Jia Yueting has not yet returned to China, LeTV network alone "return to blood"

At the moment of large-scale layoffs of Internet companies, LeTV, which laughed at itself on social platforms at the beginning of this year and "owes 12.2 billion", chose to go against the trend.

On December 22, LeTV and LeRong Zhixin issued an announcement that the company's operating profit and cash flow have achieved a double balance without considering historical debt, and said that "we will not lay off employees." The day before, the two companies also issued salary increase announcements. LeTV told the "China Times" reporter on December 22 that this wave of salary increases is the salary increase of employees affected by last year's salary cuts, accounting for about 70%, and also includes the salary increase of some outstanding new employees.

At this time, the announcement of salary increases, the above two LeTV companies seem to want to send a positive signal to the outside world, but with high debt, they are still some distance away from surviving the "hard days". But it is necessary to mention that after several backhands, the identity of the actual trader behind LeTV is confusing.

Salaries are rising

The "salary increase" announced by LeEco after the Spring Festival next year is to restore the salary cuts and subsidies that were suspended due to the epidemic last year.

Judging from LeEco's internal letter to all employees, since the outbreak of LeEco's capital crisis in 2016 to last year, LeEco has reduced costs and made several layoffs. At the end of 2019, LeEco laid off half of its employees at one time.

The "China Times" reporter also learned from LeTV that during the epidemic in 2020, LeTV has reduced the salary of employees with a monthly salary of more than 3W, with a salary reduction of nearly 10%, and canceled the subsidy for all employees.

It seems that measures such as salary cuts and layoffs have indeed partially alleviated LeTV's plight. Zhang Wei, CEO of Lerong Zhixin, said at the beginning of this year that Lerong Zhixin and LeTV have a total of about 450 people, and the monthly expenditure of the two companies is about 10 million, and the total annual salary expenditure is about 120 million. According to the financial report, the two companies' compensation expenses accounted for a quarter of LeTV's total revenue of 468 million yuan in 2020.

According to internal letters, one of the reasons leEco resumed employee salaries is that, without considering the impact of historical debt, LeEco's latest operating data has achieved a double balance of operating profit and cash flow, which is the first time in the past few years.

LeTV told the "China Times" reporter that the content of LeTV video continues to be updated this year, there will be new dramas every week, member income is stable, and a large number of exclusive copyright dramas have been accumulated in history. In addition, the commercialization of LeTV TV is also an important part of its revenue. According to the data provided to the reporter of China Times by LeTV, in 2021, LeTV video will have about 90 new TV series and about 350 movies.

Industry insiders believe that LeTV's salary increase shows that the company is picking up. Zhang Yi, CEO of Ai Media Consulting, analyzed the "China Times" reporter and pointed out that LeTV still has room for imagination in smart TVs. "LeTV has accumulated a large enough user base, smart TVs remain in the average family for five to six years, and LeTV TVs can sell larger rights and interests, such as memberships, advertising, etc."

But some people in the industry believe that LeTV's salary increase is more like a marketing gimmick, reflecting the company's marketing-oriented nature that has never changed.

Still surviving "hard days"

LeEco mentioned in the internal letter that LeTV's positive cash flow and break-even came from the joint action of the two companies: in terms of hardware, LeTV's intelligent ecology returned to the public eye, new categories and new products were listed one after another; in November this year, LeTV's TV terminal operation, mobile terminal operation, advertising commercialization and other businesses reached the annual business target ahead of schedule.

However, judging from LeTV's huge historical debts and cumulative operating losses, LeTV's "hard days" have not yet passed.

According to LeTV's financial report, as of June 30 this year, LeTV's liabilities totaled 21.6 billion yuan. Among them, the bills payable and accounts payable within the scope of LeTV's consolidated statements are 2.979 billion yuan, mainly due to suppliers and service providers; other current liabilities and other non-current liabilities total 6.9 billion yuan, mainly generated by the company's borrowings from financial institutions and non-financial enterprises. As of the end of the third quarter of this year, LeTV's total liabilities were 21.486 billion, of which current liabilities accounted for 70%.

From the perspective of operation, LeEco is still losing money. In the first three quarters of 2021, LeTV's revenue was 296 million yuan, but the net loss was 162 million yuan. From 2017 to 2020, LeTV's four-year net loss totaled 31.7 billion. LeTV also said in the third quarterly report that the company was affected by the historical large number of related receivables and advance payments could not be recovered in time, financing costs and interest-bearing debt remained at a high level, and large financial expenses were the main reasons for the company's continuous losses. In the first three quarters of 2021, LeTV's financial expense of 347 million yuan was double the current revenue.

To make matters worse, after terminating its listing in May 2020, LeTV was fined a total of 240 million yuan by the Beijing Securities Regulatory Bureau in April this year for the company's financial fraud for ten consecutive years.

However, LeTV told the "China Times" reporter that historical debt has no impact on the company's operation for the time being, but it will indeed have a negative impact on the brand, "Historical debt is a very complex problem, we can only accept the status quo, first do a good job in business, in order to solve bigger problems." ”

Zhang Yi believes that one of the problems facing LeTV in the future is from debt, and the other is from the control of operation, "The debt problem is the most important unstable factor for LeTV, in this case, it also depends on whether LeTV can fully grasp the wave of digital entertainment or smart TV." ”

Who is the trader behind it

After a year and a half of delisting, LeTV's "blood return" also made people pay attention to whether there was still a shadow of Jia Yueting behind it.

LeTV told the "China Times" reporter that the "LeTV" mentioned in this announcement refers to LeTV and Le Rong Zhixin, the two companies currently have a total of about 400 people, the two are not a company, and the finance is also calculated separately. She said that LeTV's revenue includes large-screen operation (TV operation), small-screen operation (LeTV video APP) and commercialization, and LeTV video is the most important product of LeTV. Lerongzhi's new business is the leTV intelligent ecosystem including hardware, tv, smart home appliances, etc.

The "China Times" reporter learned that LeRong Zhixin was once a subsidiary of LeTV Holdings, which came out of LeTV in early 2019, but LeTV still held shares in Le Rong Zhixin. Tianyan's investigation shows that LeTV, as the second largest shareholder, does not have new control over Lerong. However, Tianjin Jiarui Huixin, the largest shareholder of Le RongZhixin, is also inextricably linked to LeTV.

This is related to the fact that after the outbreak of LeTV's capital crisis in 2016, the equity of LeTV has undergone many changes.

In July 2017, Jia Yueting resigned as chairman of LeTV. Although he is still the largest shareholder of LeTV, in 2020, LeTV Holdings has said that Jia Yueting is no longer the actual controller of LeTV.

Just after Jia Yueting resigned, Sun Hongbin, chairman of Sunac China, who brought 15 billion yuan to fight the fire, was elected chairman of LeTV on July 21, 2017. Tianjin Jiarui Huixin, a subsidiary of Sunac, has also become the second largest shareholder of LeTV and Lerongzhixin. But in less than a year, Sun Hongbin handed over the position of chairman of LeTV to his confidant Liu Shuqing. In May 2019, Liu Shuqing, who had been in office for more than a year, also resigned as the chairman of LeTV.

In May 2019, LeTV suspended its listing, and in the case that Jia Yueting did not return to the United States and Sunac was still the second largest shareholder of LeTV, Liu Yanfeng "parachuted" to LeTV and was elected as the new chairman, and concurrently served as general manager, financial director and secretary of the board.

According to the financial report, as of the end of the third quarter of this year, Tianjin Jiarui Huixin is still the second largest shareholder of LeTV, holding 8.56% of the shares of LeTV. However, in June this year, Sunac transferred Tianjin Jiarui Huixin 0 yuan to Zhixin Cloud Network. The latter was only established in March 2020, but the two executives are old employees of LeTV: Li Xiaowei, the actual controller of Zhixin Cloud Network, was the general manager of marketing of LeRong Zhixin, and the supervisor Zhu Pengbo was also a legal person of LeTV New Media.

At the moment when LeTV seems to be gradually "warming up", the person who finally grasps the right to speak of LeTV still seems to be full of mysteries.

Responsible Editor: Huang Xingli Editor-in-Chief: Han Feng