In the past month, the Storm Group has been caught in the whirlpool of public opinion and has been constantly questioned by the outside world.
First, the financing shrinkage questioned the tightness of the storm funds, huge debts, and then the storm wind group revenue structure questioned into the next LeTV. In the capital market, the storm stock price also fell sharply, from 21.10 yuan in a month to 14.00 on July 5 Yuan, the market value has shrunk by nearly 2.3 billion yuan.
In this regard, Feng Xin, Chairman of Storm Group, accepted an exclusive interview with the Securities Times reporter, detailing the current strategy of Storm Group and the problems faced by Storm Group.
The logic behind TV's core business
On March 5, 2018, Feng Xin announced the strategy of 'AllForTV' to the whole company through internal mail, away from the main battlefield of Long Video APP, focusing attention and resources, focusing on Internet TV and home Internet.
'All the business around TV is doing additions.' Feng Xin told Securities Times that the phrase behind the 'AllForTV' strategy is to use the smart hardware, rather than free software or websites to access the Internet. Value company.
After the storm went public, it has expanded from storm video to storm TV, virtual reality, storm sports and other fields. At present, all bet on TV. This is also the main business that the outside world is criticized is not strong, but also the outside world is questioning the business like LeTV. mode.
Regarding the market's doubts, Feng Xin answered in his unique way, that is the logic behind TV's core business. Feng Xin believes that the value of the Internet economy is the first value of users, and the second is business value.
'We need a screen to maximize the size of the user.' Feng Xin said that around the screen, the storm made VR and TV layout, although VR is a trend, but the timing is wrong.
Feng Xin uses a set of data to support the strategic adjustment. He compares Storm Video with Storm TV: The user value of TV is much larger than that of APP users. The user value of Storm TV is at least 100 times that of Storm Video users. The duration is much higher than APP; the life cycle of storm TV is 5 years, and the storm video is 0.5 years.
Feng Xin said that the home Internet and smart homes will have a market scale of trillions in the next few years. There are 430 million households in China, and a total of 340 million consumer groups after 90 and 00. The home Internet and big screen are storms. The main battlefield of the future. 'The main battlefield of the two core enterprises of the future Internet, one is the living room Internet, and the other is the car Internet.'
The burning period is nearing the end
The storm is deeply rooted in the whirlpool of public opinion, the public is worried about its financial pressure. And the use of hardware to acquire Internet users is also the burning of money.
Storm Group released its 2017 financial report disclosure. Last year, Storm TV sales reached 840,000 units, hardware revenue was 1.283 billion yuan, cost was 1.375 billion yuan, gross profit margin of sales products was -7.15%, and the main subsidiary of Smart TV was stormy. The loss was 320 million, causing the storm group to suffer losses overall.
Feng Xin also admitted in an interview with the Securities Times reporter that 'TV needs a lot of financial support, and funds support the development of TV will be faster', but denied 'lack of money'.
Feng Xin said that the period of burning money is close to the end. At present, the gross profit rate of the TV with the price of thousands of yuan is still positive. 'In the recent two months, the sales volume of 180,000 units, the proportion of new products is getting higher and higher, now It has already been 60%; to this day, the new product has achieved 3%-15% hardware positive margin; this is to say goodbye to the stage of burning money to acquire users.
Feng Xin expects that TV sales this year will be no less than 2 million units. By 2019, Storm Group will enter a large-scale profit period.
The quarterly report of 2018 showed that the storm suffered a loss of 29.5417 million yuan and a loss of 16.47 million yuan in the same period of 2017. The cash flow from operating activities was -293.68 million yuan and the debt ratio was 65%. This is also a questionable point.
For the pressure of cash flow, Feng Xin pointed out that 'the pressure on cash flow has been greatly improved.'
He gave a set of data: April to May 2018, Storm TV cash back 250 million, an increase of 160%. Compared to the 2017 old product 120 days of the turnover period, April 4, 2018, the storm The TV has achieved 15 days, 35 days, 44 days of new high efficiency turnover.
TV business or overall injection into listed companies in 2019
In the communication with Feng Xin, it always focuses on TV products. For the financing ability and capital market operation, the founder of this storm is not as confident as the product.
Feng Xin said, 'After listing more than two years before this year, less than three years, I am doing a lot of strategic layout and capital movements, but it is not what I am good at. ', 'In capital and management I am definitely not a master, I don’t know how to play a few points. I don’t know. Anyway, it’s definitely not a master.
After experiencing the ups and downs of the capital market, Feng Xin said that he is mature, and must do the right thing when the market is good. If TV continues to be profitable, the storm TV business will be injected into the listed company in 2019.
Although Feng Xin used his data and system to show his new strategy to reporters, it is an indisputable fact that the decline in the number of storm video and audio users and the low-cost competition of Internet TV. Can his strategy be as he said: Obtaining users' Internet TV business models through intelligent hardware will definitely be recognized by the market. Whether it is possible for the Storm Group to gradually recover, it will take time to verify.