How long can the live broadcast studio of New Oriental be popular after being reduced by Tencent after being exposed to quality control problems? _China Economic Net – National Economic Portal

CDC Finance, June 21, recently, with the new model of “bilingual live broadcast”, Dongfang Selection, a subsidiary of New Oriental Online (HK1797), became popular on Douyin. Since June 6, the stock price of New Oriental Online has soared rapidly, reaching the intraday high of HK$33.15 on June 16. The company’s stock price has risen by 795.95%.

“There are a lot of popular people right and wrong.” On the evening of June 20, Tencent Holdings sold more than 7,000 shares of New Oriental Online and cashed out more than 700 million Hong Kong dollars. On the same day, users complained about product quality issues in the live broadcast room, which also made consumers question the quality of their supply chain.

Affected by the superposition of news, as of the close of June 20, New Oriental Online has fallen by 32.08% in a single day.

Peaches are rotten and are complained by users

On June 20, the news of “Oriental Selection was complained that the peaches were moldy and hairy” appeared on Baidu’s hot search.

According to media reports, on June 9, a consumer placed an order for 4.5-5 kilograms of Shaanxi peaches in the Dongfang selection live broadcast room. After signing for the express delivery, they found that about a quarter of the peaches were moldy and hairy. For this reason Complain to customer service.

On the afternoon of June 20, the relevant person of New Oriental Online responded to the preliminary judgment that the peaches were caused by deterioration during transportation, and the company will try to prevent similar situations in the follow-up.

Previously, some consumers reported on social platforms that the weight of the oil apricots they bought in Dongfang Zhenxuan did not reach the promised size. After negotiating with the merchant involved, a full refund will be issued. Another consumer said that the prawn products they bought had melted when they received them.

Although New Oriental Online blamed transportation, it also exposed the company’s problems in supply chain, quality control, transportation and other aspects to a certain extent.

According to media reports, Zhang Yi, chief analyst of iiMedia Research Consulting, believes that the products brought by live e-commerce platforms are mainly industrial products, food, knowledge products, etc. The degree of standardization of industrial products will be relatively high, the purchase price will be more transparent, and it will be difficult for enterprises to have higher profit margins. Although agricultural products are not standardized, their prices have a large room for fluctuation, and there is the possibility of obtaining higher profits.

But bringing in agricultural products is not an easy task. Agricultural products are prone to problems such as deterioration, pesticide residues, and food safety. They are also non-standard products, and it is extremely difficult to control the quality.

Regarding the difficulty of bringing agricultural products, Sun Dongxu, CEO of New Oriental Online, once said that due to the challenges of non-standardization of agricultural products, difficult logistics, and difficult quality control, New Oriental Online has strict requirements on suppliers, and will give priority to selection and praise, and top quality. business cooperation. In terms of product selection, Oriental Selection requires that all products must have corresponding quality inspection reports, and through anonymous purchases, check whether the supplier’s samples are the same as the actual products.

Growth bottlenecks appear?

According to the data of the third-party platform Huidu, within half a month of the live broadcast of New Oriental Online (starting on June 8), the number of fans of the official live broadcast room “Dongfang Selection” Douyin has risen from about 1.12 million on June 9. To more than 17 million, fans increased by more than 16 million.

Its delivery data is also quite impressive. On June 20, the GMV (gross merchandise transaction) of Dongfang Selection reached 34.616 million yuan, ranking first on the Douyin live streaming list that day.

However, it is worth noting that the single-day GMV of Dongfang’s selection has reached its peak, and the single-day GMV has declined significantly since June 18. And the growth rate of new fans has dropped significantly.

In addition, the popularity of the live broadcast room also benefited from the 618 e-commerce promotion stage and the empty broadcast period of top anchors such as Li Jiaqi. At present, the number of fans and sales of anchors on other platforms such as Douyin and Kuaishou have increased to a certain extent. And during this year’s 618, many leading anchors such as Li Jiaqi and Luo Yonghao were absent, and the Dongfang selection live broadcast room may have seized this opportunity.

The research report of CITIC Construction Investment believes that the current average GMV per game in the live broadcast room is 35 million+, and the average sales volume per game reaches 30w+, which is still a certain gap compared with Taobao’s super head live broadcast room. Among them, the GMV of Li Jiaqi’s Taobao live broadcast room in 19 and 20 years was 5 billion and 20 billion yuan respectively, and the GMV of Li Jiaqi’s live broadcast room reached 10.653 billion yuan on the first day of the double eleven pre-sale on October 20, 2021.

In addition, the CITIC Securities Research Report listed the current “risk factors” of New Oriental Online: the company’s stock price has risen more from the bottom due to the inflection point of its business in the short term, and there is a risk of falling back; the company’s business inflection point is beginning to appear, and it will take time to prove stability; The attention is very high, and it is necessary to pay attention to the impact of daily GMV fluctuations on the short-term stock price; the company still needs to accumulate and verify the supply chain management capabilities; the risk of the decline of live broadcast e-commerce business traffic or the increase of traffic costs; the risk of traffic loss caused by the loss of the anchor team Wait.

On June 17, China Merchants Securities downgraded New Oriental Online to neutral. China Merchants Securities Research Report believes that the current valuation of New Oriental Online needs to correspond to a daily average GMV of nearly 30 million yuan and a price-earnings ratio of 35 times for the live streaming business. This extrapolation assumption is too radical, so the rating is downgraded to neutral.

Tencent reduces its holdings and cashes out by more than 700 million

According to the disclosure document of the Hong Kong Stock Exchange on June 20, Tencent Holdings sold 74.6 million shares of New Oriental Online on June 15 and June 16, and the shareholding ratio dropped from 9.04% to 1.58% after the reduction.

Specifically, 35.6125 million shares were sold on June 15, and 38.9914 million shares were sold on June 16. The data shows that the average price of Tencent’s two reductions was HK$9.6168 and HK$9.6755 respectively, that is, Tencent’s two reductions were HK$342 million and HK$377 million, totaling HK$719 million.

According to public information, Tencent has been holding shares in New Oriental Online since its Series A financing in 2016. Tencent’s total investment in New Oriental Online reached US$50.8772 million (approximately HK$399 million), and the investment cost was US$0.5627 per share ( about HK$4.42).

Wind information data shows that since June 14, HSBC, Interactive Brokers, Morgan Stanley, JPMorgan Chase and other institutions have successively reduced their holdings of New Oriental Online stocks. But at the same time, there are also Chinese-funded institutions such as Futu Securities and Guotai Junan to increase their holdings.

However, from the perspective of financial data, with the implementation of the double reduction, the company will terminate the K-9 and preschool education business in November 2021. In the past, the company’s large losses were mainly due to the losses of new outlets brought about by the substantial expansion of Oriental Youbo business and Due to the high investment costs, with the suspension of K9 and pre-school businesses, profitability is expected to gradually recover.

As of the first half of 2022, the company has a total of 627 million yuan in book funds and 300 million yuan in trading financial assets, with sufficient book funds. At the same time, the company’s asset-liability ratio is only 20%, with no interest-bearing liabilities, and the overall asset structure is healthy.

At the opening of the market today, New Oriental Online reported 16.36 Hong Kong dollars, an increase of 12.72% as of the release of the manuscript.