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Seven months after the "short essay" incident, Yu Minhong, the helmsman of Oriental Selection, and "top anchor" Dong Yuhui published another "short essay" about their relationship, but this time it was no longer a proof in the face of outside doubts, but a complete farewell.

On July 25, Oriental Selection (HK01797, share price HK$12.400, market value HK$12.788 billion) officially announced the resignation of Dong Yuhui. Dong Yuhui acquired control of the company "Traveling with Hui". The announcement showed that Dong Yuhui agreed to purchase 100% of the shares of "Traveling with Hui" for RMB 76.5855 million. Yu Minhong also explained the source of this money in his personal Douyin account: "I arranged the money for Yuhui to buy the company.The company was given to Yuhui.”

At around 7 o'clock that evening, the number of followers of the Douyin account of "Yuhui Xingxing" was 21.495 million; by 11:50 p.m., the number of followers of "Yuhui Xingxing" had reached 21.596 million.The number of followers increased by more than 100,000 that night.During the same period, the number of fans of Oriental Selection fell by about 10,000.

“Fame brings trouble.” Ever since this New Oriental teacher who looked a bit like a Terracotta Warrior became popular for selling products in both Chinese and English two years ago, he and the live broadcast room behind him have always been a success or failure because of traffic.

With sales performance setting new records again and again, Dong Yuhui has gradually become the "golden signboard" of Oriental Selection. However, his "mother-in-law" is increasingly worried that he will "overshadow his boss."

The worries came true. The "small composition" incident at the end of last year caused a lot of controversy. In the end, Yu Minhong "shed tears and executed Ma Su", dismissed the former CEO of Oriental Selection, Sun Dongxu, and let Dong Yuhui set up his own business.

Even starting a new business could not hide its edge. As soon as it was established, "Traveling with Hui" often surpassed the performance of Dongfang Zhenxuan. Along with the performance, there was also pressure. Dong Yuhui repeatedly said in public that he was "under great pressure" and "very reluctant to sell goods."

A reporter from the Daily Economic News learned from an industry insider close to Yuhui Xingxing in early July that"Because there are different factions within the company," Dongfang Zhenxuan and "Yuhui Xingxing" had "broken up" a long time ago, and the two teams have always been completely independent.

Finally, this summer, the star anchor chose to resign, and Yu Minhong, who nurtured him, could only help him get started and send him on his way.

"Leaving the port's protection, 'Walking with Hui' will sail alone to the vast sea from today (July 25)." In Dong Yuhui's farewell "small essay", the "Walking with Hui" that will soon be independently operated is a ship leaving the port. The boat is swaying, not knowing what the road ahead will be, but without the port of the ship, it will probably be difficult to adapt to the loneliness.

Screenshot of Dong Yuhui's live video

Dong Yuhui may receive a reward of 140 million yuan200,000 people flocked to the "Walk with Hui" live broadcast room

"A shocking event happened today. Congratulations to Yuhui!" After the announcement of Dong Yuhui's resignation,The message area of ​​the "Walking with Hui" live broadcast room was filled with words such as "congratulations" and "blessings", and online gifts continued to flow in.According to Jimu News, on the evening of July 25, two hours after the news of Dong Yuhui's resignation was released, the number of people online and entering the Douyin live broadcast room "Walk with Hui" soared, with more than 120,000 people online in the live broadcast room.The number of people entering the venue reached 200,000.

On the evening of July 25, Oriental Selection announced on the Hong Kong Stock Exchange that Dong Yuhui has decided to no longer serve as an employee of the company and a senior management of a merged affiliated entity of the company. The departure is due to Dong Yuhui's career ambitions, his commitment to other careers and personal time arrangements. Oriental Selection stated in the announcement that Dong Yuhui agreed to acquire 100% of the equity of "Walk with Hui" for 76.5855 million yuan.

It is worth mentioning that 76.5855 million yuan is the net asset amount of Huixingxing as of June 30, from its establishment on December 22, 2023 to June 30, 2024.Yuhuixing's net profit reached 140 million yuan.The price-to-earnings ratio is only 0.5 times.This is an extremely low selling price.

Oriental Selection Announcement on the Hong Kong Stock Exchange

"Mr. Yu also arranged the settlement of the equity purchase money required to acquire 'Traveling with Youhui' in a manner consistent with the rules and articles of association of listed companies." Regarding this sentence in Dong Yuhui's "small essay", Yu Minhong specially issued a second article to further explain: "This sentence means that I arranged the money for Yuhui to purchase the company, and the company is a gift to Yuhui."

Yu Minhong disclosed in an open letter that after discussion and agreement by the board of directors of Dongfang Selection, no matter how the company performs, Dong Yuhui will be given an attractive guaranteed income (cash + equity) to show his recognition of Yuhui's value. In order to ensure that Dong Yuhui can design the future of Yuhui Xingxing according to his own wishes, the company's board of directors did not make any requirements on the earnings of Yuhui Xingxing. Yu Minhong also promised that in addition to receiving the full guaranteed income, if Yuhui Xingxing has any earnings,Dong Yuhui can continue to receive half of the company's net profit.

Yu Minhong then said,Dongfang Zhenxuan did not take a penny of all the income and profits obtained by "Walk with Yuhui" since its establishment, and left all of them to Dong Yuhui and "Walk with Yuhui" to support their continued development.

Yu Minhong's generosity was confirmed by Dong Yuhui's statement: "'Traveling with Hui' will also be able to maintain the company's operations and expenses such as rent and employee wages for a period of time in the future."

Dong Yuhui also responded, "Thank you Mr. Yu for your concern, love, support and blessings for me and Yuhui. 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 are very grateful to Mr. Yu. I also look forward to having more opportunities to travel and chat with Mr. Yu in the future."

Dong Yuhui also responded to "flying solo"

E-commerce analyst Lu Zhenwang speculated in an interview with a reporter from the "Daily Economic News" that Dong Yuhui did invest in the company "With Hui Xing Tong", including attracting traffic and fans, arranging and decorating the newly relocated office, etc., but Yu Minhong said that all the profits of "With Hui Xing Tong" were given to Dong Yuhui, "maybe he already had money in his account, and (Yu Minhong) only spent part of it to pay the acquisition price."

To the onlookers, Dong Yuhui's decision came as a surprise, especially as "Traveling with Hui" had just moved to the new work area a week ago.

On July 21, during the first broadcast after the relocation, Dong Yuhui specifically thanked Yu Minhong for his support for the team. At that time, this was interpreted as an example of dispelling rumors of "going solo": "After I decided to find a new workstation, Mr. Yu said that he would fully support me and help me do these things, so I am very grateful to him."

This live broadcast firmly topped the Douyin live broadcast sales list that night. According to data from the third-party platform Feigua, the live broadcast helped the Douyin account "Traveling with Hui" gain 167,900 followers overnight, setting a new record for the number of followers gained in a single day in the past month.

Dong Yuhui's overwhelming traffic

Why didn't Oriental Selection want it anymore?

For Oriental Selection, Dong Yuhui is a "lucky general".

At the beginning, Dongfang Zhenxuan did not achieve the expected results. However, Dong Yuhui's humorous and witty live broadcast style made Dongfang Zhenxuan a hit, and led Dongfang Zhenxuan to the top of the live broadcast sales list.

FeiGua data shows that in the first four months of this year, the sales of the "Yuhui Xingxing" live broadcast room were 932 million yuan, 411 million yuan, 620 million yuan and 538 million yuan respectively; the sales of the Oriental Selection live broadcast room were 639 million yuan, 269 million yuan, 329 million yuan and 242 million yuan respectively during the same period.

Comparison of sales between Yuhuixingxing and Dongfangxuan

This also means that from its inception, popularity to independent operation, the traffic of Oriental Selection mainly comes from Dong Yuhui and his team. With such "huge wealth", why did Yu Minhong "think twice" and still choose not to do it?

Yu Minhong gave the answer in his latest letter to shareholders.

"What's complicated is that as a company based on the Internet, public opinion often affects the company's development. Although there has been no obstacle in the communication between Yuhui and me, the complex public opinion disputes, coupled with the guidance and rumors of a few forces with ulterior motives, directly led to the rift between Dongfang Selection and 'Walk with Yuhui'."In his letter to shareholders, Yu Minhong generously admitted that there has always been estrangement and contradiction between Oriental Selection and "Walk with the Glory".

It can be seen that since the beginning of this year, Oriental Selection has repeatedly been caught in the whirlpool of public opinion. Topics such as "Oriental Selection apologized again and again" and "Is Oriental Selection an apology company?" have been on the hot search many times.

In June this year, Dong Yuhui said in an outdoor radio program: "I am very resistant to selling things. To be honest, I still don't enjoy this job to this day." Because of this remark, the share price of Oriental Selection once fell by more than 10%, and accumulated a decline of 27.17% in 7 trading days.

On May 31, when Wumart founder Zhang Wen Zhong asked Yu Minhong for advice on live streaming sales in the live broadcast room, Yu Minhong bluntly said: "Oriental Selection is in a mess now, and I don't have any ability to give you any advice." Public opinion was in an uproar for a while. On June 3, Oriental Selection's share price fell from HK$18.6 per share to HK$16.52 per share, a drop of 9.92%; then it fell for three consecutive days, with a cumulative decline of 19.57%.

Since June, Oriental Selection has also caused controversy because of incidents such as a host using an inappropriate metaphor to describe the terrain of Guizhou and another host posting a Weibo in Guizhou mocking the long legs of spiders. Yu Minhong was directly "scolded" to the point of closing the Douyin comments.

Yu Minhong said in his shareholder letter:This kind of public opinion environment has led to huge uncertainty in the development of both companies. The stock price of Oriental Selection has fluctuated violently due to external influences, and the company's credibility and reputation have dropped sharply.“Not only will it put the company’s operations in trouble, it will also harm the long-term development of individuals and the company.”Yu Minhong spoke frankly.

This may also be the key reason why Yu Minhong took the drastic measure.

Repeated public opinion storms have also directly affected the stock price of Oriental Selection. As of now, the market value of Oriental Selection is about HK$12.8 billion, which has shrunk by nearly 40% from HK$18.9 billion at the end of May and has fallen by more than 60% from early December last year.

However, in Lu Zhenwang's opinion, Dong Yuhui's resignation does not mean all is well for Oriental Selection. "The GMV of 'With Hui Xing' accounts for half of the entire Oriental Selection. Dong Yuhui's resignation is equivalent to losing half of this half. From the perspective of the financial report, it is a huge negative impact, at least for the time being. It is hard to say whether it can get better in the future, because after all, Dong Yuhui took away half of the users."

No more Oriental SelectionHow far can Dong Yuhui go?

In fact, the conflict between Dong Yuhui and Oriental Selection had already erupted in the "Little Composition" incident last year. Although Dong Yuhui later became a senior partner of Oriental Selection, the internal problems of Oriental Selection were not resolved.

"They ('Eastern Selection' and 'Traveling with the Glory') are equivalent to two companies, operating completely independently." In early July, a reporter from the "Daily Economic News" learned from an industry insider close to "Traveling with the Glory" that the "Traveling with the Glory" team and Eastern Selection had previously "separated" and "Old Yu (Yu Minhong) is also very depressed because (both sides) are his people."

In Lu Zhenwang's view, it was an inevitable result for Dong Yuhui and Dongfang Zhenxuan to reach this point. Although Yu Minhong retained Dong Yuhui by giving him options and upgrading him to a senior partner after the "Little Composition" incident, conflicts had already emerged.

"The options given at that time were based on the market value of Oriental Selection of HK$30 billion. Now (the market value of Oriental Selection) is only more than HK$10 billion, and the value of the options is only 1/3 of what it was then. For Dong Yonghui personally, his salary has shrunk by 2/3. In addition, Dong Yuhui was originally quite stubborn and may have wanted to do it himself, as well as some factors of the team. Under the influence of multiple factors, Dong Yuhui eventually resigned." Lu Zhenwang analyzed.

Although he is a top star in Oriental Selection, Dong Yuhui has publicly stated more than once that he does not like the profession of anchor. Now that he has really left Oriental Selection, how far can Dong Yuhui go?

Pan Helin told the reporter of Daily Economic News that Dongfang Zhenxuan now needs to cultivate more IPs to replace the traffic loss after Dong Yuhui left, "This is quite a big pressure for Dongfang Zhenxuan." Dong Yuhui's development ambitions depend on his own.

"In fact, Dong Yuhui can still maintain his traffic by changing the platform, but judging from Dong Yuhui's public statements on his personal career plan, Dong Yuhui may not like the live streaming e-commerce industry very much, so his next plan is actually difficult to predict. It depends on his personal choice." Pan Helin analyzed.

As early as last year when Dong Yuhui's program was suspended due to the "Small Composition" incident, there were rumors that many teams wanted to "poach" Dong Yuhui, and the industry was also discussing whether Dong Yuhui would still have investment value after becoming independent.

Long Lu (pseudonym), managing partner and CEO of a well-known venture capital firm, once told a reporter from the Daily Economic News: "Anyone who starts a business is subject to a long-term comprehensive assessment of their ability. It depends on what kind of team they have built, what collaborations they have, who invested in them, etc. This is a series of overall issues, not something that can be solved by just one person."

Some investors also said that if there is a chance, they would definitely be willing to contact the top anchors. Another well-known investor, Zhou Ge (pseudonym), also told reporters that, like any entrepreneurial process, the income of key team members must match their contributions, and there must be a reasonable reward mechanism, otherwise it will not develop for a long time.

After Dong Yuhui left, what will happen to Oriental Selection next?

A senior insider in the live broadcast industry told the reporter of "Daily Economic News" that Oriental Selection became famous with the help of the personal ability of the anchor. After "getting rid of Dong Yuhui", it must put a lot of effort into operations, including how to select products, use lucky bags or welfare products to extend users' online time, control the rhythm of live broadcasts, and improve conversion rates.

"The future is unpredictable, so we have to go all out." Dong Yuhui said on his personal social media account. The two people who once made each other successful finally parted ways. The past grievances and hatreds were all turned over at this moment. The new story after parting ways is the biggest highlight of the future.

Business information shows that"Yihui Xingxing" is currently applying for a number of trademarks, including "Yihui Xingxing Yueshanhe", "Yihui Xingxing Powanjuan", "Yihui Xingxing Kanshanhe", etc. Earlier, a number of trademarks including Dong Yuhui, Fang Liange, and Mr. Fang in multiple categories were transferred to Yihui Xingxing by Dongfang Youxuan (Beijing) Technology Co., Ltd. (under Dongfang Zhenxuan).

"Yihui Xingtong" is currently applying for multiple trademarks

Taking the "Dong Yuhui" trademark as an example, according to Tianyancha information, Dongfang Youxuan (Beijing) Technology Co., Ltd. applied for multiple trademarks including Class 25 (clothing, shoes and hats), Class 41 (education and entertainment), and Class 32 (beer and beverages) on June 24, 2022, and was registered on June 14, 2023. In March this year, Dongfang Youxuan (Beijing) Technology Co., Ltd. successively transferred these core trademarks to Yuhui Xingxing.

reporter|Yang Xinyi Zhao Wenqi

edit|Cheng Peng Zhang Haini Du Hengfeng

Proofreading|Zhao Qing

Cover image source: Video screenshot

｜Original article from nbdnews｜

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