After the U.S. listed company Luckin Caffeine made a financial fraud announcement，Similarly burning money for expansion、Chinese concept stock companies whose profit prospects are still unclear are being scrutinized by the capital market under a "magnifying glass"。

188bet online sports betting (NYSE: DNK), which was listed in the United States in January this year, did not encounter good times。After the Ruixing incident continued to ferment on April 2，188bet online sports betting stock price continues to fall，Down 11 on the day.73%，Falled again to 23 on April 6.03%，The closing price is 5.USD 85/share，Compared to the listing price 13.USD 50，Falled 56 in two months.67%，The stock price has been cut in half。

For long-term rental apartment companies that “enclose their territory”，The risk of high leverage goes hand in hand。Recently，Many landlords reported to reporters of China Business News，Received messages from 188bet online sports betting one after another requesting to terminate the contract。Meanwhile，Some tenants also reported that 188bet online sports betting unilaterally required them to cancel or change their lease。

The "second landlord" model is not complicated，But 188bet online sports betting is like a dancer walking on a tightrope，If the high-cost operating model cannot form economies of scale，On the contrary, it will lead to a significant expansion of losses。Under the influence of the epidemic，Loss of tenants in 188bet online sports betting，Insufficient self-hematopoietic ability，Contradictions become more prominent。

Loss of tenants, 188bet online sports betting cancels lease and terminates contract

After disclosing the first annual report after listing，It was revealed that 188bet online sports betting successively terminated its contracts with the landlord，Message requiring the tenant to cancel or change the lease。

Previously，188bet online sports betting was once affected by the rent-free plan，Caught in a public controversy over landlords and tenants "eating from both ends"。Recently，Many landlords reported to reporters，“188bet online sports betting called and asked to cancel the lease，The reason is that I can’t pay the rent。”

End of March this year，Shenzhen landlord Luo Ting received a call from Eggshell Butler，The other party claimed that the company would not pay the rent for April，And request to terminate the contract。The termination conditions given by 188bet online sports betting include compensation for one month’s rent and deposit，But the furniture in the house will be taken away by 188bet online sports betting。

Luo Ting told reporters，“In accordance with the provisions of the contract，Two months’ notice is required to terminate the contract，188bet online sports betting told me at the end of March that the contract would be terminated in April，This is not in compliance with the contract。”

Another landlord Liu Xue said，Not long ago, the staff of 188bet online sports betting also asked her to terminate the contract，And gave two termination plans: one is to terminate the contract in accordance with the contract，188bet online sports betting compensated her with two months’ rent，But the remaining rent of the month must be refunded，Return other furniture and appliances to 188bet online sports betting；Another option is to terminate the contract through negotiation，Refund one month’s deposit，Use home appliances to deduct outstanding water, electricity and gas bills。

The above staff told Liu Xue，If neither option is accepted，188bet online sports betting will send a lawyer’s letter to force the termination of the contract within two days。“A lawyer’s letter was actually sent later。" Liu Xue said。

188bet online sports betting did not clearly inform the landlords of the specific reasons for the termination。But Chen Jun, the housekeeper of 188bet online sports betting who was hooking up with Luo Ting, revealed some information to her，"You will definitely not be able to pay for your house，The company has no money to rent。”Chen Jun also said at the time that he was about to leave his job。

The reporter contacted Chen Jun to inquire about the situation，He said he didn’t know the reason for “terminating the lease”。Mentioned the idea of ​​resigning，Chen Jun told reporters，He joined 188bet online sports betting at the end of 2019，“Due to heavy work tasks，Too much pressure，That’s when I came up with the idea of ​​resigning。Affected by the epidemic，Not many people will rent after the New Year，Less work pressure，So I decided to stay。”

“When there is no epidemic，Taking clients to see houses every day，The schedule is full，Almost no one comes to 188bet online sports betting a house now。" Chen Jun said。

Loss of tenants due to the epidemic，It is already a big challenge for the “leverage” expansion of Danke Apartments。Meanwhile，The tenants have not received “preferential treatment” from 188bet online sports betting。

A tenant reported to the reporter，Recently forced to "quit" or change 188bet online sports betting。

Xu Ying, an apartment tenant in Beijing, told reporters，Recently received notification from 188bet online sports betting，Due to business adjustment，Need to rearrange her residence，Ask her to choose to quit or change the lease within 15 days，188bet online sports betting will provide corresponding compensation measures。

Xu Yingcheng，"According to the contract，Either party needs to notify the other party 30 days in advance to terminate the contract，188bet online sports betting’s move obviously violated the terms of the contract。”During the communication process between Xu Ying and 188bet online sports betting，Eggshell representation，If you do not cancel the lease or change the lease within a certain period，House door lock may not work，Affecting residence。

“The company has no plans to return the lease one after another，House-based basic operations，Some contracts need to be terminated，This is not a common situation。”For the above situation，The person in charge of 188bet online sports betting responded to the reporter’s interview，“Both parties to the contract have the right to terminate the contract，If it is 188bet online sports betting, please bring it up，Compensation will be provided in accordance with the contract。If there is a tenant in the room to be terminated，Will handle it properly。Replacement tenant，Give 2 months rent compensation and moving expense subsidy。If the tenant chooses to quit the lease，One month’s rent compensation will be given。”

As an emerging business format，Regulations on the long-term rental 188bet online sports betting industry are not yet fully developed，The company’s “contractual spirit” has been repeatedly questioned by users。

Data display of third-party service platform，The number of complaints from 188bet online sports betting far exceeds that of Ziroom Apartment, another industry leader。As of April 8，On 21CN “Ju Complaint”，The number of complaints about 188bet online sports betting reached 1238，Ziru is 275 pieces，Qingke Apartment, also listed in the United States, has 1,604 units；On "Black Cat Complaint"，The number of complaints about 188bet online sports betting reached 9315，Ziru is 1453 items，Qingke Apartment is 4384 items。

It’s worth noting，December 2019，The rental rate of 188bet online sports betting increased from 86 in September 2019.9% down to 76.7%。Financial report points out，Affected by the epidemic，The occupancy rate may continue to decline in the first quarter of this year，188bet online sports betting takes the initiative to adjust the number of apartment units，The number of apartments operating at the end of March was lower than that at the end of December 2019，In addition, the purchase and renovation of apartments will be slowed down。

Monthly income per room decreased by 131 188bet online sports betting

Sky Eye Check Data Display，188bet online sports betting has more than 8 rounds of equity financing alone，Financing amount exceeds 7 billion yuan，But the net loss last year was as high as 34.In the case of 3.7 billion yuan，Their financial situation is still not optimistic。

2019 financial report data display，During the reporting period, 188bet online sports betting’s annual income was 71.2.9 billion yuan，166 year-on-year increase.5%。Significant increase in revenue due to business expansion。Net loss during the same period 34.3.7 billion yuan，Net profit margin is -48.2%；Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) is -19.2.2 billion yuan，Loss rate narrowed by 3.5 percentage points。

From a full-year perspective，The main reason for the significant increase in the net loss of 188bet online sports betting is the expansion of business scale，The growth rate of operating costs and operating income is almost the same，The scale effect has not been further reflected，Fell into the vicious circle of "expanding while losing money"。

2019，188bet online sports betting’s operating income is 71.2.9 billion yuan，166 year-on-year increase.5%。including rental income of 6.4 billion yuan，89% of revenue.77%。However，The rental cost reached 63 during the reporting period.9.9 billion yuan，194 year-on-year increase.74%，Add depreciation and amortization、Sales and Marketing Expenses、Other business expenses and other expenses，The operating cost of 188bet online sports betting reaches 102.7.6 billion yuan，38 compared to last year.9.3 billion yuan growth 163.96%。

In other words，188bet online sports betting has not yet entered the "scale effect"，And the decline in rental income is a potential hidden danger。

2019，The average monthly rental cost of 188bet online sports betting is 1,546 yuan/room，Reduced by 91 yuan from 1637 yuan/room in 2018。Judging from the difference between rental income and costs，The average revenue per rental house in 188bet online sports betting is declining。

Danke’s operating model is to obtain housing from landlords，Packaged and rented together，Plays the role of “second landlord” in the market，The profit mainly depends on the difference between the rental cost and the rent。2018，The rent difference earned by each room in 188bet online sports betting is 715 yuan/month，The rent difference earned in 2019 dropped to 584 yuan/month，Income per room decreased by 131 yuan/month。

For expansion in 2019，Gao Jing, co-founder and CEO of 188bet online sports betting, said: “We maintained rapid growth momentum in the fourth quarter and full year of 2019。We expand our business to Suzhou、Wuxi、Xi’an and Chongqing，Covering 13 cities across the country，This is further evidence of our ability to successfully replicate across cities，These achievements have driven significant growth in the company’s revenue。”

During the reporting period，Beijing、The number of apartments in Shanghai and Shenzhen is about 22.40,000 rooms，46 year-on-year increase.6%，The number of apartments in other cities is nearly 21.50,000 rooms，156 year-on-year increase.1%。From a unit cost perspective，188bet online sports betting has indeed achieved certain results in its expansion in cities beyond the first tier。

Previously，The reporter also learned through interviews，188bet online sports betting usually obtains housing from landlords at a price higher than the market price，Aiming to capture the market quickly。

188bet online sports betting stated in the annual report，According to the current market and operating conditions，The company expects revenue in the first quarter of 2020 to be between 1.9 billion and 2 billion yuan。Affected by the epidemic，There is still huge uncertainty。

The ubiquitous “leverage”

For long-term rental 188bet online sports betting companies that “enclose their territory”，The risk of high leverage goes hand in hand。Under the Internet logic of early money-burning expansion，If a company fails to achieve sustained profit growth through economies of scale，Under a high-cost operating model，Loss will continue to expand in the short term，And funds are "life-saving straw"。

According to incomplete statistics from reporters，Except for listing and financing，188bet online sports betting since its establishment in 2015，Was funded through crowdfunding、Equity Financing、Rent loan、Expand capital through ABS and other methods。

188bet online sports betting’s “leverage path” has already been revealed。The reporter learned this from the official website of Beijing Zhongcaike Network Technology Co., Ltd. (hereinafter referred to as Zhongcaike)，In 2016, 188bet online sports betting issued more than ten asset package financings on the crowdfunding platform，The amount ranges from tens of thousands to hundreds of thousands of yuan。188bet online sports betting stated in the road show at that time，188bet online sports betting generally pays the landlord by depositing one and paying three。from this，Crowdfunding financing is to obtain financing based on the expected net cash inflow under the asset package，As a start-up capital for a new house。

After entering 2017，188bet online sports betting has begun to gain favor from many well-known venture capital institutions，Achieved 5 rounds of financing before going public，The cumulative financing amount exceeds 6 billion yuan。

Prospectus Disclosure，The senior management team represented by founder and CEO Gao Jing directly holds shares 48.7%，Among the major external investors，Tiger Global Fund holds 20%，Pleasure Capital 15.7%，KIT Cube Limited, a subsidiary of Kaiwu Investment, holds 10 shares.4%，Ant Financial 8.7%。

It’s worth noting，As the second largest institutional investor of Luckin Coffee，Joy Capital has recently suffered financial fraud incidents，Already at the forefront of public opinion。Qixinbao Venture Capital data display，Joy Capital since 2014，A total of 60 foreign investments，Among them，Voted for the travel industry 9 times，And Luckin Coffee founded by China Department。You can find it by combing，Many companies invested by Joy Capital have similar characteristics，Including Luckin Coffee、NIO、188bet online sports betting Apartments are all at a loss，Large amount of financing and rapid listing。

Except equity financing，Another main source of funds for 188bet online sports betting is rental loan。188bet online sports betting’s prospectus display，First 9 months of 2019，The rent advance payment obtained by 188bet online sports betting through the "rent loan" model，Accounts for 80% of the rental income of 188bet online sports betting。2017 and 2018，This proportion is also as high as 90% and 88% respectively。

Financial report points out，Interest expense related to rental financing increased from 1 at the end of 2018.5.3 billion yuan increased to 2 by the end of 2019.4.1 billion yuan，The average rental loan interest rate in the past three years is 5.7%，Once a large number of tenants terminate early or fail to make monthly payments，188bet online sports betting must return the prepayment for the remaining lease period to the financial institution，This will exacerbate the company’s cash flow problems。

In addition，by the State Administration for Market Regulation on December 13, 2019、CBRC、The "Opinions on Rectifying and Standardizing the Order of the Residential 188bet online sports betting Market" issued by 6 departments including the Cyberspace Administration of China，Residential leasing companies to ensure that payments received through 188bet online sports betting financing do not exceed 30% of 188bet online sports betting income by the end of 2022。This breaks the barbaric ecology of unlimited expansion of long-term 188bet online sports betting apartments through “188bet online sports betting loans” to a certain extent。

Financial report display，As of the end of 2019，188bet online sports betting holds a total of 34 cash and restricted cash.5.6 billion yuan，An increase of 9 from the beginning of the period.9 billion yuan，But the increased funds are mainly restricted cash。The company’s cash on hand during the period was only 6.8.5 billion yuan，And the book cash at the end of 2018 was 10.8.7 billion yuan。

In terms of liabilities，188bet online sports betting’s total assets during the period were 90.0.6 billion yuan，YoY increase of 54.48%，Total liabilities are 86.2.6 billion yuan，79 year-on-year increase.11%，Asset-liability ratio 95.78%，13 more than last year.16 percentage points。

As operating losses continue to increase，188bet online sports betting’s thirst for funds has never stopped。The reporter asked whether the company has other financing channels，Interview with the relevant person in charge of 188bet online sports betting on issues such as whether to issue bonds，The other party only stated that everything should be based on public information。

(Luo Ting, Liu Xue, Chen Jun and Xu Ying are pseudonyms 188bet online sports betting article.)

*Source 188bet online sports betting: WeChat publicNo. "China Business Journal" (ID: chinabusinessjournal)，Author: Weng Rongtao Zhong Guanglian，Original title: "The "Leverage Game" of 188bet online sports betting: The monthly income per room dropped by 131 yuan, the lease was canceled due to high debts》.