At 2pm on March 25th, Yema Finance met with Sun Hongbin after resigning as chairman of LeTV in Beijing.
Different from the usual image of suits and shoes, Sun Hongbin wore a black cowboy and a black collar shirt. The rapid relief, the temporary relief of his look indifferent, for the core issues raised by Yema Finance have made a direct response.
Sun Hongbin stressed that he had stepped down as chairman of the company and now he has become an ordinary LeTV investor. Today he is telling everyone about the real situation of LeTV.com as an investor who knows more about LeTV. He warns many small and medium-sized players still in the game. Investors, LeTV.com has a high amount of debt, and it is difficult to operate. Moreover, due to the regulatory requirements of listed companies and the Growth Enterprise Market, it is impossible to introduce new funds. There has been apparent speculation that share prices are running out, and institutional investors are basically running out. Attention should be paid to preventing risks.
Yema Financial Dialogue Sun Hongbin
Mustang Finance: Why did you step down as chairman of LeTV?
Sun Hongbin: I am responsible for retail investors. When LeTV reopened, there were only 180,000 retail investors. There were institutional investors. Now there are 330,000 retail investors. Organizations run out, and the turnover rate is very high. Obviously someone is frying.
The resignation of the chairman is also related to this, and many investors said that because they are optimistic about my buying, the province has hoped to buy, and the share price will fall again in the future. LeTV has a huge loss of 11.6 billion in 2017. This situation is also accompanied by retail investors. 5. In the future, the retailer will lose. I cannot afford this responsibility.
Mustang Finance: What is the specific difficulty of LeTV?
Sun Hongbin: Extremely short of funds, already insolvent, LeTV now has 7.5 billion creditors, many of which are due this year, many of which are owed by LeTV's unlisted system to listed companies. In addition, there are more than 20 annual interest payments on amortization. Billion, how to do it is very difficult. The money earned is not enough to cover interest and debt. There is no cash flow, no profit.
Mustang Finance: LeTV is now so difficult. How many ways can it take?
Sun Hongbin: To solve the current difficulties, we must let the money come in. Our team has exhausted all the methods. There are altogether 5 routes. But the two do not work: for example, private placements and capital increase, the introduction of new shareholders, but affected by LeTV's 2017 loss. According to the "Provisional Measures for the Management of the Issuance of Securities on the Growth Enterprise Market of the Growth Enterprise Market," it is necessary to make profits for two consecutive years before it can be done now.
But there are only three roads left: The first is the bankruptcy restructuring. This does not affect the listing status and is a mature solution. However, this requires the supervisory level, the Beijing government, and the court to support the tripartite party. Second, it is to sell assets to repay debts and maintain the listing status. But now there is no asset to sell. If there is still a loss, the final result may still be delisting. Third, the final delisting, I do not want to see the delisting. I would not say if the delisting is not rejected, but on the basis GEM delisting rules, and now LeTV, it is very likely that the net assets are negative, and there is a great risk of delisting.
Whether it's taking any of these three paths, it is very difficult for the stock price to maintain at a better price.
Mustang Finance: Which of the bankruptcy reorganization and delisting do you prefer?
Sun Hongbin: I do not want to let LeTV delist, I believe that any shareholder does not want it to delist. If the bankruptcy reorganization can be successful, there will be solutions, there may be other strategies, institutional investors come in. Because the "Bankruptcy Law It stipulates that the debt is higher than the equity. But this needs the supervisor, the Beijing government, and the court to support it. If this is not successful, then LeTV is likely to come to a situation that investors are not willing to face - that is, delisting.
Mustang Finance: Did you change the value of LeTV?
Sun Hongbin: To be sure, the Internet has lost its users' value and it has changed.
Mustang Finance: LeTV's pre-losing profit of RMB 11.6 billion in 2017, and accrual and provision for bad debts amounted to about RMB 8 billion. Is the accrual ratio insufficient?
Sun Hongbin: It is probably not enough, there is a loss.
Mustang Finance: How much does it cost to solve the crisis of LeTV?
Sun Hongbin: More than ten billion, and also need to make money come in with reasonable compliance.
Mustang Finance: Does LeTV sell core assets enough to pay back debt, such as LeTV's financial license?
Sun Hongbin: Far from enough!
Mustang Finance: Do you want the regulator to let LeTV special agents?
Sun Hongbin: We want to follow the rules, and we are only holding 8.56% of the minority shareholders. We can't do the master.
Mustang Finance: What do you think about the future of LeTV Entertainment (former LeTV) and Xin Lezhi Zhijia (Leverage to New, Big Screen TV) not in the listed company system?
Sun Hongbin: New LeTV Entertainment and Xinle look wise, we will all think of ways to do it well, because it is not a listed company, relatively speaking, the introduction of funds will be more flexible. LeTV in the field of smart TV is still leading.
Mustang Finance: How do you evaluate old Jia?
Sun Hongbin: His layout is still forward-looking, but the stalls are too big to be laid.
Mustang Finance: I heard that LeTV Sports was originally bidding for RMB 9 billion to buy, but Jia Jia did not sell it. Isn't there a continuous problem?
Sun Hongbin: That is, when it was interrupted, last year he was still saying that LeTV could not be less one of the seven sons.
Mustang Finance: What advice do you have for minority shareholders?
Sun Hongbin: Look at the fundamentals, take a look at the announcement, and don't listen to the news. Now I'm also a 'special retailer'. I also failed to invest and lost more. I used to be the chairman of the board and said that everything is not in compliance with the rules. Now I am retiring. I can share with the small shareholders.
Mustang Finance: Have you invested more than 10 billion in LeTV?
Sun Hongbin: It is still very difficult to face the reality. However, there are such experiences. These failures are also very valuable for the future merger and acquisition of Sunac.
Mustang Finance: When you invested in LeTV, did you want to manage LeTV?
Sun Hongbin: No, I'm investing.
Mustang Finance: Will you continue to invest in LeTV?
Sun Hongbin: No, Sunac China is also a listed company. There are also other shareholders. I also need to explain to other shareholders.
Mustang Finance: Let's regard this investment as a failure for Sunac?
Sun Hongbin: Certainly it was a failure. We voted for LeTV, LeTV, and New Music as the wise family. The other two were all fine, mainly because LeTV investment failed.
A company lacks money. The solution is only to borrow money or increase capital. Before LeTV, it had a valuation of 3 billion yuan and a capital increase of 1 billion yuan. Now it is relatively normal. The next step will be to increase capital, and there are more interested people.
New music as the wise family is a bit more complex, LeTV has a shareholding, but Sunac creates a capital increase in the proportion of shares in LeTV.com, it appears on the table, involving major asset restructuring, and approval for at least six months.
The most complicated issue is LeTV. Because it is a listed company on the GEM and is subject to many regulatory requirements, nothing can be done. No financial institution or individual is willing to lend money to LeTV.
Mustang Finance: Do you regret investing in LeTV?
Sun Hongbin: I never regret that there is nothing in my dictionary.
Mustang Finance: What experience and lessons did you invest in LeTV?
Sun Hongbin: Investment logic is right: consumption upgrade, good life, big entertainment, big travel, medical care or investment.
However, LeTV’s financial and team judgments were mistaken. LeTV’s team could come out on a large scale and dig a lot of cattle, but it didn’t form a synergy. We are a hard core, and many people follow me for many years, but The team's combat effectiveness is not as strong as our team.
Mustang Finance: If you leave from LeTV, where will your energy be?
Sun Hongbin: LeTV Films needs financing, including the help of LeTV. There are 13 cities and towns to be built. If they are completed, we can be considered a leading company in the travel and tourism sector.
In addition, opportunities in the real estate industry are still in mergers and acquisitions, and good opportunities will also be concerned.
Mustang Finance: Does financial leverage reduce your influence?
Sun Hongbin: We haven't bought land in the market since last October. We have been reducing our leverage. However, big companies have more M&A opportunities and smaller companies are more difficult. For us, as long as we don't buy land, we make money this year. We can pay off the loan. Our cash flow is particularly good. Last year we had sales of more than 360 billion yuan.
Mustang Finance: What advice do you have for the supervisor?
Sun Hongbin: The mature capital markets are mainly institutions, and they hope to gradually cultivate a market dominated by institutions. LeTV now trades at a rate of 225%. We haven't sold it with old ones. So the concept of a shareholder selling four times is obviously there. Capital speculation, investors still have to guard against risk.