Jia Yueting sent a letter to shareholders frankly stating that LeTV will achieve profit in 2017

Regarding the plan for 2017, Jia Yueting said that in terms of business development, LeTV will push forward the pace and strategies of new ecological strategies, from rapid expansion to deepening and penetrating the market, and from previous non-intensive operations to mining and serving high-value users to achieve comprehensive profitability.

On the evening of April 20, Jia Yueting released a "Letter to Shareholders", in which Jia Yueting stated that LeE.com's revenue in 2016 exceeded 20 billion yuan and its market value exceeded 60 billion yuan.

Regarding the plan for 2017, Jia Yueting said that in terms of business development, LeTV will push forward the pace and strategies of new ecological strategies, from rapid expansion to deepening and penetrating the market, and from previous non-intensive operations to mining and serving high-value users to achieve comprehensive profitability.

The following is the full text of the letter to shareholders:

Six years ago, LeTV first appeared on the GEM. Relying on the innovative model of copyright content and member payment, its annual operating income reached 230 million yuan. Today, the company has built three major sub-ecosystems: the Internet, cloud, content, and large screen, achieving annual revenue of more than 20 billion yuan and a market value of more than 60 billion yuan.

Behind the nearly 100-fold growth in six years is LeTV people's determination of Internet ecological innovation and the entrepreneurial spirit that has been running along the way. Entrepreneurship is like mountaineering. In the initial stage, you run blindly from scratch, and rush to the mountainside overnight. However, the closer you get to the top of the mountain, the steeper the road ahead and the heavier the pace.

During the shift period of actively adjusting the pace and strategy of strategic realization, LeEco's non-listed system is experiencing a "soaring disaster", and the public opinion storm caused has also affected the steadily developing listed companies to a certain extent, bringing pain in performance growth. We believe that transformation brings leaps and bounds, and we would like to thank the investors, users and partners for their company along the way.

In 2016

, Le.com historically achieved a total revenue of more than 20 billion yuan. Its three main businesses, terminals, members, and advertising, were fully deployed, highlighting the strong monetization capabilities of the ecological innovation model and the product power and market value of the Internet and cloud, large-screen ecosystem and content ecosystem. Among them, LeTV Video has established itself as a leader in the industry, its self-made film and television content has achieved both market and reputation, and Super TV has become the leader in the Internet smart TV industry.

However, after several consecutive years of comprehensive expansion, some non-listed systems in the LeEco ecosystem have experienced periodic financial pressure, and the operations of some LeE.com affiliates have been affected, hampering LeE.com's profit realization.

In 2016, our annual revenue achieved 21.951 billion yuan, a significant increase. The net profit attributable to the parent company for the whole year was 555 million yuan, and the net profit growth showed the first correction in six years. The main reason was the increase in the company's business scope and the decline in total profits caused by the growth period of new businesses. At the same time, due to the fact that Super TVs in the early stage quickly acquired users mainly with high configuration, high performance, extreme experience, and disruptive prices, as well as the increase in management expenses and sales expenses caused by the company's rapid development, the company's operating profit decreased year-on-year.

However, in terms of the stage and prospects of business development, the company's advertising business, paid membership business and large-screen business are in a period of rapid and stable development. The short correction is only a phased issue. In the future, as the business scale continues to increase, the company's performance will Continue to develop at a high speed and steadily.

A rainbow is seen after a storm. In the second phase of LeEco's ecological strategy, LeE.com has gained the highest level of strategic focus. "Listed companies are the foundation of LeEco's ecology," Mr. Jia Yueting, the company's major shareholder, pointed out very clearly."In the future, we will focus our strategy on LeEco."

What we want to emphasize is that listed companies are the strategic support point of the entire LeEco and the most stable business segment of LeEco. Any financial pressure cannot affect the liquidity of listed companies. The participation of strategic shareholders such as Sunac China, Truly Electronics, Compal also reflects investors 'recognition of LeEco's future.

The 2017 Profit Battle 2017

is the first year of a new stage of LeEco's strategy and a critical year for LeE.com. Improving the liquidity of listed companies, improving the company's cash flow, and achieving overall profitability will become the top priorities of our work. We are full of confidence in this regard.

In terms of business development, LeTV will vigorously promote the new ecological strategy to realize the pace and strategies, from rapid expansion to deepening and penetrating the market, and from non-intensive operations in the past to exploring and serving high-value user groups to achieve comprehensive profits.

First of all, LeTV's Big Screen will be the first to turn losses. Last year, LeEco's net profit loss of more than 600 million yuan, which directly led to a decline in LeEco's net profit. Based on the current growth rate of LeEco's new development, it is expected that LeEco's big screen will successfully turn losses into profits in 2017, which is reflected in its performance. It is expected to increase LeEco's net profit by hundreds of millions of yuan.

LeEco's large-screen turnaround is based on the judgment that hardware losses will be smoothed out and Internet revenue growth will have a significant effect. Since 2015, LeTV has innovatively developed TV shopping and games businesses. In terms of TV shopping, its annual average customer unit price has reached nearly 1,000 yuan, which is already several times that of traditional e-commerce shopping. At the same time, the revenue brought by games to Le.com has also reached 100 million yuan.

Secondly, content has always been the focus of LeTV, and the era of content payment has arrived. Research institute data shows that as of the end of 2016, the number of effective video paying users in China has exceeded 75 million, with a growth rate of 241%, 9 times that of the U.S. market. Video payment in China is undergoing "fusion."

In 2017, LeEco's content side once again showed its sword. In accordance with its previous commitment, it actively promoted the integration of LeEco Pictures into LeEco. At the same time, it will also acquire Le Yang Films, a cutting-edge company in the industry that is responsible for "Promotion of the Crown Princess"; A high-quality film production platform and a cutting-edge online drama production will help LeTV create the most complete content industry chain of TV series + movies + homemade + animation + variety shows, and build an Internet content ecosystem that connects movies and TV, connects traditional film and television production with online self-production, connects online and offline distribution, and connects domestic and global film and television markets.

In terms of LeTV videos, the next series of films such as "White Deer Plain","Xuanyuan Sword's Cloud of Han","National Action","Guardians: Appears to the Surface","Because I Met You","You Love Me So Much, I Will Take It Seriously" and "Hunting Ground" will make its solo content more eye-catching. LeTV Video already has a large number of high-quality IP reserves and the ability to develop and operate IP.

With the large-screen ecosystem turning losses into profits and the content ecosystem consolidating, we have reason to expect that LeTV will achieve new breakthroughs in its terminal, member and advertising revenue in 2017. After entering the second stage of the ecosystem, terminals, members, revenue, and net profit will also become important indicators to measure LeTV's standards. LeTV will now enter a redemption period of counter-conversion effects.

Last year, LeEco experienced the "disaster of ascent". Fortunately, it was a disaster and a blessing relied on it. We recognized it in a timely manner and proactively adjusted its pace. This is also the only way for a company to move from youth to maturity and greatness.

In the future, we will strive to bring long-term value growth to investors; pay more attention to user choices and experiences, and regard user experience as the foundation for achieving long-term growth in corporate value.

Xiongguan Road is as true as iron. Now we are moving from scratch and looking to the future, we have a long way to go.

Today's LeTV has clearer goals, more steady steps, more mature, stronger and more confident than before.

Once again, we thank everyone who has supported and helped LeTV.

I wish you all a happy day (video)!

LeTV Information Technology (Beijing) Co., Ltd.

April 20, 2017

Editor: Nancy