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On July 25, Dong Yuhui announced his resignation from Oriental Selection. At the same time, Dong Yuhui acquired 100% of the shares of Huixingxing from Oriental Selection at a cost of RMB 76.59 million. As a result, Huixingxing, a wholly-owned subsidiary of Oriental Selection, will officially become independent from Oriental Selection, with Dong Yuhui holding 100% of the shares. Since the "Little Composition Incident" at the end of last year, the public has been arguing about the "de-Dong Yuhuiization" of Oriental Selection. Although the conflict was temporarily eased by Yu Minhong presiding over the overall situation and Dong Yuhui setting up an independent live broadcast room, it eventually ended with Dong Yuhui and Huixingxing completely "breaking up" with Oriental Selection. Regarding Dong Yuhui's acquisition of Huixingxing, Yu Minhong explained, "I arranged the money for Yuhui to buy the company, and the company was given to Yuhui." In the eyes of industry insiders, this is also a rare case where a big IP and a company can finally "break up" decently. For this, Yu Minhong gave up huge benefits and showed an "unexpected big pattern."

Yu Minhong arranged the acquisition payment and 140 million yuan reward

When Yihuixingxing and Dongfangzhenxuan "broke up", Yu Minhong revealed on his personal public account that in order to express his gratitude to Dong Yuhui, in addition to paying all the promised benefits, he had pleaded with the board of directors and the remuneration committee and obtained their consent to reward all the net profits of Yihuixingxing to Dong Yuhui.

How much is the reward? The announcement of the sale of Yuhuixing by Dongfang Zhenxuan also disclosed the financial data of Yuhuixing for the first time. Yuhuixingxing had a pre-tax profit of 189 million yuan and a net profit of 141 million yuan from December 22, 2023 to June 30, 2024. This also means that the reward mentioned by Yu Minhong may be as high as 140 million yuan.

Yihuixingxing disclosed its financial data for the first time.

However, some netizens also said that Yuhui Tongxing (Beijing) Technology Co., Ltd. was established on December 22, 2023. The profit miracle it created in just 7 months is itself the result of the hard work of Dong Yuhui's team.

Because it can be compared with the profit of Oriental Selection. Although Oriental Selection has not yet released its latest financial report, according to the semi-annual report from June 1 to November 30, 2023, during this period, Oriental Selection's total revenue was 2.795 billion yuan, a year-on-year increase of 34.4%; net profit was 249 million yuan, a year-on-year decrease of 57.4%; during the reporting period, Oriental Selection's total GMV was 5.7 billion yuan.

The net profit of Dongfang Zhenxuan from June 1 to November 30, 2023 was 249 million yuan, while the net profit of Yuhui Xingxing from December 22, 2023 to June 30, 2024 was 141 million yuan. It is not difficult to see that Yuhui Xingxing's pull on Dongfang Zhenxuan's performance is self-evident.

At the same time, Yu Minhong revealed that Dong Yuhui held the equity purchase money needed by Huixingxing, and Yu Minhong also arranged the payment in accordance with the rules of listed companies and the company's articles of association. Yu Minhong later explained in the comment section, "What this means is that I arranged the money for Yuhui to purchase the company, and the company is a gift to Yuhui."

In response to this, Dong Yuhui also commented, "As I mentioned in my statement, the equity purchase funds were fully supported by Mr. Yu in accordance with the rules of listed companies. In addition, Mr. Yu also supported our operating system for free. I personally and Yuhui Tongxing are very grateful to Mr. Yu." It is understood that in order to ensure the normal operation of Yuhui Tongxing's business, Dongfang Zhenxuan, with the approval of the board of directors, will deliver the developed information system to Yuhui Tongxing free of charge.

In the eyes of industry insiders, this is a rare case where a big IP and a company can finally "break up" decently. For this, Yu Minhong gave up "huge interests" and demonstrated "an unexpected big picture."

Not only that, Oriental Selection and New Oriental also caused a stir in the capital market. Affected by the news of Dong Yuhui's resignation, New Oriental's US stocks plunged before the market opened on July 25, falling 10% at one point, and the decline has now narrowed to 1.37%. As of the close of July 25, Oriental Selection's share price was HK$12.4 per share, which has fallen by about 80% from its historical high in January 2023.

Liu Siyi, founder of Qun Xiang, said that the stock prices of Dongfang Zhenxuan and New Oriental will definitely experience drastic fluctuations, but Yu Minhong will definitely handle it, "because Yu Minhong has experienced too many New Oriental Internet celebrities leaving, this is no problem. Yu Minhong, who said 'I was on the verge of collapse', will continue to collapse, continue to revive, continue to admit mistakes, and continue to rise."

Why Dongfangxuan insists on "de-Dong Yuhuiization"

"Even though he foresaw the shock in the capital market, Yu Minhong ultimately made the decision to let go of Dong Yuhui, which shows Yu Minhong's determination to cut ties this time," commented an industry insider.

Looking back at the speeches of Yu Minhong and Dong Yuhui during this period, there seems to be a trace. On May 31, Yu Minhong said in a live broadcast with Zhang Wenzhong, the founder of Wumart Group, "Dongfang Zhenxuan is also in a mess now, and I don't have any ability to give you any suggestions." After that, Dongfang Zhenxuan's stock price fell for several days, and Yu Minhong had to come out to clarify that "it's a mess" is his habitual expression.

It can be seen that the "chaos" of Oriental Selection has become a "heartache" for Yu Minhong. Behind this, there is no way around the long-term public opinion against Oriental Selection and Yuhuixing, and there is no way around the uncertainty surrounding Dong Yuhui. Dong Yuhui's status has become a barometer of Oriental Selection's stock price. His every move and every word affects the capital market; Dong Yuhui's stay or departure has also become a shackle and fetter for Oriental Selection.

Similarly, Dong Yuhui, who has been popular for two years, is also exhausted physically and mentally, with fatigue written all over his face. "I have serious sleep disorders and rely on various sleep-promoting drugs all year round." On June 9, Dong Yuhui said in a program, "I am very resistant to selling things. To be honest, I still don't enjoy this job today." Although he feels that his work is meaningful, he does not feel happy. Dong Yuhui also responded to his views on the title of "Internet celebrity", saying that he is very disgusted with the word.

Yu Minhong explained the reason for the breakup on his personal public account. He said that he had been working hard to maintain the co-development of the original business of Oriental Selection and the business of Huitongxing. Although there was a certain competition between the two parties, he did not think it was a problem. He just tried his best to coordinate resources and provide support.

However, as a company based on the Internet, the power of public opinion often affects the company's development. He said that there has been no obstacle in the communication between him and Dong Yuhui so far, but the complex public opinion disputes, coupled with the guidance and rumors of a few forces with ulterior motives, directly led to the estrangement between Dongfang Zhenxuan and Yuhui Xingxing. "This public opinion environment has led to huge uncertainty in the development of both companies, the stock price has fluctuated violently due to external influences, and the company's credibility and reputation have dropped sharply."

Yu Minhong said that in order to ensure that Huixingxing has a better development platform and avoid business conflicts and public opinion disputes, he and Dong Yuhui negotiated repeatedly and finally reached an intention to transfer 100% of Huixingxing's shares to Dong Yuhui himself. Yu Minhong finally chose to let it go, and some netizens said that this was related to his trip to Tibet in April.

On July 21, Yuhuixingxing moved from New Oriental headquarters to the 3rd floor of the Internet Finance Center in Haidian District, Beijing. The map shows that the location is more than 200 meters away from the New Oriental building and is next to the Douyin headquarters office area. According to Yu Minhong, Yuhuixingxing needs a new office space, and the site search, transaction negotiation, and work area decoration are all completed by the professional team of New Oriental Assets. Now, the Yuhuixingxing team has moved into the new district office. At the same time, Yu Minhong is also working hard to pay attention to the business development of Oriental Selection, design business plans, pay attention to the physical and mental health of anchors, work hard to formulate the company's development strategy, and maintain communication with the board of directors.

Dong Yuhui also responded to the incident on his personal Douyin account, "Taking into account the current actual situation and development plan, after friendly consultation and unanimous decision by both parties, the company will start to operate independently."

Although both Yu Minhong and Dong Yuhui were very restrained in their statements about the reason for their "breakup", some industry insiders believe that this is inevitable. Liu Siyi, the founder of Qun Xiang, said on his video account, "IP must be independent, and must be established as a super self-employed business, because IP must achieve its own success." In the live broadcast industry, the construction of a personal big IP is a systematic project that requires the anchor to have a clear positioning, unique personality, high-quality content, strong interactive ability and continuous innovative spirit. "I can understand Dong Yuhui very well, because an IP with huge energy must be involved in the decision-making level, otherwise no one can be his leader and boss. As an IP, he carries a lot of energy, and any decision or the mechanism of any large company is an obstruction."

In addition to the mechanism problem, the distribution of benefits is also a focal issue faced by big IPs. At the end of last year, when the "Little Composition Incident" was fermenting, Li Hao, founder of Kas Consulting, commented that "If the top Internet celebrities have too much influence on the performance and account for too much, it will be difficult for the boss to sleep well. The business model of MCN is a test of human nature. If the influence of Internet celebrities in an MCN is too great, how much is enough? It's hard to say. Anyway, Li Ziqi feels that it is not enough, and Langweixian still feels that it is not enough after taking 70% of the profits. A relatively stable model is a husband-and-wife team, but the problem with husband-and-wife teams is that it tests their relationship."

How much profit should the top anchors take? Luo Yonghao once compared several top MCNs, "Qianxun, Xinxuan, and Xiao Yangge are all family businesses, and the profits are all in their own family, there is nothing to say about this. The founder of Mei ONE is not Li Jiaqi. Li Jiaqi originally had only a small amount of shares, but after the success, he has long been adjusted to a major shareholder (even if not the single largest shareholder), although he is definitely not a true entrepreneur today. Media reports show that Li Jiaqi takes most of the profits in the company. This is not the kindness of the boss of Mei ONE, but a fair distribution of market value."

Walking with HuiEastern Selection faces its own troubles

After Dong Yuhui parted ways with New Oriental, the business development of Yuhui Tongxing and Oriental Selection also attracted attention.

E-commerce expert Uncle Ni told Nandu reporters, "Dongfang Zhenxuan became a super company by relying on its super IP. If it loses its super IP, it will still be a good company, but not a super company."

Data shows that as of July 22, the number of followers of the main Douyin account of Oriental Selection was 29.91 million, while the number of followers of the Douyin account of Yuhuixingxing rose to 21.399 million.

From the performance point of view, on the Douyin platform, the data of Dongfang Zhenxuan's live broadcast room has almost always been crushed by Yuhui Tongxing. According to data provided by the third-party data platform Chanmama, during the Douyin 618 this year, Yuhui Tongxing ranked third in sales on the entire platform, far exceeding Dongfang Zhenxuan, which ranked 15th. And this is the first annual promotion since Yuhui Tongxing was established.

But some people question whether Yuhuixingxing can continue to be independent after leaving Dongfangxuan. Nandu reporters learned that since its establishment, Yuhuixingxing has always sold products of third-party brands and no longer sells Dongfangxuan's own products. In terms of third-party product selection, Yuhuixingxing also focuses on food, agricultural products, books and other categories. Uncle Ni told Nandu reporters that from the perspective of the supply chain, Yuhuixingxing will not lack supply chain as long as it has traffic, and it will not be too bad no matter what it does. But quality control is still the biggest test, and whether it can maintain quality control is also the biggest challenge to whether Dong Yuhui can maintain a good reputation.

Unlike Huixingxing, which continues to sell third-party products, Dongfang Zhenxuan has been focusing on its own products. In June this year, Dongfang Zhenxuan held a self-operated new product launch conference in Beijing and disclosed the performance growth of its own products to the outside world for the first time. According to Dongfang Zhenxuan, during the second half of fiscal year 2024 (December 2023 to May 2024), the GMV of Dongfang Zhenxuan's self-operated products exceeded 3.6 billion yuan, a year-on-year increase of 108% and a month-on-month increase of 74%. As of now, the total number of Dongfang Zhenxuan's self-operated products exceeds 400, with 260 products on sale during the same period, and more than 100 products ranked in the top three of Douyin's product rankings.

In January this year, during the earnings call, Yu Minhong revealed that his requirement for the team was to reach 400 self-operated products by the end of 2024. Now, 2024 is only halfway through, and the goal set by Yu Minhong at the beginning of the year has been achieved.

In addition, Yuhuixingxing has only one live broadcast room so far, while Dongfangzhenxuan has established multiple matrix accounts on multiple platforms. Dong Zheng, a product spokesperson for Dongfangzhenxuan, said that the multi-channel strategy has driven the rapid growth of Dongfangzhenxuan's self-owned products. In terms of live broadcasting, the Douyin account of "Dongfangzhenxuan's self-owned products" has exceeded 100 million yuan in GMV for several consecutive months, becoming the third account of Dongfangzhenxuan on Douyin with a GMV of over 100 million yuan in a single month. This year, Dongfangzhenxuan will add more than 10 vertical accounts on Douyin and will gradually launch live broadcasts.

On the side of Walking with Hui, Dong Yuhui obviously values ​​the output of cultural and tourism content more than the goods itself. In the public response released today, Dong Yuhui reviewed the journey of Walking with Hui in the past six months, and he counted the live broadcasts of culture and tourism: "Live broadcast in Hubei in March, the wind and rain on the Jingzhou tower, the fishermen's boats on both sides of the Three Gorges; live broadcast in Henan in April, the youthful spirit under Songshan Mountain, the dream of Bianjing under the night lights; live broadcast in Hainan in May, witnessing Chang'e flying in the rain, feeling the tropical beauty in the warm wind; live broadcast in Shanxi in June, circling under the glazed tower to pray for blessings, and the shocking symphony of Hukou Waterfall; live broadcast in Hong Kong, small boats in the fishing port counted the city's past, and night walks in Victoria Harbour recalled the peerless splendor; live broadcast in Chongqing in July, a gluttonous feast in the fireworks, and ancient and modern gazing at each other on Kuizhou City."

Dong Yuhui also recalled that during this period, he interviewed celebrities and learned from writers, directors, actors, entrepreneurs, and scientists at home and abroad. As he said, "I am very resistant to selling things. To be honest, I still don't enjoy this job." But now, he has to transform from a worker and anchor to an entrepreneur, boss, and manager. As Dong Yuhui said in his response, "Leaving the protection of the port, starting from today, I will sail alone to the vast sea with Hui. The future is unpredictable, so I have to go all out."

Written by: Southern Metropolis Daily reporter Wang Chenchen