news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

On July 25, Dong Yuhui officially resigned from Dongfang Zhenxuan and stepped down as a senior executive of related entities. In addition, Dong Yuhui will acquire 100% of the equity of Huitongxing for approximately RMB 76.59 million. After this battle, Dong Yuhui has completely gone solo, and his only relationship with Yu Minhong or Dongfang Zhenxuan may be his former boss and technical support.

A few details: 1) Yu Minhong and Dong Yuhui’s breakup was a friendly negotiation, and the departure was due to Dong Yuhui’s career ambitions, investment in other businesses, and personal time arrangements. In fact, due to various complex reasons such as the top anchor, public opinion, and stock prices, Dong Yuhui’s departure from Dongfangxuan was inevitable.

2) After leaving the company, Dong Yuhui will fully own Huixingxing, and the purchase price is 76.59 million, which is fully funded by Yu Minhong. In Yu Minhong's words, it was a gift, which is half right.

On the one hand, this company has no value without Dong Yuhui, which means that the value of the company itself is Dong Yuhui; on the other hand, Yu Minhong sold the company of a top anchor for only 76.59 million yuan, so Dong Yuhui really got a great bargain.

As we all know, the company belongs to the boss. If the boss does not give it to you or offers a very high price, you cannot get the ownership of the company.

3) In this breakup, Dong Yuhui received a breakup fee of 218 million. First, Yu Minhong paid 76.59 million yuan to purchase Yuhui Xingxing; second, Dongfang Zhenxuan did not take any of the profits of Yuhui Xingxing since its establishment; 3) According to the previous agreement, Yuhui Xingxing could have received half of the profits of Yuhui Xingxing, which is 70 million yuan, and the remaining net assets of 70 million yuan also belonged to Dong Yuhui.

Based on the above analysis, the breakup fee Dong Yuhui received this time was: 76.59 million yuan paid by Mr. Yu + 70 million yuan distributed as remaining profits, which is about 140 million yuan. Of course, it can also be generally said to be 218 million yuan.

4) In order to prevent the stock price fluctuation caused by Dong Yuhui's resignation, Oriental Selection decided to spend 500 million yuan for repurchase.

Regarding Dong Yuhui's resignation, the market has mixed opinions. Some people support Yu Minhong, while others support Dong Yuhui. The following are some mainstream opinions:

1) Some people think that Yu Minhong has a big vision: Many people think that without Yu Minhong, there would be no Dong Yuhui today. It was Yu Minhong who made Dong Yuhui successful. As Dong Yuhui became more powerful, Yu Minhong chose to part ways with him decently and gave Dong Yuhui away for free. After all, other businessmen would not let go of a cash cow so easily. At most, both sides would suffer losses, but Yu Minhong did it very decently and gently.

2) Some people think that Yu Minhong backstabbed Dong Yuhui: If Dong hadn't been exploited, he would have made at least a few billion yuan, and he should have given it to the shareholders from the beginning. Dong Yuhui's value is far more than that. Yu Minhong had planned this breakup long ago, and this breakup was Yu Minhong's way of getting rid of Dong Yuhui without wasting any effort.

Some netizens put it more vividly: use the company's money to buy the company's subsidiary and give it to Dong Yuhui, and the market value of this subsidiary is still supported by one person. The company's money has not been lost a penny, the impact on Oriental Selection is also the smallest, and the board of directors will not have any objections. The de-Dong Yuhuiization is completed in the smartest way. This is a unique trick.

3) Dong Yuhui and Yu Minhong parted ways in a dignified way, which can be said to be a win-win situation. On the one hand, Mr. Yu changed the stereotype of being a miser, received fewer abuses from "mothers-in-law", retained a good reputation, and was admired by the public for his big picture; on the other hand, Dong Yuhui had his own company and successfully achieved solo success. From now on, you have your glory, I have my traffic, and we both have a bright future.

However, from the perspective of the capital market, Yu Minhong's 76.59 million yuan sale of Yu Hui Tongxing is tantamount to a fire sale. On the community platform, many shareholders of Dongfang Zhenxuan have been complaining: Dong Yuhui's resignation and the separation of Yu Hui Tongxing have completely sacrificed the interests of small and medium shareholders of Dongfang Zhenxuan.

Why do I say that? First of all, the net assets of Yuhui Tongxing are 76.59 million, which does not mean that the company is only valued at 76.59 million. With a profit of 140 million, even if the valuation is 18.3 times that of Oriental Selection, the corresponding market value is 2.56 billion. 76.59 million is tantamount to a bargain.

Look, according to the data for the first half of 2023, Dongfang Zhenxuan achieved a net profit of 249 million, and the company's market value is 12 billion Hong Kong dollars. So, with a net profit of 140 million, is it okay for Huixingxing to be 6 billion? In any case, 76.59 million is definitely a serious underestimate.

Secondly, as a financial blogger said, when Dong Yuhui left first, the valuation of Huitongxing was greatly reduced, and the value of the intangible assets related to Dong Yuhui was completely annihilated for the shareholders of Dongfang Zhenxuan. In other words, the valuation of Dongfang Zhenxuan is linked to the intangible value of Dong Yuhui, and 76.59 million is tantamount to another cheap sale.

Furthermore, small shareholders were not convinced: an important asset of a listed company, with a mature supply chain and sales channels, a profitable business model, and a large amount of undistributed profits, suddenly became Dong Yuhui's personal property. For small shareholders, this was a sudden disaster.

Finally, let's look at a set of data, and the underselling of Yuhuixingxing is more obvious. According to public market information, in the Douyin sales influencer list in May, Yuhuixingxing ranked second with sales of 533 million yuan, while Dongfangzhenxuan ranked sixth.

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, and the gap is gradually widening.

Jinshi Zatan believes that there are two reasons for the low price: first, it is more convenient to give it to Dong Yuhui, because it is too expensive. Not only Dong Yuhui cannot afford it, but Yu Minhong's bid is too high, which is a loss; second, it is to prevent it from being valued against Oriental Selection to prevent too high a valuation from having a negative impact on Oriental Selection.

From this perspective, losing Yuhui Xingxing, or losing Dong Yuhui, is a major negative for Dongfang Zhenxuan. On the community platform, some people said that 20cm could not be stopped, others said a drop of 30-40cm, and some netizens even gave a 90% drop.

The following is Jinshi Zatan’s personal opinion, which does not constitute investment advice and is only for communication. Please do not criticize me if I am extremely wrong.

1) Since March this year, the share price of Oriental Selection has been nearly halved, from 25 yuan at that time to 12.4 yuan now. What happened in March?

Yu Minhong said that around March, the two met several times to discuss the future development of the company, and finally decided to transfer Huixingxing to Dong Yuhui himself, which was actually a separation. In other words, the institutions or investors who smelled the smell have been running away, and what they are running away is Dong Yuhui's resignation.

2) What is the biggest problem between Dong Yuhui and Yu Minhong? Some people have many conspiracy theories here: Yu Minhong is de-Dong Yuhui, Dong Yuhui has always been rebellious, etc.

Jinshi Zatan is more inclined to believe that Yu Minhong is not only a capitalist and a boss, he is also an entrepreneur who has experienced three ups and downs, and is a role model for each of us to learn from; and Dong Yuhui has a literary temperament and also has his own core competitiveness. It can be said that the two are in a relationship of Bole and Qianlima, and they complement each other.

However, due to the fermentation of market public opinion, various conspiracy theories, and various capital class theories, Yu Minhong and Dong Yuhui have never been able to coexist. Either it is the abuse from the mother-in-law or the public opinion crisis of Oriental Selection, which has brought a bad impact on the stability of Oriental Selection.

On the contrary, with Dong Yuhui's departure, the stock price of Dongfang Zhenxuan is likely to vote with its feet in the short term, but in the long term, it still depends on Yu Minhong's ability to integrate resources, his ability to manage his anchors and the company's supply chain capabilities. However, since Dong Yuhui is leading the team alone, on the one hand, it tests his management ability, and on the other hand, he has to be careful of traffic backlash. Dong Yuhui will face greater risks if he goes solo in the future.

In summary, Jinshi Zatan believes that the major negative news about Oriental Selection has actually been released almost completely, but it is still possible to fall by 20% during the trading session tomorrow and finally close down by about 10%. There will be pressure in the short term, but as the negative effects of de-Dong Yuhuiization gradually take effect, Oriental Selection is expected to usher in a period of stable development.

The comments on stock prices in this article are purely personal opinions and do not constitute investment advice. Please bear the resulting investment losses yourself!