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A resignation announcement officially declared that Dong Yuhui and Yuhui Xingxing were "going solo".

On July 25, Oriental Selection Holdings Limited (Oriental Selection, 01797.HK) issued an announcement stating that Dong Yuhui has decided to no longer serve as an employee of the company and senior management of a merged affiliated entity of the company. The resignation was due to Dong Yuhui's career ambitions, commitment to his other careers and personal time arrangements, and took effect on the same day.

Dongfang Zhenxuan also announced that Dong Yuhui (buyer), Beijing New Oriental Xuncheng Network Technology Co., Ltd. (seller) and Yuhui Tongxing (Beijing) Technology Co., Ltd. (target company) entered into a sales agreement. According to which, the seller agreed to sell and the buyer agreed to acquire 100% of the equity of the target company for RMB 76.5855 million.

At this point, "Yihui Xingxing", which was established only half a year, and Dong Yuhui officially bid farewell to Oriental Selection. It has only been 7 months since the "Little Composition" incident at the end of last year.

Regarding the resignation of Dong Yuhui, the anchor of Oriental Selection, Yu Minhong, the founder of New Oriental and CEO of Oriental Selection, responded to the reporter of The Paper: "I know."

Yu Minhong (right) and Dong Yuhui (left) Visual China Photo

Shortly after the above announcement, Yu Minhong, founder of New Oriental and CEO of Oriental Selection, said in an open letter to shareholders of Oriental Selection that Yuhuixing was about to become independent. To express his gratitude, in addition to paying all the promised benefits, he had asked the board of directors and the compensation committee and obtained their consent to award all the net profits of Yuhuixing to Dong Yuhui. At the same time, the equity purchase money that Dong Yuhui held for Yuhuixing was also paid in accordance with the rules of listed companies and the company's articles of association. In order to ensure the normal operation of Yuhuixing's business, Oriental Selection, with the consent of the board of directors, will deliver the developed information system to Yuhuixing for free.

Perhaps fearing that the content of the open letter was not straightforward enough, on the evening of the 25th, Yu Minhong explained on the social platform, "I arranged the money for Yuhui to purchase the company, and the company is a gift to Yuhui." Yu Minhong said that of all the income, including all profits, obtained by Yuhui Tongxing since its establishment, Oriental Selection did not take a penny, and left it all to Yuhui and Yuhui Tongxing to support their continued development.

According to Oriental Selection, from the establishment of Yuhui Tongxing on December 22, 2023 to the end of June this year, Yuhui Tongxing’s net profit exceeded 140 million yuan in half a year.

In the open letter, Yu Minhong used the phrase "I will do anything for you" to describe his relationship with Dong Yuhui: "I wish Yuhui a prosperous business and a long journey! If Yuhui and Yuhui can use me in the future, I will do anything for you!"

"Dong Yuhui and the company's internal affairs have actually been at odds for a long time." An insider revealed to The Paper that from last year's "small essay" incident to the present, the conflict between Dongfang Zhenxuan and Dong Yuhui seems to have been hidden under the iceberg.

Oriental Selection is taking drastic measures?

"From my personal experience at New Oriental, I think Dong Yuhui left because he couldn't handle the pressure."

Dai Bin, who used to work as a project manager at New Oriental and then "left", and is now the chairman of Zhongyi Education and a member of the Guangdong Youth Federation, told the Pengpai News reporter that Dong Yuhui's resignation may be due to long-term high pressure, "he couldn't bear it psychologically" and "looking at his overall work state, he rarely smiles."

Dong Yuhui prepares for a live broadcast outdoors. IC data map

"Although Dong Yuhui has made so much money, he has not found peace of mind and has always been at the center of public opinion." Dai Bin said frankly, "If it was for profit considerations, he should have resigned at the end of last year, so all this is more likely due to psychological pressure."

However, the evaluation is divided. Several people in the live broadcast industry who have contact with Oriental Selection revealed that the view of him (Dong Yuhui) within Oriental Selection is different from that of the outside world. "Some people think that Dong Yuhui's 'bookishness' is a display to the outside world. The senior executives of Oriental Selection and New Oriental are reluctant to mention him more." Some Oriental Selection employees also told reporters that Dong Yuhui looks a bit serious in the company, not as lively as he is during live broadcasts.

There were signs that the two sides were not on good terms. In June this year, several merchants close to Yuhui Tongxing told reporters that although Yuhui Tongxing and Dongfang Zhenxuan are both part of the same system, they are already very independent from each other, equivalent to two independent teams. "They are both one company, but they are already quite separate."

The above-mentioned merchants revealed to reporters that at present, Huitongxing and Dongfang Zhenxuan both adopt a pure commission model that does not charge slot fees. Both parties have independent teams for investment promotion and product selection, but still partially share a system.

On July 21, Yuhuixingxing had officially announced that it had moved to a new office location, separate from Dongfangzhenxuan. The new office is located on the third floor of Beijing Internet Financial Center. On the day of the move, both entrances were strictly guarded by security personnel, and filming and visiting were not allowed on site. Through the glass door, you can see that the company's corridors are filled with flowers and blessings, and more than 100,000 netizens visited the new office through the live broadcast room.

Yu Minhong admitted in an open letter that around March, he and Yuhui met several times to discuss the subsequent development plan. He felt that the complex external and internal environment would not only put the company's operations in trouble, but also harm the long-term development of individuals and the company. In order to ensure that Yuhui has a better development stage and avoid business conflicts and public opinion disputes, after repeated consultations, he finally decided to ask the board of directors to agree to transfer 100% of Yuhui's shares to Dong Yuhui himself after the end of the fiscal year (May 31).

"Yu Minhong is a very decisive entrepreneur." Dai Bin said, "After the double reduction policy, New Oriental decisively abandoned the K12 business, cut off its arm to survive, and finally regained its vitality. Yu Minhong may have realized that there are deep-seated and difficult-to-solve problems in Oriental Selection. Now, while the relevant problems have not completely deteriorated, it is timely and effective to separate Huixingxing and Oriental Selection. This is to protect Dong Yuhui and the future of New Oriental."

"This separation is also a decisive way to survive." Dai Bin said frankly, "At least Walking with Hui can be saved, because Walking with Hui has not suffered all kinds of negative comments on the Internet. If Eastern Selection fails in the end, at least there is Walking with Hui. I don't believe that he (Yu Minhong) has nothing left with Dong Yuhui."

Can Dong Yuhui fly higher?

"Experience shapes the past, determines the present, and affects the future. We are lucky to meet such a good teacher and helpful friend on the road of life. Until now, I miss the days when I traveled with Teacher Yu and talked about everything together. I also look forward to having more opportunities to continue walking on the road with Teacher Yu in the future." In his resignation letter, Dong Yuhui said that considering the current actual situation and development plan, after friendly consultation and unanimous decision by both parties, the company will start to operate independently after Huixing. "The future is unpredictable, and we can only go all out."

Live broadcast data shows that since Dong Yuhui founded Yuhuixing, his live broadcast performance has clearly surpassed Dongfangzhenxuan. According to Huitun data, Yuhuixingxing has an average of 5.277 million viewers in the past month, with an average live broadcast sales of 100,000-250,000, while Dongfangzhenxuan's average live broadcast sales in the past month were only 50,000-75,000.

According to third-party data, in the first four months of this year, the sales of the "Traveling with Hui" live broadcast room were 932 million yuan, 411 million yuan, 620 million yuan, and 538 million yuan respectively. In contrast, the sales of the Oriental Selection live broadcast room in the same period were 639 million yuan, 269 million yuan, 329 million yuan, and 242 million yuan respectively.

It is worth noting that the problem revealed by Dong Yuhui's resignation is not only the contradiction between the two parties, but also the financial considerations behind it. This is also a thought that has never been seen before the live broadcast era: "If the core asset of a listed company is an employee, what kind of procedural justice should be followed in the process of divesting the value of this employee?" Dai Bin sharply commented that Yu Minhong's operation this time is equivalent to cutting off the most precious asset of Oriental Selection. Is this appropriate for a listed company? Will the shareholders of Oriental Selection easily agree? Does this comply with relevant financial regulations and regulatory regulations? Whether these issues have been resolved remains a mystery.

Yu Minhong (right) and Dong Yuhui (left). Image courtesy of Visual China

In his opinion, the future of Yuhuixingxing is immeasurable. "After getting rid of its historical burden, Yuhuixingxing is striding forward. It is very likely to become a leading e-commerce company, even as good as the existing three giants (Crazy Little Yang Ge, Simba, and Li Jiaqi). It may be listed separately in the future, and its market value is expected to exceed 10 billion yuan."

Does Oriental Selection still have a chance to survive without Dong Yuhui?

"E-commerce live streaming sells personality." Another person in charge of a leading live streaming room told The Paper that in the absence of a moat and threshold in the supply chain, Dongfang Zhenxuan relies on the perception of netizens. After Dongfang Zhenxuan and Yuhui Tongxing are separated, the problem of losing fans caused by the previous controversy related to Dong Yuhui will stop. For other anchors who have long been overshadowed by Dong Yuhui's halo, it also brings opportunities: there is also the possibility of promoting another "Dong Yuhui".

Pan Helin, a member of the Information and Communication Economy Expert Committee of the Ministry of Industry and Information Technology, analyzed to the reporter of The Paper that Dongfang Zhenxuan now needs to cultivate more IPs to replace the traffic loss after Dong Yuhui's departure. For Dong Yuhui, his future depends on his development ambitions. "In fact, Dong Yuhui can still maintain traffic by changing platforms, but judging from Dong Yuhui's public statements on his personal career planning, Dong Yuhui may not like the live streaming industry very much, so his next plan is actually difficult to predict. It depends on his personal choice."

Netizens seem to have made their choice in advance. On the 25th, third-party data from the Douyin platform showed that the "Walking with Hui" account gained 100,000 followers, while "Dongfang Zhenxuan" lost 13,000 followers. As of 23:00 on the 25th, the number of fans of "Walking with Hui" was 21.587 million, and the number of fans of "Dongfang Zhenxuan" was 29.862 million.

Will “Breakup” be the end of the story?

Tracing back to the fuse of the "estrangement" between Dong Yuhui and Oriental Selection, it was obviously the "small composition" storm at the end of last year.

On December 6 last year, the editor of Dongfang Zhenxuan Douyin left a message under a promotional video, implying that Dong Yuhui's live broadcast copy was not created by himself, but by the team. After that, Dong Yuhui called the editor "nonsense" during the live broadcast, and the two sides clashed, causing dissatisfaction among Dong Yuhui's fans.

Sun Dongxu, then CEO of Oriental Selection, later made a public statement in response, which not only failed to calm the situation, but also added fuel to the fire, triggering doubts about the "de-Hui" of Oriental Selection. After that, rumors quickly spread that Oriental Selection would "choose one" between Sun Dongxu and Dong Yuhui. The war of words caused by a "small essay" officially became a storm of public opinion that swept the entire Internet.

On December 16, Oriental Selection announced that Sun Dongxu was removed from his positions as executive director and CEO of Oriental Selection, and Chairman Yu Minhong would concurrently serve as CEO of Oriental Selection.

After that, Yu Minhong announced within one day that Dong Yuhui became the "Senior Partner of Oriental Selection", "Cultural Assistant to the Chairman of New Oriental Education and Technology Group" and "Vice President of New Oriental Cultural Tourism Group", and arranged for Dong Yuhui to resume broadcasting. The tense relationship between the two sides eased, and the outside world once believed that it had reached a happy ending.

However, Luo Yonghao, who was once a famous teacher at New Oriental and is now a popular internet anchor, believes that Oriental Selection will continue to promote the "de-Dong Yuhuiization" and Dong Yuhui's future in Oriental Selection is not optimistic. If Dong Yuhui can get a roughly reasonable return in the future "de-Dong Yuhuiization" process of Oriental Selection, it will be the best result.

"Struggle, conflict, and competition for resources are the norm within New Oriental." Previously, a former New Oriental employee told a reporter from The Paper that the fundamental reason why Oriental Selection became popular so quickly is that New Oriental's strategy of creating an internet celebrity economy with personal IP is a perfect match for the live streaming industry, and it can easily create a big internet celebrity like Dong Yuhui.

"It is precisely because New Oriental is very experienced in building personal IP that it naturally believes that it is not difficult to drive away the old Internet celebrity Dong Yuhui and create one or more new Internet celebrities to support the facade of Oriental Selection."

In the earnings call of Oriental Selection in January this year, Yu Minhong said that if Oriental Selection only relied on Dong Yuhui for development, it would not be a normal company. A normal company should develop in an all-round way, with all these anchors going all out for development and the company itself going all out for development. This is a bit like New Oriental at the beginning, because at that time New Oriental was created by me and more than a dozen famous teachers. At that time, these famous teachers contributed almost 100% of New Oriental's revenue. "I was the most famous teacher at that time, a bit like Dong Yuhui today."

As a well-known entrepreneur who has experienced many twists and turns, Yu Minhong has repeatedly been in the spotlight because of Dong Yuhui. Will the story of Dongfang Zhenxuan and Dong Yuhui really end with a breakup? The reporter from The Paper asked Yu Minhong about the future development strategy of Dongfang Zhenxuan, but received no response.

Since the beginning of this year, the cumulative decline in the share price of Oriental Selection has reached 55%. After Dong Yuhui left the live broadcast room, Oriental Selection’s former aura is gone. In June, it was frequently embroiled in controversy. First, some consumers pointed out that the style of Oriental Selection’s live broadcast room had suddenly changed. Later, when Yu Minhong was a guest in the live broadcast room of Wumart founder Zhang Wenzhong, he said: "Oriental Selection is now in a mess and has no ability to make suggestions." Yu Minhong then issued an open letter to apologize to Oriental Selection’s customers, shareholders and investors. Yu Minhong mentioned that the "Oriental Selection is in a mess" that was hotly discussed in the public opinion field was just a humble expression between friends. He said "Oriental Selection was messed up by me" in more than one place. This is a habitual expression, and he has said similar things on more than one occasion.

"I have appeared less frequently in front of the camera of With You, the main reason is that once I appear, I will be attacked intensively; I also dare not appear in front of the camera of Oriental Selection, because once I appear, I will also be attacked intensively. I am in a dilemma. As the founder of Oriental Selection, it has become extremely difficult to support the development of the company." In the open letter, Yu Minhong admitted that for Yu Minhong, this seems to be a challenge he has never encountered in his career.

An old horse is still full of ambition. As Yu Minhong, who has once again experienced entrepreneurial turmoil at Oriental Selection, how he will continue to manage Oriental Selection in the future is a mystery that has yet to be solved by the outside world.