In 2017, when music is suffering from financial problems, there is no better day than a Storm Group with the reputation of 'Little LeTV', but Feng Xin's luck is obviously better than that of Jia Yueting.
The storm group, which owns the TV business operations of Storm Group, received a $ 800 million financing by the end of 2017, helping Stormwind to get out of the woods.
Recently, when Feng Xin, chairman and chief executive officer of Storm Group (300,431), talked to surging journalists, he detailed the difficulties encountered in the financing of the past year and the impact of how to get out of the music crisis. After Feng Xin believes that in 2018, Storm TV and millet TV will inevitably face confrontation.
'Looking back at the music, if music in 2015 did not spend money on anything else, concentrate on television, do not do the car, do not do the phone, everyone think this is a great company.' Feng Xin said .
Storm has recently proposed a comprehensive focus on television business in 2018 and seeks to storm the entire television business into the listed company.The proposed strategy marks the stormwind Group's core market and user base will focus on the home Internet market, home Internet will become the main battlefield of the storm .
How to find the Apple foundry investment?
On December 7, 2017, Storm Group received the largest financing since it went public. The Storm Group received a $ 800 million financing from the storming leader of the company that operates the TV business.
The investors involved in this financing are not general financial investors but companies upstream of the two industrial chains, namely Suzhou Dongshan Precision Manufacturing Co., Ltd. (002384) and Rudong Xinhao Industrial Investment Fund Management Center (hereinafter referred to as Rudong Xinhao), Dongshan Precision and Rudong Xinhao hold 10.53% stake in Storm TV respectively.
Dongshan Precision is a supplier of Apple and Tesla, and is one of the largest PCB (printed circuit board) and FPC (flexible circuit board) manufacturers in China. This is the first time that a downstream company in the investment chain has been invested.
Feng Xin to the surging news reporter recalls about about the Spring Festival in 2017, Storm TV and Storm Mirror two businesses start financing, about five or six months, were looking for two FA (financing advisory agency), but surprising The two FA's feedbacks are "very poor," and even they are not confident enough.
'It's not a valuation problem, it's a matter of trust, and as a matter of music TV, everyone feels insecure about Internet TV (the company's funding chain),' said Feng Xin.
At that time, financial intermediaries took the second place, proposed to do bond financing, but the storm never tried, for any reason to give up.
'At that time, I talked to two business executives (Liu Yaobing, CEO of Storm TV, and Huang Xiaojie, CEO of Storm TV) to find financing for themselves. "Financial investors are highly aware of risk prevention and find them basically hopeless, so we Examined a bit of their own special place, and met friends, decided to find industry financing or 'Feng Xin said.
At the industrial level, Feng Xin's initial idea is that the upper reaches of the industry chain are too risk-aware. The upper reaches are all operating at a small profit margin with a profit margin of less than 5%. When the industry as a whole has a poor sense of trust, Into the account, I am afraid that all the previous base of cooperation abandoned.
So Feng Xin's idea was to find the downstream industry chain, to find retail partners across the country, so that everyone in a way similar to crowdfunding. 'Because they know the Storm products is not easy to sell ... ... I really want After this piece. 'Feng Xin said with a smile.
This scheme was eventually abandoned because of inadequate fund-raising and inconvenient operation involving too many shareholders. "The main reason is that the retailers are not well-funded on their own. A company that sells electrical appliances can make a million yuan a year through hard labor. No balance, but also working cash flow, if he gave you a million, even gambling life. 'Feng Xin said.
Finally forced the upper reaches of the industrial chain to find investors on this road.
Higashiyama Precision, one of the final investors, is one of Storm TV's suppliers.
Feng Xin revealed that Liu Yaoping is a veteran of the television industry during the Skyworth and Dongshan precision co-operation for a decade.Liu Xiaoping Huangworth your colleagues in Skyworth, and later also served as vice president of Dongshan Precision factory management in the storm this round of financing After the end, Huang Li also joined the storm TV.
In the Dongshan precision LED screen orders, Apple accounted for a large proportion of data show that in 2016, Dongshan Precision acquired about 4 billion yuan for a US Nasdaq-listed Multi-Fineline Electronix, the latter the main customers are Apple and Millet.
Vendors invest in downstream companies are rare, and they generally know the actual sales of downstream companies.'We may not have enough resources, but the operating efficiency is very good, especially in supply chain management. 'Feng Xin said. And this success Attracting investment shows the deep involvement of the storm in the supply chain.
Yuan Yonggang, chairman of Dongshan Precision, said that Dongshan Precision has maintained a close working relationship since the beginning of Storm TV. In the future, Dongshan Precision will provide Storm TV with manufacturing, supply chain, key module and device capabilities.
In fact, supply chain management is a testament to team capabilities. In 2017, Wu Mingjin, head of Xiaomi's TV supply chain, was notified by the company that six people, including subordinates, were engaged in cheating and forming interests groups to take advantage of his position to obtain supplier property. Suspected of violating the 'non-state staff bribery' has been arrested for arrest by the public security authorities Wu Mingjin was a LCD backlight module R & D and manufacturing enterprises Rui Yi Optoelectronics Marshal and Foxconn backlight business leader.
'Music as their own dry dead'
After the financing is successfully completed, the business of the storm is gradually getting back on track, and the fadeout of music seems to give new opportunities to the storm.
Feng Xin revealed that some of the original cooperation with the music as agents, has now been transferred to work with the storm, which includes music as the largest agent Hongtusanbao.
Not only channel operators, as well as the upstream supply chain, smart home surrounding industrial chain, and even decoration companies have come to find the storm to discuss cooperation.
In fact, there are currently only two options for online agents outside of LeTV: Stormwind or Xiaomi, and Xiaomi is currently aggressively expanding its own Xiaomeijia offline store and competing with its agents relationship.
'Looking back at the music, if music in 2015 did not spend money on anything else, concentrate on television, do not do the car, do not do the phone, everyone think this is a great company. Storm and their The difference is that the storm is not chaos money, no holes, are a small investment. 'Feng Xin said.
'I have never seen an industry leader, I myself killed out, but not so thoroughly.' Feng Xin lamented that 'the storm has always been a company with less resources and funds, when the music as a copyright, fast broadcasting We dared not go away. We really were able to keep such a user scale at that time, feed ourselves by making profits, and children of the poor were born early. At last we were fortunate.
On January 31, Feng Xin said that Storm Group will further focus its strategy in 2018 and various businesses and departments have formulated a plan to fully implement All for TV. 'If the TV business can achieve the profit forecast and meet the relevant requirements by the end of 2018, Listed companies consider seeking further increase in shares in order to storm TV business as a whole into the listed company.Financial TV other minority shareholders stake injection into listed companies, and from the first quarter of 2018, continued to announce the TV business's core business data, including Market share, user and ARUP value (average revenue per user).
However, when the surging news reporter asks whether there is any investment in the current outlets such as artificial intelligence, new retail outlets and smart speakers, Feng Xin said the storm would be cautious and the big principle would not be to do it himself.
In the new retail, Feng Xin believes that more cost under the line shop in the artificial intelligence, the storm did not invest in large-scale self-built basic research team, but to take a strategic cooperation with the iFLYTEK, the two sides hope to add 100 new services Million units of artificial intelligence assistant television products, built-in TV products through the ability to fly, to provide users with voice recognition and semantic recognition.The intelligent speaker competition has now entered the Red Sea, Ali and other giants willing to subsidize, Feng Xin said that temporarily Will enter this area.
Replenishment war with millet
Another investor in the current round of financial crisis, such as Dong Xinhao, is a high-tech industry pilot fund set up by the Rudong government in Nantong, Jiangsu Province. Zhai Jianhua, party secretary of Rudong Development Zone, said that after the strategic investment , Will storm TV as a leader in Rudong building AI television industry base, driving the TV industry chain upstream and downstream economic development.
'In the past, Internet TV did not involve upstream suppliers, completely simple foundry cooperation. We next, we may see in 2018, we started to have their own factory production of television, and these plants are mainly like East cooperation. 'Feng Xin said.
February 3, Storm TV Jiangsu Industrial Park, the foundation laid, with a total investment of 1 billion yuan, an area of 200 acres, the project completed and put into production, the artificial intelligence television production and marketing capacity within three years will reach 3 million units.
In Feng Xin's vision, the wisdom of the family is the third phase of Internet TV competition.
Actually, this is an Apple Dream. The TV is actually a large-screen apple, so I ended up selling it. In the future, it is possible to raise the ARUP value (the average revenue of a single user) and leave the user. "Feng Xin said.
The Chinese TV market is actually not a new market. In the past decade or so, the market for TV sets has basically reached the level of "trade-in" with an annual volume of about 50 million units. However, in the past two years, in the process of upgrading and replacing traditional television Part of the share is preempted by Internet TV.
Feng Xin believes that the second phase, it is to fight Internet products and services, rather than just fight the richness of content on demand. 'Voice dialogue should be a watershed, it can release many new user needs, users are no longer simply remote control You can shop, check the weather, memo, games, etc. '
The third stage is the wisdom of the family.For example, open the curtains, air conditioning, can be done through the wisdom of the family's interactive center and computing center.Feng Xin believes that television or speakers will become the center of the wisdom of the family.He predicts at least 20 % Of households will have a 'smart home' products.
Storm Group January 31 release of the 2017 performance forecast shows that operating income is expected to reach 1.81228 trillion -23,062.9 million yuan, an increase of 10% -40%. The company said the increase was mainly due to storm leader of the Internet TV business revenue growth Obviously, a 40% increase over the same period of last year.
From the release of the industry's first voice-over-IP AI to the first AI screenless TV, the sales growth curve of Storm TV was already evident in the first three quarters of 2017. In the first three quarters, Storm TV sold 550,000 units, up YoY 29%.
It stands to reason that after the price of a storm TV goes up, it should be harder to sell without a loss, but it is still possible now.
Feng Xin believes that competition with millet TV will surely intensify in 2018. 'Millet is very powerful, they have strength, we have people and attention. The foundation of millet empire is mobile phones, but the mobile phone war 2018 will certainly be more intense, it is impossible Lower, so in any case, the mobile phone business will consume 60% of their attention, or even 80%.
According to the plan, Storm TV 2018 will achieve a single user breakeven, in 2019 into the overall profit period.
We put forward a more aggressive goal, one year when the Internet TV industry first, but we are afraid to say that next year's sales target, how much to sell the entire amortization cost to come down, we set the target value of the ARUP. Of course, the internal data, but this thing shouts out to change. 'Feng Xin said.