HK$217 million! Why did Oriental Selection Sun Dongxu reduce his holdings at this time?

Author|Morning Light

Editor|Chen Yanxu

Operations|Chen Xiaoyan

Mirror (ID: DMS-012)

Recently, after the stock price of Oriental Selection reached a high level, the company's core executives sold shares one after another, and the increase in uncertainty caused capital market concerns, and the company's market value lost nearly 10.2 billion Hong Kong dollars in the past two days.

Among them, the company's CEO Sun Dongxu made two reductions on February 7 and 8, selling about 1.93 million shares on February 7, with an average trading price of HK$556115, cashing out HK$107 million, and reducing his shareholding ratio from 1.57% to 1.38%. On February 8, about 1.93 million shares were sold at an average trading price of HK$569451, cashing out HK$110 million, reducing its shareholding from 1.37% to 1.18%. A total of nearly 4 million shares were sold in two days, cashing out HK$217 million.

Consumers who have been paying attention to Oriental Selection are no strangers to Sun Dongxu, CEO of New Oriental Online, and can even be described by the word familiar.

In June last year, Oriental Selection suddenly exploded out of the circle, and on June 8, Oriental Selection's Douyin account reached one million fans, and at that time, colleagues from Oriental Selection proposed to cut cakes to celebrate and interact with fans.

In half a year, from 0 to 1 million, in the difficult survival process of the past enterprise, many times Sun Dongxu acted as the "spiritual pillar" of the team, and he moved to retain and cultivate anchors, including Dong Yuhui, who became popular first, and only under his persuasion did he have the motivation to persevere.

Sun Dongxu seems to be the core figure of the Oriental selection known to the public in addition to Yu Minhong and Dong Yuhui.

At present, live streaming has long changed. After Li Jiaqi, the first brother with goods, returned to Taobao, the overall traffic pool of Taobao increased significantly. In the face of the onslaught of Douyin and Kuaishou, Taobao is also constantly adjusting new policies and actively supporting middle-waist anchors. The anchor "Crazy Little Yang Ge", who became popular by "overturning cars and bringing goods", also began to open the apprentice mode on Douyin to increase the popularity of live broadcasting, and was getting closer and closer to the oriental selection in the direction of product selection.

As the growth of users on various live streaming platforms slows down, the traffic of top anchors has also entered the stock era, and consumer experience is more important. At the same time, in order to get rid of the monopoly traffic of head anchors, the algorithms of major platforms are constantly being broken, and the operation strategies of top anchors will continue to be overturned and rebuilt, and it is difficult for live streaming e-commerce to grow wildly.

To this day, Sun Dongxu still plays an important role in the selection of the East. At this time, Sun Dongxu chose to reduce his holdings at the high level of Oriental Selection's stock price, which inevitably caused concerns from the outside world and shareholders about the company's prospects.

In June last year, Sun Dongxu said in an interview with the media that the company should not pursue profit margins, but pursue profit volume, and make scale.

When asked about the next stage of sales planning, Sun Dongxu said that every day the performance fluctuates, and the performance fluctuations are often caused by lack of inventory. "To manage inventory, I mainly step on the brakes, I want to develop steadily, not to do temporary trading, I want to continue this company."

In addition, some media reported that the relevant person in charge of New Oriental Online did not reply to the specific reasons for the executive's reduction of holdings. An insider told reporters that it is normal for company executives to sell small amounts of shares during the effective exercise period.

The flow of oriental selection gradually stabilized

Distinct Mirror

It is worth noting that on January 31, New Oriental Online issued an announcement that after the vote of the shareholders' meeting, "New Oriental Technology Holding Limited" will be renamed "East Buy Holding Limited".

In the eyes of the outside world, the name change of New Oriental Online has been finalized, which means that it will all in live streaming e-commerce. New Oriental Online will no longer be positioned as an education company that is transforming and hiding high-growth opportunities, but as an e-commerce company involved in live streaming competition and seeking stable growth.

Before the transformation, New Oriental Online was in a trough due to the termination of the K12 business. With the live broadcast business of Oriental Selection becoming its main business, New Oriental Online has gradually completed the transformation from 0 to 1, and it is not easy to replicate the current revenue growth rate of nearly six times in the future.

According to the latest half-year report, the total revenue of "self-operated products and live streaming e-commerce segments" represented by "Oriental Selection" was 1.766 billion yuan, accounting for 85% of the total revenue of New Oriental Online. Among them, the GMV of self-operated products and live streaming e-commerce business was 4.8 billion yuan, and GMV from Douyin accounted for the vast majority of the total GMV.

For the six months ended November 30, 2022, New Oriental Online's total revenue was 2.08 billion yuan, a year-on-year increase of 590.2%; The net profit was 585 million yuan, the first profit since listing, and a loss of 109 million yuan in the same period last year.

In fact, compared with June last year, the number of viewers of the Oriental Selection Live broadcast is gradually declining. Oriental Selection has opened six live streaming accounts on Douyin, with product categories and SKUs including agricultural products, food, books and daily necessities. According to the latest financial report data, as its live broadcast base, Oriental Selection has 35.2 million followers on the Douyin platform, and the Douyin platform has paid 70.2 million orders.

At present, Oriental Selection of self-operated products is gradually expanding SKUs. As of the end of November 2022, Oriental Selection has provided 65 kinds of self-operated products, including black pork grilled sausage, Wuchang rice, blueberry puree, etc. At the results conference call in January this year, Sun Dongxu, executive director and CEO of New Oriental Online, introduced that the goal is to launch 5-10 excellent self-operated products every month to create explosive products.

At present, grilled sausages are currently the highest selling self-operated products. Recently, Oriental Selection announced an investment of 17.52 million yuan for the expansion of its self-operated grilled sausage Henan factory. At present, the company has signed an agreement with the manufacturer to jointly establish a joint venture company, with Oriental Select holding 30% of the shares; The plant is expected to start operations at the beginning of 23 years after the expansion, with an annual output of 18,000 tons, and will continue to expand production capacity by adding equipment according to the order volume.

The market value lost HK$13.4 billion

Distinct Mirror

Since the landing of the double reduction, New Oriental Online's stock price has been falling all the way. At the bottom of May 2022, New Oriental Online's share price was as low as HK$2.84.

In June last year, Tencent sold New Oriental Online shares on June 15 and June 16, reducing its holdings by a total of 74.6 million shares, with an average trading price of about HK$9.6 at that time, cashing out about HK$719 million, and Tencent's shareholding ratio dropped from 9.04% to 1.58% after the reduction.

After the overnight explosion of the Oriental Selection, Hong Kong stock New Oriental Online achieved a 20-fold increase in stock price. In June 2022, "Dong Yuhui" unexpectedly became popular in the Oriental Selection Live Broadcast Room with "Chinese and English Bilingual Goods", making the Oriental Zhen Live Room 10 days to circle tens of millions of fans, and then New Oriental Online's stock price soared, and on January 26 this year, New Oriental Online's stock price reached an intraday maximum of HK $75.55 per share.

By the end of 2022, the number of fans selected by Dongfang on Douyin was 29.01 million, and among the personal accounts of its anchors, Dong Yuhui's Douyin fans exceeded 10 million, Dunton fans 2.16 million, and Ming Ming had 1.173 million fans, and most of the rest of the anchors had less than 500,000 fans, which is very stratified.

After the Spring Festival this year, Dong Yuhui did not return to the live broadcast room. On February 8, Dong Yuhui, who had disappeared for a long time, returned to the Oriental Selection Live Broadcast Room, and the number of likes exceeded 100 million not long after the debut was launched, and the number of online people instantly skyrocketed to 100,000+, significantly higher than the usual number of online people.

At the all-time high of the stock price, in addition to Sun Dongxu, CEO of New Oriental Online, Yin Qiang, executive director and CFO of New Oriental Online, also reduced his shareholding.

It is reported that on February 9, Yin Qiang reduced his holdings and sold 1 million shares of the company, with an average trading price of HK $61.59, cashing out HK $61.59 million, and the current shareholding ratio is only 0.4%.

As of February 14, the latest share price of New Oriental Online has reached HK$50.8, and since February, the market value of New Oriental Online has evaporated by nearly HK$13.4 billion, and the total market value is now about HK$51.5 billion, which has exceeded the valuation of parent company New Oriental of US$6.9 billion.