Is 358 million Yu Minhong and Dong Yuhui's "breakup fee" or "cooperation intention money"?
Author: Li Mengran Editor: He Xiang
出品：零售商业财经 ID：Retail-Finance
An announcement of "Dong Yuhui's resignation" issued by Oriental Selection on the Hong Kong Stock Exchange on July 25 made the "love and hatred" between Oriental Selection, Walking with Hui, Yu Minhong, and Dong Yuhui once again become a hot spot at the moment.
According to the public statement, at present, in addition to the 141 million yuan share that has been received and the net profit of 141 million yuan that has not been received, Yu Minhong also paid 76.5855 million yuan out of his own pocket to "send" Dong Yuhui with Hui, Dong Yuhui will accumulate more than 358 million yuan, not including his personal salary selected in Dongfang and the equity income granted by the company.
Source: Hong Kong Stock Exchange
This gift of robes and horses, quite Mengde's heroic spirit, is very different from Yu Minhong's joke when he invested in Li Bin, "I invested this money, if you don't let me make money, I can kill you".
Of course, in the face of "Dong Yuhui and his peers with Hui are independent from Dongfang Selection", Yu Minhong released at least two clear signals to the outside world: first, Dongfang Selection will no longer have an anchor to establish an independent platform, emphasizing that its anchors share blessings and woes, weal and woe; Second, based on the continuity of values and content models, Oriental Selection bets on the latter between the Internet celebrity model and the product route, and will benchmark Sam's Club on the product side in the future, and rely on about 800 teaching points of New Oriental to explore the Oriental Selection member experience store under the OMO model.
On the other hand, Dong Yuhui is 100% in charge of the "Walking with Hui", although it is ostensibly out of the control of Dongfang Selection, but from some details (Dong Yuhui said: Mr. Yu also supported our operating system for free) It is not difficult to get a glimpse of the "broken thread" between the two, not to mention that most of the government resources, suppliers and customer resources that go with Hui are still in Dongfang Zhen.
It's no wonder that industry insiders will question this seemingly harmonious and decent gathering and dispersion drama.
"Are Yu Minhong and Dong Yuhui involved in the transfer of interests and insider trading of listed companies?" Zhao Hejuan, founder of Titanium Media, pointed out sharply that Dong Yuhui's resignation is essentially a typical MBO (management buyout) transaction, which may have a number of corporate governance structure defects such as incomplete information disclosure, illegal sources of acquisition funds, unfair and reasonable pricing mechanisms, and serious conflicts of interest.
Source: Lao Yu's gossip public account
"Retail Business Finance" believes that from the governance of listed companies to the follow-up operation and management level, the "separation" has to some extent dispersed the development risk of deep binding between super-head anchors and MCN institutions, but the two after independence do not rule out the possibility of future cooperation and deep interest binding.
In other words, if you want to achieve Yu Minhong's hope of "Oriental selection and friendly competition with Hui peers, or even competition with mutual blessings", change the situation that Dongfang Selection's fan growth speed and sales data are not as good as those of Hui, and help Hui peers quickly solve a series of problems such as quality control and insufficient supply chain strength, the most direct way is to enlarge the long board: that is, to increase front-end sales and maintain the traffic "Changhong" in the Internet celebrity mode; One focuses on back-end supply and explores business model innovation based on the concept of "product first".
01 Yu Hui "cut the table", or "secretly walked"?
The most intuitive fuse for Yu Minhong and Dong Yuhui's "cutting seats" was the "small composition" turmoil in December last year. At that time, Sun Dongxu, CEO of Oriental Selection, was out, Yu Minhong chose to keep the head anchor, and set up a separate "Walk with Hui" for Dong Yuhui.
There is no doubt about Dong Yuhui's commercial value and ability to "make gold", and it is no wonder that during the turmoil, Gaotu "poached" and "Liu Qiangdong and Dong Yuhui had secret talks, hoping that Dong Yuhui could join Jingdong" and other rumors were rampant.
Everyone has a love for talents, not to mention Yu Minhong, who has been on the battlefield for many years, and Dong Yuhui's importance to Yu Minhong, Dongfang Selection and its shareholders is also self-evident.
So, in the face of Dongfang Selection's performance guarantee and external opponents' eyesights, will Yu Minhong easily let go of Dong Yuhui's hand? Or, can Dong Yuhui escape from Yu Minhong's palm?
At the level of personal relationships, the master and apprentice who used to "drink wine in a big bowl, eat meat in a big piece, and sing loudly", and even be as close as father and son, are now cut off from the entanglement of interests, which is difficult to convince. Even after Dong Yuhui's "resignation", Yu Minhong publicly stated that "it will not affect his personal relationship with Dong Yuhui".
At the level of site selection and operation of the new company, the new office area of the divested company with Hui is only 209 meters away from New Oriental. Moreover, judging from public information such as the conference call, Yu Minhong may not have signed any agreement with Dong Yuhui to restrict competition.
Source: Walking with Hui
Can Dongfang Selection not be afraid of the independent development of "Dong Yuhui IP"? The answer is obvious.
Judging from the (third-party) data after the announcement of the "resignation", from the 25th to the 29th, the total number of fans with Hui has increased by 600,000, with an average daily increase of 120,000 fans, and the total number of fans has exceeded 22 million. Although Dong Yuhui has not been on the air since the announcement, the sales data is still bright. According to the third-party data platform, the total GMV has exceeded 100 million yuan in the 5 days after the announcement, the sales volume exceeded 50 million yuan on the 26th, and the sales volume in the remaining days have also stabilized at more than 10 million yuan.
To sum up, Dong Yuhui's "resignation" drama is more like a superficial cut under the deep binding of interests, and perhaps the two sides have never thought of head-on competition at all.
And the "fake breakup" staged by Yu Minhong and Dong Yuhui also has traces to follow. "De-heading" has become the main theme of the live streaming industry, and when MCN institutions or brands cultivate "exclusive" head anchors, it seems to be guaranteed by GMV, but in fact, it increases the risk cost of enterprises.
The "lose-lose" of Li Ziqi and Hangzhou Weinian, who were once smash hits, is a lesson from the past. Obviously, Yu Minhong and Dong Yuhui, who cherish each other, are unwilling to come to this point.
For Yu Minhong, he knows that there will be no next Dong Yuhui in Dongfang Selection, and he will not support another "Dong Yuhui" to increase uncertainties; For Dong Yuhui, in this Internet era where gold is everywhere, Yu Minhong is his first nobleman, and "separating" Yu Minhong is harmful and not beneficial.
"Retail Business Finance" believes that Dongfang's selection and "separation" with Hui actually hide deeper, more secret, and unknown ambitions, not only will they not become competitors who want to fight each other in the outside world, on the contrary, they are more inclined to "multiple friends".
02 Is the resignation suspicious a repetition of the listing routine?
In January this year, the first live broadcast on the Douyin platform with Hui won 150 million sales, and the highest number of online users reached 1.7 million, creating a miracle of broadcasting. Daduoduo data shows that the number of fans in the past month is 5 times that of Dongfang Selection. Since the beginning of this year, on the Douyin goods list, Walk with Hui has continued to lead Dongfang Selection.
As of 18:00 on July 30, 2024, the number of followers of Dongfang Selection's main account on Douyin is 29.809 million, while the number of followers of the main account of Walking with Hui is 22.104 million. The number of fans of the former has risen and fallen slightly due to the start of the broadcast, but the latter has continued to rise.
Source: Douyin
In terms of platform influence and profitability, the high commercial value of Dong Yuhui's IP is the core asset of Dongfang Selection. So, what is Yu Minhong's intention to "generously" divest core assets?
From the perspective of the governance of listed companies, industry insiders pointed out the possible transaction flaws and problems of "Dong Yuhui resigned, Yu Min and Hong Hao sent".
First, according to the Administrative Measures for the Acquisition of Listed Companies and the Administrative Measures for the Disclosure of Information on Changes in Shareholding of Shareholders of Listed Companies, the management must fully and accurately disclose relevant information during the acquisition process, while Dongfang Selection and Huihui Peer did not have a detailed decision-making process on the basis of the related party transactions, which lacked timeliness and transparency.
Second, the transaction uses a cost approach rather than a market or revenue approach. There is a view that the cost method lacks a rational basis in this transaction. One of the points of contention is that the value of the company to shareholders is not its cost, but its profitability. However, the intellectual property rights related to the registered trademarks, copyrights and brand names of Dong Yuhui were determined to be of no material value because they were expected to no longer bring economic effects to the company after Dong Yuhui's departure. In other words, the valuation of the IP of "Dong Yuhui" has not been taken into account.
Source: Oriental Selection Announcement
However, Dong Yuhui's official resignation was on July 25, and the valuation report was issued on July 24, which shows that there are loopholes in the report.
Some netizens thought that the valuation of the company with Hui was too low, questioned the existence of cheap sales, and said more bluntly: "Billions of people are acquired, but Yu Minhong only sold tens of millions to Dong Yuhui alone".
There are loopholes in the management and operation level, the acquisition process level and the legal level, and this rather "child's play" resignation turmoil also proves that the acquisition is just a play in front of the stage.
The trader behind it is naturally Yu Minhong, who is well versed in the way of capital and has experienced the ups and downs of the business world.
Take Dongfang Selection, which once made the outside world question the "backdoor listing", for example, since New Oriental Online officially changed its name to Dongfang Selection, the "first online education stock" of Hong Kong stocks listed in 2019 has changed business and has become the "first live broadcast e-commerce stock" of Hong Kong stocks today.
After the establishment of "Walking with Hui", Dongfang Selection performed poorly in the capital market due to "de-Hui". Now, after the divestment of Hui Peer, the core assets of the original Oriental Selection have also been integrated into Hui Peer.
"Any entrepreneurship that is not aimed at making money is a hooligan", as an entrepreneur with rich business experience, Yu Minhong has always been an extraordinary business leader, legendary teacher, and inspirational idol in the eyes of the public.
Although Yu Minhong said to the outside world: After Dong Yuhui becomes independent, individuals, New Oriental and Oriental Selection will not hold shares with Hui, but is it really in line with his entrepreneurial creed to give up his hands to Hui?
It is worth noting that on July 26, the stock price of Oriental Selection fell by nearly 30% intraday. If small and medium-sized shareholders tearfully "pay" for Dong Yuhui's solo flight, then who will benefit from this turmoil? As for whether Walk with Hui will become the next "Oriental Selection" in the capital market, it is worth playing.
03 The division of labor before and after may be the optimal solution
On the conference call on July 26, Yu Minhong revealed that at present, Oriental Selection already has its own APP, and Oriental Selection is trying to explore the mode of combining online and offline, and will rely on more than 800 teaching points of New Oriental to open ground stores, such as membership stores.
In recent years, Dongfang Selection has continued to increase its self-operated brands. Since the launch of the first self-operated product durian in April 2022, Dongfang Selection's self-operated product brands have expanded from fresh food to juice, coffee, tea, bedding, etc., and the sales volume of the self-operated grilled sausage has exceeded 200 million in the past two years.
Among them, Dongfang Selection invested nearly 20 million yuan to expand its own brand roast sausage factory in Jiaozuo, Henan Province, covering an area of 14,000 square meters, mainly producing pure meat sausage products.
Figure: Dongfang selects its own products
Some time ago, Oriental Selection held a self-operated new product launch conference in Beijing, and released 7 new self-operated products in summer to the outside world, including Oriental Selection's self-operated mineral water, crayfish, sour plum soup, summer cool quilt, T-shirt, new Chinese short sleeves, cool bra, etc., which is also the first time that Oriental Selection has entered the bottled water market.
After the "de-glorification", the business tone of Dongfang Selection has changed: no longer rely on super-head anchors, and be the self-operated brand with the highest ROI but the most difficult to practice. In fact, in addition to Dongfang Selection, MCN institutions such as Three Sheep and Xinxuan have also focused on the supply chain side in recent years, and it has become the general trend to control products and go upstream.
In the final analysis, although it is difficult to be self-employed, it is better than being overtaken to "coerce traffic to order the princes". The "small composition" turmoil just made Yu Minhong deeply and intuitively feel the market risk of being out of his control and manipulated by public opinion, which sounded the alarm for his subsequent development.
Yu Minhong once said, "Cyber attacks don't matter to me anymore, but they do have a significant impact on the company's business development." In other words, you can lose face, you can't lose money. Luo Yonghao also commented on him: Pick the door, iron rooster.
The lessons from the past and the decisive style of action determined that Yu Minhong led Dongfang Selection to "abandon" the overhead and turn to the building of its own brand and the construction of the supply chain system.
After independence, there are many problems to be solved. At present, in addition to not selling Dongfang Selection's own products, most of the other products in the live broadcast room of Hui Walk with Hui coincide with Dongfang Selection.
This means that in addition to Dong Yuhui's IP, there is no second "trump card" that can be played with Hui, and after leaving the relatively mature management and resource support of Dongfang Selection, these problems will be infinitely magnified in Hui.
Dong Yuhui said in the response letter: "Taking into account the actual situation and development plan...... We don't know what the specific development plan is, but now Dongfang Selection wants to transform from MCN to a member store, and Hui is under pressure in the selection and supply chain.
In the future, if Dongfang Selection and Hui Walk carry out a new round of strategic cooperation in the name of two independent companies, wouldn't it be a matter of course? That is, the former focuses on the supply of goods and provides good goods for the live broadcast room with Hui; The latter concentrates on front-end sales, cultivates more head anchors, and provides sales channels and traffic exposure for Dongfang to select its own products.
It is worth noting that Dongfang Selection will actively cooperate with Douyin next. Then you might as well imagine: when Peer Hui and Dongfang Selection become competitors on the surface, will Peer Hui actively expand the live broadcast position and transfer the main position to the video account "hindered" by the pressure of resource inclination?
You must know that the video account has attracted people such as Luo Zhenyu, a pioneer in the field of knowledge payment, to build a nest, so will the next one be Dong Yuhui, who is a "knowledge carrying"?