Focus Tech.(SZ:002315)2022-12-08 09:20Business Overview - The company operates in three main areas: B2B foreign trade, B2B domestic trade, and B2C insurance. Recent performance shows a decline in revenue, primarily from China Manufacturing Network, due to unfavorable foreign trade conditions [1][2]. Foreign Trade and Market Conditions - Although the foreign trade situation appears stable, the industry is contracting, and companies are becoming more cautious. The previous reliance on information services has reached a ceiling [2]. - The company aims to help suppliers save costs by providing services that eliminate intermediaries, which currently take 30% to 40% of profits from Chinese products sold in the U.S. [3]. Domestic Trade and User Engagement - The domestic B2B segment has shifted from charging membership fees to evaluating performance based on software downloads and active user counts. The target is to reach 100,000 enterprise users, but this segment currently contributes no revenue [2][4]. - The 百卓 (Baizhuo) platform, previously known as MIC, has transitioned to offering free procurement software to attract small suppliers, with a focus on increasing active user engagement [4]. Insurance Sector Performance - The insurance segment has seen significant growth, but it is still below expectations. The company is focusing on online insurance, which has a large potential market but faces challenges due to low repeat purchase rates and regulatory constraints [2][5]. - The online insurance platform aims to achieve a scale of over $1 billion within five years, but currently holds a small market share due to limitations in car and life insurance sales [5][6]. Strategic Partnerships and Investments - The partnership with IMK aims to leverage the company's supplier resources to facilitate procurement for larger buyers, although no profits are expected in the first year due to system setup [4]. - The company is considering investments in online healthcare as a supplementary direction, while maintaining focus on its core businesses [5]. Future Development and Goals - The company plans to transform China Manufacturing Network into a comprehensive foreign trade service provider, integrating online and offline services, with a goal to increase platform transaction volume from $30-40 billion to $100 billion [6]. - Short-term financial pressures are manageable due to prior cash reserves, allowing for strategic investments that benefit long-term growth [6]. Mergers and Acquisitions Strategy - The company emphasizes that mergers and acquisitions should align with business synergies rather than merely enhancing short-term financial reports. The focus is on maintaining high market value without speculative practices [7].