Though completing the provision for selling ScaleLab, the incident with YouTube keeps driving Yeah1 lower (code: YEG) to now stand at VND37,000 ($1.6), losing three quarters of its value since March.
|The YEG stock is currently at VND37,000 ($1.6) |
Local media company Yeah1 Group has just set 50 per cent provision, equaling VND139 billion ($6 million), for receivables related to the capital transfer at ScaleLab LLC.
At the same time, the management board has also acclaimed the establishment of a 51-49 per cent joint venture company with a South Korean partner with the charter capital of VND14 billion ($609,000). According to Yeah1, the venture company will focus on developing platforms for celebrities.
In the middle of March, YouTube accused Yeah1’s multi-channel network SpringMe that some of its channels violated its policies. This led to the global video platform stopping work with all Yeah1 subsidiaries running YouTube AdSense like Yeah1 Pte., Ltd. and ScaleLab LLC.
YouTube’s cancellation evaporated Yeah1 Group’s market value by more than VND1 trillion ($43.48 million) within two days.
Regarding the failure in partnership with the global video platform, Nguyen Anh Nhuong Tong, chairman of Yeah1, said at the company’s shareholder meeting in May, “Don’t build a house on other people’s land." Due to the failure, the firm only set a 19 per cent revenue growth target for 2019, a marked reduction against the previous years’ 60 per cent. “In my 41 years of life, I have never seen so many upheavals,” Tong said. “It will take at least six months to overcome the difficulties.”
“Yeah1 uploads about 400 hours of video content a day, which equals all other Vietnamese channels combined. Fast growth brings huge risks – and the problem with YouTube is a valuable lesson for us,” Tong added.
Accordingly, Yeah1 set the target of reaching VND2 trillion ($86.95 million) in revenue and VND180 billion in profit in 2019, up 19 and 10 per cents on-year. As of the end of the first quarter of 2019, its net sales hit VND387 billion ($16.82 million), up 17 per cent on-year. However, after-tax profit was only VND8 billion ($347,826), a sharp fall against the VND29 billion ($1.26 million) in the same period of last year.
Its accumulation of the 2019’s first nine months recorded VND1.014 trillion ($44 million) in revenue and VND230 billion ($10 million) in net losses. As of the end of September, Yeah1's cashflows reached VND80 billion ($3.5 million), while bond investments were VND140-billion ($6-million), and bank deposits were VND470 billion ($20.4 million).