Does Letv fry the concept between reality and reality or go his own way?

whether it is the domestic market or the international market, TV or mobile phone, Letv's product market share has not been in the forefront.

as a star Internet company on the A-share gem, Letv has been "grabbing headlines" quite frequently in recent years. Although these actions do not necessarily appear on the listed company 300104.SZ, they have led to the exposure of Letv's overall brand. The company, which started with video content, is now turning itself into a versatile company that makes televisions and mobile phones as well as bicycles and cars. To this end, Letv not only needs a lot of money to support these new businesses, but also needs to explain to its investors again and again what these new businesses will bring to the company.

strong > more and more stories / strong >

on September 22nd, Letv Sports announced that it had won the exclusive rights of Premier League broadcasting in Hong Kong for the next three seasons starting from the 2016-17 season. In addition, according to public information, a series of other recent capital market operations of Letv include: investing tens of millions of yuan to buy a stake in China's first new energy vehicle integrated services operator, "Electric stake". At present, Letv has become the company's second largest shareholder, and the two will jointly launch the second round of financing; Internet financial platform Knight loan recently announced that it has received a strategic investment from Letv, a wholly-owned subsidiary of Letv. Southern Group Investment was invested by Letv within half a year after its establishment last year, while Xiaomi was also invested in the Southern School. Letv has become the second largest shareholder of Coolpad.

accompanied by a series of capital operations, large-scale publicity and exposure. According to Internet media, Letv Sports has won the exclusive broadcasting rights of the Premier League in Hong Kong for three seasons and invited nearly 300 media reporters to attend, while Letv's other businesses, such as new energy vehicles and smart bicycles, have also invited a large number of industry media to campaign. The most unexpected thing was that Letv was involved in a war of words between Coolpad and 360. although Letv remained calm on the incident and issued only an official announcement, the war against Coolpad made headlines.

compared with the development of Internet business, Leeco's capital operation is much lower-key. Leeco announced on September 23 that the non-public offering plan had been approved "unconditionally" by the CSRC. In essence, the "unconditional" here can only be realized after Leeco has modified the distribution plan.

on August 31, Leeco announced that it would adjust the private placement plan. According to the plan put forward on May 26th, Leeco plans to raise 7.5 billion yuan, including 4.4 billion yuan for video content resource library construction project, 991 million yuan for platform application technology research and development project, and 517 million yuan for brand marketing system construction project. another 600 million yuan is used to repay bank loans and 1 billion yuan is used to supplement liquidity. In this plan, the first major spending project is the construction of content resource database, and the second is supplementary liquidity.

along with the plan, there is also a plan to reduce the market capitalization of the actual controller Jia Yueting by 10 billion. Jia Yueting said that the funds will be lent to the company without interest. Since the launch of the program, there have been questions about the issue of additional "circle money" through the project, and the fiercest question comes from Liu Xiewei, director of the Chinese Enterprise Research Center of the Central University of Finance and Economics.

but just after the launch of the two plans, the market began to plummet, IPO was suspended, and it was reported that regulators had drawn a red line for refinancing: refinancing projects worth more than 5 billion yuan would no longer be accepted (or approved) below 4500 points. Although the news cannot be officially confirmed, many companies with refinancing projects worth more than 5 billion yuan, both new applications and those that have already been accepted, have lowered the amount of financing, the most typical of which is Leeco.

Leeco submitted its application before the slump and was accepted by the CSRC, but the financing plan of 7.5 billion yuan was significantly higher than the invisible red line mentioned above. On August 31, Leeco released a revised directional additional issuance document, in which the amount of financing has been reduced to 4.8 billion yuan, lower than the invisible red line mentioned above. In addition, two spending plans unrelated to the project were removed. In the new revision, the amount of money used for the construction of the video content resource database is reduced to 4 billion yuan, and the amount of money for the platform applied technology research and development project and the brand marketing system construction project is reduced to 400 million yuan each. the rest of the repayment of bank loans and supplementary liquidity, which have nothing to do with business and are always labeled as money, are directly cancelled. The CSRC then adopted the revised plan.

strong > executives' accurate increase or decrease of holdings / strong >

on the one hand, it is a massive new move of Letv's products, on the other hand is the precise increase and reduction of Leeco executives' holdings.

on December 23, 2014, 12 Leeco executives asked the company to increase its holdings in the next six months. At that time, Letv was involved in the investigation of the plan, the stock price fell continuously, and Jia Yueting had just returned from overseas. According to the reporter's statistics, the cost of increasing the stock price of these executives is in the range of 13-15 yuan.

on December 23, 2014, Gao Fei, Deputy General Manager, Yang Yongqiang, Tan Shu, Deputy General Manager, and Zhang Te, Secretary of the Board of Directors, etc., closed at 13.27 yuan (the same below). On December 24, 2014, Director Deng Wei, Chief Financial Officer Yang Lijie, Deputy General Manager Jia Yuemin, and Deputy General Manager Lei Zhenjian increased their holdings in the secondary market, closing at 13.68 yuan. On December 25, 2014, Liu Hong, director and deputy general manager of the company, Liang Jun, deputy general manager, Gao Fei, deputy general manager, and Zhang te, secretary of the board of directors, increased their holdings, with the closing price of 14.57 yuan on the same day. On December 26 and 29, 2014, Liu Hong, director and deputy general manager of the company, Deng Wei, secretary of the board of directors, Yang Lijie, chief financial officer, Gao Fei, deputy general manager, Liang Jun, deputy general manager Wu Asia, deputy general manager Lei Zhenjian, deputy general manager Tan Shu, deputy general manager Jin Jie, ten senior executives increased their holdings, and the closing price was 14.50 yuan and 13.72 yuan respectively. On December 30, 2014, Deputy General Manager Liang Jun, Deputy General Manager Wu Ya, and Deputy General Manager Jin Jie increased their holdings, closing at 14.58 yuan that day.

in January 2015, Leeco issued a performance forecast: consolidated operating income increased by 180% over the same period last year; net profit belonging to shareholders of listed companies increased by 20% and 30% over the same period last year. Share prices have bottomed out and launched an upward offensive, reaching an all-time high of 89.5 yuan on May 13, 2015, a price that has risen about eightfold since executives increased their holdings. At this time, Chairman Jia Yueting announced the reduction of holdings.

on June 19, after a round of collapse, Secretary Zhang Te increased his holdings. At this time, Leeco's highest price has dropped from 89.50 yuan to 55.04 yuan. On June 30, after the increase, Leeco announced that it had signed a "Strategic Cooperation Framework Agreement" with Shanghai Jinshida Weining Software Co., Ltd. On July 8, Letv, which was suspended during the slump, issued a foreign investment announcement and resumed trading. It said that it intends to jointly invest with Letv Sports Culture Industry Development (Beijing) Co., Ltd. (hereinafter referred to as Letv Sports) in Beijing Yixing Sibo Network Technology Co., Ltd., of which the company contributed 10 million yuan with its own capital, Letv Sports contributed 5 million yuan, and the stock price rebounded briefly.

since then, the frequency of senior executives increasing their holdings has become smaller and smaller, but Leeco has launched an employee stock ownership incentive plan. It was not until September 7, 2015 that senior managers Liang Jun, Gao Fei and Wu Asia stepped in to increase their holdings again, with the closing price of 31.87 yuan on the day. Interestingly, less than a month after the increase in the holdings of the above executives, Leeco issued an announcement that the private placement was approved unconditionally. Recently, Letv's entire group has made a very big move. Letv is now fully launched in sports, new energy vehicles, smart bicycles, mobile products and other fields. As a result, the stock price has rebounded by nearly 30 per cent.

reporters found that the increase of senior executives' holdings is closely related to the positive release and the rise of stock prices. Except for Zhang Te's June 19 increase in holdings, which belongs to high holdings and losses, all other holdings have been profitable so far, and the holdings increased at the end of December 2014 are still in a state of 100% profit. Liu Xiewei proposed that Jia Yueting and other senior executives have complete information about Leeco. Under the condition of information asymmetry, the actual controller, chairman and general manager of listed companies reduce their holdings and cash out of a huge amount. Is the motive of this behavior quite suspicious?

according to the national enterprise information publicity system, the legal representative of Letv Sports is goofy, and Leeco is its affiliated shareholder. Goofy intensively increased its stake in Letv at the end of 14 years and September 7, respectively. Letv Sports jointly invested with Leeco in July, and announced on September 15 that former legendary media man Cheng Yizhong joined Letv Sports and served as CEO of Hong Kong company. a week after joining, Letv Sports announced that it had won the exclusive broadcasting rights in the Premier League in Hong Kong, and the increase was approved by the Securities Regulatory Commission on the 23rd.

after the market plummeted in mid-June today, the CSRC issued a notice restricting shareholders who hold more than 5% of their shares to reduce their holdings, but none of the above-mentioned senior executives' shareholdings have reached this red line, and the six-month sales restriction period has passed. Executives have become "Xiao Fei". According to the reporter's understanding, some of these executives whose holdings are due to have career changes are expected to change, and whether they will continue to hold shares in Leeco after leaving Leeco has not yet been announced.

strong > most of the business has nothing to do with listed companies / strong >

does Letv's above series of actions add to Leeco's performance?

Shi Beichen, author of science and technology, said that the actual effect is smaller than that shown by propaganda. For example, Letv Sports won the exclusive broadcasting rights in the Premier League in Hong Kong for the next three seasons. first of all, Letv did not disclose his installed capacity and sales in Hong Kong, which was also mentioned in Liu Jianwei's questioning article.

Liu Jianwei said that according to the relevant regulations, the company's board of directors should introduce the operation during the reporting period, including: (1) the scope of the main business and its operating status. one. Respectively explain the composition of the company's main business income and main business profits during the reporting period by industry, product and region. two. Introduce the production and operation of the main products or services and their market share. The business activities that account for more than 10% of the company's main business income or main business profits and the industries to which they belong shall be described. For major products that account for more than 10% of the main business income or the total profits of the main business, their product sales income, product sales cost and gross profit margin shall be itemized. Leeco's 2014 annual report did not disclose the composition of the main business profits, nor did it specify the source of operating profits.

in fact, Leeco, a listed company, issued an announcement as early as April to clarify its relationship with this series of Letv's main business: the company has no equity relationship with the operator of "supercar". The business will not affect the company's performance in the short term. The "Letv Super Mobile" business is carried out by the company's affiliated company, Letv Mobile Intelligent Information Technology (Beijing) Co., Ltd., which does not belong to the company's holding subsidiary and the company will not dominate the business.

although Leeco is not directly related to part of the business pushed by Leeco, the ecological chain emphasized by Jia Yueting is a series of independent and unified whole, and each business is an independent company in terms of equity. However, in order to complete the ecological construction from terminal to content, each company has to act in unison. As a content platform, Leeco will inevitably be affected by the development of other businesses. In particular, the company is still the only listing platform under Letv, and it is also the main carrier of financing function.

when Leeco's financing function is limited-as mentioned above, when it is necessary to shrink the amount of financing due to the influence of macro policies, Letv decisively launched other financing methods, including the funds provided to listed companies after Jia Yueting reduced his shareholdings, but there are few financing options for non-listed companies.

in July this year, I obtained a plan for Letv Holdings and China Plant Department to raise funds from the society to set up wealth management products. The proposal shows that Letv Holdings (Beijing) Co., Ltd. (hereinafter referred to as Letv Holdings) plans to join the plant company as GP (general partner) to set up a similar PE product called "Letv Fund Phase I, No. 12 Hengtian Wealth stable benefit". The products are invested in Letv Mobile Intelligent Information Technology (Beijing) Co., Ltd. The fund manager is Beijing Hengtian Wealth Investment Management Co., Ltd., the fund custodian is Guoxin Securities, the fund raising scale is not more than 310 million yuan, the current period is not less than 10 million yuan, the duration is 24 months, and the expected income is divided into three levels. According to the principal of 1 million-3 million, 3 million-6 million, 6 million and above, it is set at an annualized 10.3%, 10.8% and 11.3%, respectively.

the guarantor of this product is Letv, a shareholder of 300104.SZ, and Jia Yueting, the actual controller of Letv. The major shareholder behind Hengtian Wealth is warp and weft spinning machine (000666.SZ). The two GP of the product are Letv Xingen and Beijing Jingpeng, Letv Xingen is a limited partnership investment company jointly established by Letv Holdings and Beijing Xingen Investment Management Co., Ltd., and Beijing Jingpeng is an investment company jointly established by Zhongzhi Capital Management Co., Ltd. And Jingwei Textile Machinery Co., Ltd. The rest of LP (limited partners) raise money in the form of wealth management products, use the products to raise funds to subscribe for Letv Xingen limited partnership share, and then provide loans to Letv Mobile.

two months later, Xingen and Letv finally appeared in the flash together. Letv signed a cooperation agreement with Chongqing Municipal Government and Xingen Capital on September 28th. Letv will invest in an industrial base in Chongqing. Cooperation directions include cloud computing and big data, Daping intelligent terminal manufacturing, finance and other aspects. Huang Qifan, mayor of Chongqing, also attended the cooperation signing ceremony.

who is the Xingen Capital that not only helps Letv solve the problem of capital chain, but also actively facilitates the cooperation between Letv and the local government? Public information shows that Beijing Xingen has only one shareholder, that is, Zeng Qiang, the founding partner of Xingen Capital. Xingen Capital was founded in 2010, based in Chongqing, the company's business is mainly divided into two categories, one is to help Chongqing enterprises, especially state-owned enterprises to carry out overseas mergers and acquisitions, and the other is for Chongqing to introduce overseas capital management and talents. participate in the construction of major projects and landmarks in Chongqing. "in the inflow and outflow of similar capital, Xingen Capital will play a leading role." Zeng Qiang said in an interview with the media.

obviously, Letv's landing in Chongqing is also the result of Xingen Capital. The company, known as the ninth largest investment and financing platform in Chongqing, has a number of members with overseas investment and financing experience: Qin Hanyu, managing director of Xingen Capital, once worked for a fund company in Philadelphia and Deutsche Bank, and worked at Merrill Lynch before returning home; Qian Jun, who worked at Lehman Brothers and came to Hong Kong at the end of 2005, was in charge of the company's special investment division in Hong Kong before its collapse. Yu Yang, partner and chief operating officer of Xingen Capital, previously served as a representative of an American company in China.

there is no shortage of hustle and bustle in the Internet circle, but in the end it is the user data that speaks. Whether it is the domestic market or the international market, television or mobile phones, Letv's product market share has not been in the forefront. Smartphones are not yet available, and smart TVs only rank 10th in domestic market share. Such a reality may be a reality that Letv needs to face in addition to his story.

Edit: vian