Note: This article is a special contribution from Gelonghui’s special writer, Financial Migrant Workers
Dong Yuhui, who is flying solo, and Yu Minhong, who is decent.
Oriental Selection and the stories of Walking with Hui, Yu Minhong and Dong Yuhui finally come to an end.
Since the end of last year, Dong Yuhui and Oriental Selection have been drifting apart -
has opened a new account and a new company. Just four days ago, Peer with Hui had just moved to a new campus. Dong Yuhui was in the video I would like to thank Yu Minhong for his strong support.
But four days later, Dong Yuhui and Oriental Selection completely "broke up".
From Dong Yuhui, Oriental Selection’s stock price also plummeted, falling 23.39% that day. Its market value evaporated by HK$3 billion, and it was immediately downgraded by several well-known institutions.
Compared with the beginning of last year, when the relationship between Oriental Selection and Dong Yuhui had not yet cracked, Oriental Selection's stock price has dropped by nearly 90%, and its market value has been wiped out by more than 70 billion.
This price is extremely heavy.
Of course, Dong Yuhui’s peak position at that time was also due to Dong Yuhui.
is now a dream.
For the melon-eating masses, the only good thing is probably that the "negatives" of , New Oriental, and Oriental Selection have been exhausted. In the future, it may be difficult for the stock price to fluctuate due to Dong Yuhui's words and deeds.
But for Yu Minhong, the past night may not have been peaceful.
01
Judging from the results, this "breakup" between the two parties can be said to be quite decent. According to the
announcement, Dong Yuhui agreed to acquire 100% of the equity of "Yuhui Peer" company for 76.5855 million yuan. This figure is the net assets of Hehui Peer as of the end of June.
However, from its establishment at the end of last year to June 30, the net profit of Hehui Peer was as high as 140 million yuan, and the selling price corresponded to a price-earnings ratio of only 0.5 times. This price can be said to be quite affordable.
Not only that, Oriental Selection exempted Dong Yuhui from liquidated damages and non-compete agreements, and will also provide Dong Yuhui with space, personnel, and "a system based on pallet and supply chain management."
In other words, even if Hui Peer and Dongfang Selection carry the same products in the future, it will not constitute a violation.
But as soon as the open letter was released, the scolding war started again. It was said that Dong Yuhui's own company had to spend 70 million to buy it back out of his own pocket, which was another round of verbal and written criticism.
Yu Minhong had to come out and explain, "I arranged the money for Yuhui to purchase the company, and the company was given to Yuhui."
At the Oriental Selection shareholder exchange meeting this afternoon, Yu Minhong said that it was very regrettable to divest Yuhui Peer, But it is unavoidable.
"It is very regrettable" and "inevitable", expressing Yu Minhong's helplessness.
takes live streaming as its main business, which means fans and traffic are destined to determine everything about the company.
Compared with the lofty shareholders, the ubiquitous fans are more similar to the actual decision-makers of Oriental Selection.
As Yu Minhong said, this time's decency is actually to spread some goodwill so that both sides can develop better.
Or to be more straightforward, it can be said that Yu Minhong surrendered to Dong Yuhui's fans "mother-in-law" -
I let Dong Yuhui go, you let me go. One is separated from the other, each is happy.
This "breakup" came too quickly, but it was not unexpected.
In June 2022, Dong Yuhui almost single-handedly pulled New Oriental out of the quagmire. Within a month, the number of fans of Oriental Selection exceeded 20 million, and sales exceeded 600 million.
But the good times did not last long. Just one year later, this model had a big problem.
At the end of last year, Dong Yuhui's "little composition" was questioned by the editor of Oriental Screening. Subsequently, the "little composition" controversy between the "mother-in-law" and Oriental Screening began for nearly half a month.
Dongfang Selection CEO Sun Dongxu at the time also responded live, but his attitude was not very good. Instead, he was considered to be carrying a gun and a stick, which intensified the conflict.
The "mother-in-laws" ran away in anger. Within a few days, the number of fans of Oriental Selection dropped by nearly 400,000.
There was a fire in the backyard and competing products were picked up. "Mothers-in-law" flocked to Gaotu Jiapin's live broadcast room and let Gaotu poach Dong Yuhui. Gaotu Jiapin gained 400,000 fans in a few days.
In the end, Yu Minhong had to apologize twice in two days, "killed Ma Su with tears", dismissed Sun Dongxu, and served as the CEO of Oriental Selection.
Later, Dong Yuhui opened his own account "Walking with Fai", which is run independently of Oriental Selection. To this day, Walking with Hui and Oriental Selection are completely separated.
02
A lot of people talk about making gold, but accumulation of means nothing. This sentence can be said to be the best explanation of the predicament Yu Minhong faces.
With tens of millions of fans, the intentional and unintentional verbal attacks from a very small number of fans at that time put Oriental Selection and Yu Minhong under tremendous pressure.
But for the collapse of Dong Yuhui and Oriental Selection, Yu Minhong does have an inescapable responsibility.
As Yu Minhong said at the exchange meeting, although he is the chairman of New Oriental, he basically does not participate in any daily management and operations. He only has time to meet and see what problems there are.
Dongfang Selection's rapid growth and new business model caused huge problems in management methods and balance of interests, which ultimately led to the "disengagement" of Dong Yuhui and others.
In fact, this matter should have been resolved last year. The coexistence of Hui Peer and Oriental Selection has already brought an end to the "little composition" incident.
But I didn't expect that everything would get out of control so quickly.
In yesterday’s open letter, Yu Minhong said that the communication between him and Dong Yuhui has so far been without any obstacles, but the complex disputes in public opinion, coupled with the guidance and rumors of a few forces with ulterior motives, directly led to the Eastern Selection and "Walking with Hui" "The gap.
In today’s shareholder exchange meeting, Yu Minhong made it even clearer.
"In the past six months, fans of Oriental Selection and fans of Dong Yuhui have gradually become incompatible with each other."
At the same time, Yu Minhong also suffered severe online violence, with comments such as being a rooster and abusing employees, shaping Yu Minhong into the most vicious person in history. capitalists and bosses.
Even if Yu Minhong makes an announcement, appears in front of the camera, or even just posts a video while traveling alone, people will come and scold him.
Even the seemingly peaceful comment area is full of Dong Yuhui’s fans.
Whether it is traveling or making personal announcements, Dong Yuhui's "mother-in-laws" are always with him.
Even Yu Minhong’s comment section is like this, and the situation of Oriental Selection is easier to imagine.
Any action taken by Oriental Selection is in a dilemma. On the surface, GMV is rising, but the environment it faces is more complicated.
If this continues, it will be a huge harm to both Dongfang Selection and Hui.
and The source of the damage is no longer as simple as the internal issue of Dong Yuhui's interest in Dongfang Selection, but an attack from the outside, that is, an attack from a large number of fans.
At this point, apart from letting Dong Yuhui leave with dignity, avoid continuing to fall into endless disputes, and achieve a timely stop of losses, there is no other solution.
Not only did he want him to leave with dignity, Yu Minhong also humbly sent out a super gift package, so that Dong Yuhui's fans could feel his full sincerity and Dong Yuhui's successful departure without any grievances.
Because he wants to show it to Dong Yuhui’s fans.
This is also a predetermined result.
Just like this, the shareholders of Oriental Screening will not be happy.
03
Of course, in addition to the fact that Yu Minhong and Dong Yuhui's decent "breakup" has become the final fact, there are also many voices of doubt.
’s biggest question is that Yu Minhong gave Yu Hui to Dong Yuhui at almost the price of free gift + discount. Does this involve a “discount sale” of the listed company’s assets?
Although it is not an exaggeration to say that Dong Yuhui has a reinvention for Dongfang Zhen, Dongfang Zhen is also the platform that made Dong Yuhui successful.
Without Dong Yuhui’s popularity, perhaps Oriental Selection would not have achieved what it is today;
But if New Oriental Online had not transformed into live broadcasting, Dong Yuhui would not have emerged from the industry at all.
Because Dong Yuhui himself has always emphasized that he does not want to be an Internet celebrity, he became the top Internet celebrity today only by accident.
In fact, they are just the lucky ones who happened to win the super lottery of live broadcast traffic bonus. It is really hard to say who owes how much to whom.
This is an objective premise that many people ignore.
Peer with Hui was established after the Xiao Zuowen incident in December 2023. The legal representative is Dong Yuhui, and Beijing New Oriental Xuncheng Network Technology Co., Ltd. holds 100% of the shares. Dong Yuhui himself has no equity and is only responsible for management, and then the gmv of the new account Included in Oriental Selection’s financial report.
We don’t know why the equity system is designed in this way. Maybe this is indeed an important reason why Dong’s fans feel aggrieved because of the unfairness caused to him.
and Hui made a net profit of 141 million in half a year, and this was after excluding half of the dividends given to Dong Yuhui. In fact, if you add Dong Yuhui's half, it is basically equivalent to Hui Peer making 280 million in half a year.
According to normal conditions, its annual profit of 500 million should be a problem.
According to the market valuation comparison of leading anchors of other live broadcast e-commerce companies, if it is estimated based on the income method and 20 times pe, then the valuation of Hui Peer is 10 billion. Even if only 10 times pe is used, the valuation is still 50 100 million. Even if makes a profit of 141 million in half a year, Hui Peer's 10 times valuation is nearly 3 billion.
This is not impossible. Oriental Selection's market value of tens of billions, calculated based on the performance contribution ratio, is worth several billion to Hui Peer, not to mention that Oriental Selection's market value was close to 100 billion Hong Kong dollars during its highlight moments.
and mainly rely on Luo Yonghao, a super IP, to make a friend and hold . Its traffic and performance scale are a lot smaller than Oriental Selection, and its market value is nearly 2 billion Hong Kong dollars.
During the Li Ziqi incident, capital valued Li Ziqi at 5 billion.
Now Dong Yuhui and his Yu Hui Peer have core assets valued at RMB 3-6 billion, but Oriental Selection only gave them away in the tens of millions. Moreover, these tens of millions were paid for by Dongfang Selection Company itself, which is equivalent to giving them completely for free.
Therefore, shareholders of Oriental Selection and many outsiders suspect that this is a serious "fire sale", and there is some truth to it.
However, an objective situation is that although Dong Yuhui was just an ordinary employee of the company before becoming famous and was only bound by a simple labor contract, even after he became famous, the company gave him the director status of the subsidiary "Walking with Hui". From a legal point of view, he You also have the right to voluntarily resign at any time.
If he leaves, the company established for him will have little value. This is the reason why the valuation of Youhui Peer in the announcement is only 76.5855 million yuan, because this valuation does not include the valuation of the IP "Dong Yuhui" at all. The only problem with
is that Dong Yuhui’s official resignation date is July 25th, and the issuance date of this valuation report is July 24th. In other words, Dong Yuhui was still on the job when the deadline for issuing the valuation report expired.
Such a valuation does not include the value of such a significant IP, which does seem imprecise.
Another question is, since they are separated from Hui, why are they disconnected again? Is there something fishy behind this?
Some shareholders wonder whether New Oriental will invest in HuiPong shortly after it becomes independent.
Yu Minhong also made a clear response at the shareholder exchange meeting: "New Oriental will not hold any shares of Hui Peer now or at any time in the future. This situation does not exist."
But the actual situation is that this time After divesting Peer with Hui, Oriental Selection not only helps Dong Yuhui pay through the cooperative relationship between New Oriental and Yuhui, but also exempts Dong Yuhui from liquidated damages and non-compete agreements, and will also provide Dong Yuhui with venues, personnel, and "a set of pallet-based and supply chain management systems”. It's like not only giving it away for free, but also paying it back.
Although according to Yu Minhong, this is a goodwill gesture from Oriental Selection to Dong Yuhui.
But it’s really hard to believe that an asset that earned 141 million in one and a half years and was valued at several billions was so generously given away and paid back, even though this asset (along with Hui) might be worthless without Dong Yuhui.
After all, when Alipay planned to spin off from Alibaba , Ant originally planned to give Ali an extremely huge breakup fee as the price. For the sake of profit, Ali's shareholders were not polite at all and tried every means to fight for it. .
is now separated from Oriental Selection without paying a cent, which inevitably makes people question it.
Yu Minhong said in "An Open Letter to Friends of Oriental Screening Shareholders" that this decision was fully negotiated by both parties and approved by the board of directors, but will other shareholders agree easily? He also said that " has caused some shareholders to be disappointed and angry with me", indicating that the actual situation of this incident is not that simple.
These many questions await Yu Minhong to give more detailed answers.
04
Epilogue
When Dong Yuhui is determined to leave, Yu Minhong cannot stay, so instead of holding on tightly, it is better to let go, at least to get together and part ways decently.
This is also the best ending for both parties.
is just Dong Yuhui's solo career with more than 200 million yuan in breakup fees. Perhaps he can continue to create a new Oriental Selection with his powerful IP. But for Eastern Selection, the problems are far from over.
With the departure of Dong Yuhui, Oriental Selection's performance data will suddenly be reduced by a large margin, causing damage to the company's valuation. Next, what Yu Minhong will rely on to minimize the impact and how to regain the trust of small and medium shareholders will be for him. Continue to worry about the big problem. And he has become further away from the desire to retire easily and dignifiedly that he has been dreaming about for these years. (Full text ends)
