The development of Storm TV needs to grasp three opportunities: First, grasp the transformation of business model; second, change from product logic to user logic, truly solve user needs through big data customization; third is to build its own supply chain advantage, Increase the scale of the supply chain
Part of the shareholding of Feng Xin, the real controller, was frozen by the judiciary, which caused the Storm Group to suddenly be in a 'storm'.
On July 6, the Storm Group announced that CITIC Capital (Shenzhen) Asset Management Co., Ltd. (hereinafter referred to as CITIC Capital) applied for property preservation to the Beijing Chaoyang District People's Court on the grounds of equity transfer contract disputes. Some stocks of Stormwind Group were frozen by the judiciary. The frozen shares accounted for 4.65% of the shares held by Feng Xin, accounting for 0.99% of the total share capital of Storm Group. Feng Xin is the CEO and actual controller of Storm Group, holding 21.34% of the shares of Storm Group.
According to the announcement of Storm Group on May 31, Feng Xin accumulated pledge of the shares of Storm Group accounted for 95.35% of the total number of shares held by the company. Together with the frozen shares, this means that Feng Xin holds the storm. All shares of the group are in a state of being pledged or frozen.
Feng Xin's equity was frozen and caused strong concern in the capital market. On July 9, the company's share price fell.
Feng Xin said that the equity freeze was due to the withdrawal of CITIC Capital in 2017.
On July 10, Storm Group's WeChat subscription number released a 9000-word long article "Three-year test, the storm in the storm - Feng Xin's internal two-hour long talk" (hereinafter referred to as 'long talk'). In the text, Feng Xin The stock freeze was explained and responded to many issues of concern to the media.
According to Feng Xin's explanation, the equity freeze stems from the divestment of CITIC Capital in 2017. It is understood that CITIC Capital is the shareholder of the Storm Mirror of the VR sector of the Storm Group. When CITIC Capital invested in Storm Mirror, it signed a request for it in 2020. The terms to be merged or listed before the end of the year, if Storm Mirror is not reached within the stipulated time, Feng Xin will bear the responsibility for capital preservation and repurchase. However, since Feng Xin could not get the required cash, it caused the equity to be frozen. The situation.
Regarding why CITIC Capital divested, the relevant person in charge of Storm Group did not give too much explanation. It was only mentioned in the 'long talk'. The rule of law weekend reporter sent an email to the relevant person in charge of CITIC Capital to seek the reason for divestment, but as of press time Did not get a reply.
Blind expansion tightens the capital chain
Feng Xin said in the 'long talk': 'CITIC Capital is a shareholder of Storm Mirror. In 2017, it was proposed to withdraw funds in advance. The possible reason is the judgment of the VR industry and the overall economic situation.
What is the implication? Does it mean that CITIC Capital is no longer optimistic about the development prospects of Storm Mirror in VR business?
In fact, VR business was once the core business of Storm Group. Public information shows that Storm Group entered the VR industry in 2014. In that year, Storm Group launched the storm with the storm mirror and storm future as the main carrier of VR business. Mirror generation, Storm Mirror second generation two VR mobile phone shell. Since then, the storm continues to invest in VR business, and successively launched three generations, four generations of VR mobile phone shell.
Along with the industry's hot speculation on VR concept, on the one hand, Storm Mirror has been recognized by the capital. CITIC Capital led the B-round financing of Storm Mirror, with a financing amount of 230 million yuan and a valuation of 1.43 billion yuan.
On the other hand, the share price of Storm Group has also risen. In 2015, after the listing of the GEM on the Shenzhen Stock Exchange, the Storm Group pulled out 29 daily limit, and the stock price soared to 327.01 yuan.
However, with the retreat of the VR boom, the share price of Storm Group has gradually declined. As of July 16, 2018, Stormwind Group closed at 12.85 yuan.
'A lot of capitals have entered the VR market in the past few years, but the virtual fire is too high.' IT industry analyst Liang Zhenpeng pointed out to the rule of law weekend reporter that the subsequent withdrawal of capital, because the VR industry has not formed a sustainable profit model so far. For the majority of consumers, VR is just a dispensable 'toy', not a necessity.
In fact, Feng Xin also realized the changes in the VR industry: 'VR in 2016, the industry clearly showed signs of bad, but at that time did not quickly adjust the mirror, so that it can run in small steps Better adapt to environmental changes. Then why didn't you make up your mind to change in 2016, how much and when you were talking about multiple module layouts, I felt that there were many financial institutions and resources around me, and I felt that I could do it myself.
The biggest problem with the storm is that the steps are too big. For the enterprise, when a plate is not ready, it will enter another completely unfamiliar plate. These plates need a constant blood transfusion. The pressure of funds is self-evident. . The economic observation observer Hong Shibin said.
In 2007, Feng Xin founded the Storm Group, which was originally engaged in Internet video services. With the listing of Storm Group, the business of Storm Group has also expanded from Storm Video to VR Business, Storm TV, Storm Sports and other fields. The strategic path of Storm in recent years has expanded from a single video business to cover the 'federal ecology' of Internet video, VR, smart home entertainment, live broadcast, film and television culture, Internet games, O2O and other formats.
'At that time, there was still an inflated mentality. ' Feng Xin admitted. In the face of today's pressure, Feng Xin said that two things must be done, the first is to firmly grasp the development of TV, and the second is to other businesses other than TV. Determined to 'big surgery'.
TV business faces internal and external challenges
In the 'long talk', Feng Xin set a target of 2 million units for the TV business this year and 6 million units for the future. For profitability, Feng Xin is also extremely confident: 'Storm TV can enter the profit period in 2019, 2020 And 2021 should have at least a billion dollars in the expected value of profits. '
However, it may not be easy to take a place in the television industry that is already a Red Sea.
Liu Buchen, an observer of the home appliance industry, told the lawful weekend reporter that Storm Group is betting on the future development of Internet TV. This is a very dangerous strategic transformation. The overall Internet TV industry is currently in a bad price, and even the profits of traditional TV companies are very poor.
According to Zhongyikang data, the retail volume of the domestic color TV market in 2017 was 47.81 million units, down 8.1% year-on-year.
'The number of TV replacement products has increased, the overall boot time has shrunk, and the color TV market is facing a long-term crisis.' At the 14th China Digital TV Industry Development Conference held on July 3, Lu Yibo, deputy secretary general of the China Electronics Chamber of Commerce, said that the color TV market The overall demand was sluggish, the color TV display technology was insufficient, and domestic demand growth was weak. Raw materials and operating costs increased, resulting in a net profit of only 1.3% for major brands in 2017.
However, in the eyes of the industry, Storm TV is not completely without opportunities for development.
'Because of the break of the capital chain, LeTV has basically withdrawn from the Internet TV market. LeTV Super TV has sold nearly 6 million units per year during its peak period. After LeTV's exit, its market share must be filled by other brands. If the storm concentrates resources on TV business, In the future, there will still be profitability and the possibility of rapid development. ' Liang Zhenpeng pointed out.
Hong Shibin thinks: 'The development of Storm TV needs to grasp the opportunities of three aspects. First, grasp the change of business model. The business logic of LeTV's 'content subsidy hardware' is actually feasible. It is just that LeTV has gone too fast and encountered The problem of funds; the second is the transition from product logic to user logic, through the personalization of big data to truly solve user needs; the third is to build their own supply chain advantages and enhance the supply chain scale.
However, Hong Shibin also bluntly said that the biggest challenge for Storm TV is the funding problem. If the funding problem is not solved well, it will be difficult to support its further development.
In fact, Feng Xin did not specify how to solve the personal debt problem in the 'long talk': 'I hardly spend any energy to think about how to bear when the individual bears so much debt. It is not how much I am more than Private, but I don't have any better plans.'
'Feng Xin did not answer how to solve my debt problem. A potential risk is that before the storm TV grows up, Feng Xin’s debt problem may be fully erupted, and will not wait for the TV industry to become bigger and succeed. The market is not so kind. ' Liu Buchen said.