What is NetQin's intention in issuing another open letter to investors?

On the afternoon of August 8, NetQin once again issued an open letter to investors. In the letter, NetQin once again elaborated in detail on the market value of its gaming subsidiary Feiliu, hoping to restore the capital market's recognition of NetQin's market value.

Since the news that NetQin had received a non-binding privatization offer from Bison Capital was announced at the beginning of this month, NetQin's stock price has fallen into a slump again after a brief rebound. NetQin has not yet made any decisive response to Bison Capital's privatization offer.

It is understood that the previous estimated value of Feiliu was also reflected in the investment and acquisition of it by Bison Capital and other investors. In May this year, Feiliu, a subsidiary of NetQin, sold 5.88% of its shares for a total price of approximately US$25 million. Industry insiders inferred that Feiliu's market value is about US$400 million.

NetQin's open letter aims to once again confirm the authenticity of Feiliu's market value by announcing part of its business: at a time when the mobile game market is booming, Feiliu, whose main business model is based on the distribution and operation of mobile games and related communities, has very considerable potential value as it maintains cooperative relationships with multiple mobile phone manufacturers.

According to statistics, as of December 31, 2013, Feiliu had operated and released 20 iOS games and 69 Android games, with a total of more than 106.9 million registered users (67.4 million in 2012, editor's note, the same below), and 20.4 million monthly active users (12.5 million in 2012). According to statistics, these games generated a total revenue of about 20.7 million in 2013. This does not include the revenue earned by the subsidiary from other projects such as advertising.

According to the "2014 Q1 China Mobile Game Market Report" (data provided by Enfodesk iResearch), Feiliu has the second largest market share on the iOS platform, with a total market share of 15.2%; combining the two major markets of iOS and Android, the company maintains a 10.3% share of the game market.

It is also understood that Bison Capital tends to invest in companies with undervalued value. Given NetQin's current financial situation, good business development, and large number of client users, the current stock price may not reflect NetQin's true value, and repackaging and listing after privatization will also be a good deal.

As for the release date of NetQin's annual report, NetQin CEO Lin Yu said earlier: According to US securities laws, the longest delay in submitting a report is 2 years, and NetQin has applied to delay the report submission time by half a year to November 15. NetQin, which has changed its auditing agency, will submit the 2013 audit report as soon as possible before this time.

Since the short-selling by Muddy Waters in October last year, NetQin, which has transformed from a mobile security company to a mobile Internet platform, has been plagued by rumors. In addition to fighting with the short-selling institution Muddy Waters, NetQin has also faced doubts and questions from the outside world, and its market value and stock price have been greatly fluctuated. After experiencing a series of storms, NetQin also hopes to gradually regain the trust and understanding of the capital market and users.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.