuan as of 2017.

Major shareholder

Prior to the initial public offering, youdao directors and executives held 53036358 common shares, or 53.7 percent of the total equity. Of these, Ding Lei holds 29751158 common shares, accounting for 30.1 percent of the total share capital, while Zhou Feng, the company's chief executive, holds 20341200 common shares, accounting for 20.6 percent of the total share capital.

As the first generation shareholder, he held 65387160 common shares of the company before the IPO, accounting for 66.2% of the total share capital. Zhou Feng is the second largest shareholder, holding 20,341,200 common shares, accounting for 20.6% of the total equity. (technology compilation / Ming Xuan)

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