On the evening of April 19, LeTV released the 2016 annual report. The annual report shows that LeTV's operating income reached 21.95 billion yuan last year, a year-on-year increase of 68%. This is also the first time that its operating income exceeded the 20 billion mark, and its net profit slightly decreased by 3.19% from last year.
As soon as the announcement was announced, many interpretations were ushered in. Looking at the future development potential of LeTV from the perspective of its revenue growth, it analyzes LeView’s assets and liabilities, cash flow, and profits from a financial perspective, and also questions LeTV’s growth in the later stages.
When LeTV became an industry “phenomenon,†some of its listed LeTVs also lingered in front of many brokerage institutions, large investors, and retail investors. Let’s take a look at various stock forums. LeTV can always be the number Thousands of stocks were the ones who were most active and lively.
The reason why LeTV is able to have such "energy" is because it has brought about "Lotus Pond Effect" in just 6 years - LeTV has grown too fast! The revenue for the six years has increased nearly 100-fold to 21.95 billion yuan; The market value rose from 4.3 billion yuan at the IPO to more than 60 billion yuan now, and exceeded 150 billion yuan at the peak.
The history of the development of the LeTV network can be roughly divided into three periods, one before and after the IPO, the second from 2013 to 2016, and the third from November 2016 to the present (LeTV is called the second phase of the strategy). The first period was the period of rapid development of music video. With its unique emphasis on intellectual property, LeTV purchased a large number of genuine copyrights for movies and TV at a very low price, and promoted its rapid development through paid members and copyright distribution. In the second period, Super TV was launched, the "big screen ecology" was born, and the "platform + content + hardware + software + application" strategy concept was implemented. In the third period, LeTV adjusted its strategic rhythm and started the second phase of refined operations.
In the first two periods, LeTV has achieved rapid growth of nearly a hundred times, and has also brought huge returns to investors. In the third period, can LeTV continue its glory? Here, the author tries to find out how LeTV can perform after entering the third period by sorting out the growth history of LeTV for nearly six years.
Open up a new track IPO rides
As we all know, LeTV is started as a video. In many people's minds, LeTV appeared around 2010. In fact, prior to 2004, LeTV was established. From the very beginning of its establishment, it began to deepen the content field - a large number of purchases of copyright.
However, at the time, the entire industry did not pay enough attention to video copyright and believed that video could be obtained free of charge. As long as advertising was available, it could earn revenue. As a result, most video sites burned their money in bandwidth, server, and online promotion in the early stage. In the eyes, only PV and advertising revenues were used, and no attention was paid to content input.
LeTV's purchase of copyright has also been ridiculed. But at this time, LeTV.com acquired a large amount of copyrighted content with the price of "cabbage." According to the prospectus, in 2007 LeTV's average purchase price for movies and TV shows was RMB 17,400/piece, and in 2008 it was RMB 26,800/piece. In 2009, the purchase volume was 7 times the sum of the previous two years, and the average price was only RMB 14,700. /unit. The cost of copyright purchases for the three years combined adds up to only 58.5 million yuan.
In the following years, China’s crackdown on piracy became increasingly severe and the price of copyrighted content also began to soar. At that time, people discovered that many exclusive network copyrights were actually in the hands of LeTV. This led the latter to develop a rather strange business - copyright distribution. LeTV.com’s prospectus shows that in 2008 LeTV.com’s copyright distribution revenue was nearly 3.4 million yuan, and in 2009 it exceeded 10 million yuan.
With a record of continuous profit for many years, LeTV.com entered the GEM in August 2010. At that time, in the ranking of Chinese websites published by Alexa, LeTV ranked after 100, which was far below the status of Youku and Tudou, and it was also questioned by many people. However, this does not affect LeTV's listing and capital pursuit. On the first day of trading on the GEM, Le Shifang's opening price reached 49.44 yuan, 20.24 yuan higher than the issue price of 29.2 yuan, an increase of 69.32%, and the end of 2010, the stock price rose to 64.38 yuan.
When other video sites saw the importance of copyright and they began to follow the same pattern, causing the copyright price to become higher and higher, LeTV jumped to another shore. In 2010, LeTV was established and began to take the road to film and television production.
It was with the awareness of advanced copyright awareness and “content as the king†that LeTV became the first IPO company in China’s video website and the only video website to achieve continuous profit for many years. Still not broken by any domestic video company.
Build an ecosystem to reshape the income structure
In 2011 and 2012, LeTV was sent high for two consecutive years. In 2011, 10 shares sent 12 dividends of 1.5 yuan (including tax), and in 2012, 10 shares went to 9 shares of 0.73 yuan (including tax), up to 2012. At the end of the year, the stock price closed at 18.79 yuan. After the restoration of rights, LeTV's share price in 2012 was as high as 78.85 yuan, and the investor’s return was 170%.
In 2013, it was a year worth remembering for LeTV. This year, LeTV.com's closing price reached a record high of 324.55 yuan (after reinstatement), with a market value of more than 30 billion yuan, surpassing Youku Tudou and becoming the highest-valued video company in China.
A major factor in the rapid growth of stock prices was the launch of LeTV’s first generation of “Super Screen Ecologyâ€. LeTV has both the "soft" and "hard" qualities and has the potential to benchmark "Apple" in the minds of investors. The ecological concept of "platform + content + hardware + software + application" put forward by LeTV in the first period (2012) also has a practical soil.
Levision co-founder Liu Hong stated that LeTV is committed to becoming the world's leading Internet reserve and transmission platform, providing one-stop cloud video services for users. LeTV's platform, content, hardware, software, and application strategy support and complement each other. (This is also what people see in the video "LesTV Ecology.")
The launch of Super TV has received great recognition from investors and has also given rise to major changes in LeTV. Before 2013, LeTV's main operating revenue was only limited to "narrow video" service revenue such as network HD video service revenue, copyright distribution revenue, ultra-clear broadcast service revenue, and advertising revenue.
However, since 2013, LeTV’s main business income has begun to become advertising, terminal and member distribution services. In 2013, the income from main operations also increased by more than 100% over the previous year.
According to industry analysts, the concept of “platform+content+hardware+software+applications†is an ecological concept that allows LeTV to completely differentiate itself from other video sites in China and truly become a company that spans the Internet and manufacturing industries. It also achieved its rapid growth in the second period.
Certainly, there have been some problems during this period. However, from the perspective of Leopard Group, PPTV, BAT, and other Internet companies entering the TV hardware field to imitate the LeTV model, the concept of LeTV's “platform+content+hardware+software+application†architecture has been Highly recognized.
The second phase of the strategy Revenue quality upgrade
In November 2016, LeTV’s founder Jia Yueting issued a letter to all the crew members. “The water and the flames of LeTV: Was it swallowed up by huge waves or boiled the ocean? †marks LeTV’s entering the second phase of the strategy (the third period in this article).
Jia Yueting said, "The second phase of the goal is very clear, we hope to maintain rapid growth in the number of users and the rapid growth of positive cash flow, and listed companies began to enter the stage of rapid growth in profits."
In the new stage, LeTV's 7th largest ecology will be developed in depth, the non-listed company's plate business will be business-oriented, and the listed companies will achieve overall profitability; the sub-ecosystems will be strengthened against each other and continue to create new ecological values; globalization strategy The expansion also came to an end and the current three major regional value markets of China, the United States, and India were focused on in a phased manner. A real breakthrough was made step by step.
First, LeTV has made changes in its organization. In accordance with the adjustment of the strategic rhythm, several organizations such as the formation of an eco-sales and service platform (China) and the appointment of a number of core executives were successively launched, and announced the establishment of a global Internet technology and EUI platform to accelerate the evolution of the music-based eco-organization.
Secondly, for the non-core business, high-burning business initiative "downsizing", including music as sports to give up the Super League, AFC and other events copyright, LeTV as LeTV will be stripped of listed companies and so on.
Third, pay attention to the meticulous operation of the large-screen ecology and strive to realize a total of more than 20 billion yuan of non-hardware revenue from large screens in a three-year period. The big screen ecology will achieve a break-even in 2017, and will be fully profitable in 2018 and 2019. Once this goal is achieved, only about 500 million yuan will be recorded for LeTV in 2017 alone.
Senior investor Lichun Li in February believes that LeTV's listed company's business has been stabilized and launched in an orderly manner because of the completion of the financial investment strategy. This is the most abundant time for LeTV's listed company; at the same time, LeTV and TV The business has been presented with surprises. The new television production, research, supply and marketing have all reached new heights, and offline shipments are actively underway.
He also pointed out that the more important point is that LeTV’s TV ads will increase its overall price. After March, all types of advertising will continue to be on super TV. Users know that the value of such advertising is beyond the reach of traditional television stations. In addition, LeTV's large-screen ecological operation has also been continuously deepened, and games, education and shopping have been substantially promoted.
Therefore, some investors believe that LeTV’s 2016 profit was affected by public opinion and financial pressure, but in 2017, under the premise of the development concept (the concept of “platform + content + hardware + software + applicationâ€). After the adjustment of the strategic rhythm, LeTV is expected to obtain a freshman, achieving the sustained and rapid development of its third period.
LeTV has gone through the past 7 years from the IPO to the present. Due to forward-looking vision and layout, the middle has undergone two changes. Today, the era is promoting it to start the third transformation. Can LeTV's double-upgrade quality If you succeed, you may wish to wait and see.
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