Lead: In the 2017 year when LeTV was suffering from financial problems, the Storm Group, which is known as “Little Musicâ€, has a hard time. But Feng Xin’s luck is obviously much better than Jia Yueting.
In the 2017 year when LeTV was suffering from financial problems, the Storm Group, which is known as “Little Musicâ€, has a hard time. But Feng Xin’s luck is obviously much better than Jia Yueting.
At the end of 2017, Storm TV Group's main business operator of the TV business, Stormwind, received a financing of 800 million yuan. This helped Stormwind out of the woods.
Recently, Feng Xin, Chairman and CEO of Storm Group, exchanged with the journalists to explain the difficulties encountered in the financing process in the past year and how to get out of the impact of the LeTV crisis. After walking out of the haze, Feng Xin believes that in 2018, Storm TV and Xiaomi TV will inevitably face each other.
"Look back to LeTV. If LeTV did not spend money on other things in 2015, concentrate on TV, not on cars, and don't make mobile phones. Everyone thinks this is a great company." Feng Xin said .
The storm recently proposed a full focus on TV business in 2018, and sought to inject storm TV business into the listed company. The introduction of this strategy marks that the core market and user base of Stormwind Group will focus on the home Internet market, and the home Internet will become the main battlefield of the storm.
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On December 7, 2017, Stormwind Group received the largest financing since its listing. The company's TV business, the main body of the company, stormed the wind and received a financing of 800 million yuan.
The investors involved in this financing are not general financial investors, but the two upstream companies in the industrial chain, namely Suzhou Dongshan Precision Manufacturing Co., Ltd. (002384, hereinafter referred to as “Dongshan Precisionâ€) and Rudong Xinyi Industrial Investment Fund Management Center (hereinafter referred to as “Rudong Xinyuâ€), Dongshan Precision and Rudong Xinyu hold 10.53% of the shares of Storm TV respectively.
Dongshan Precision is a supplier of Apple and Tesla. It is one of the largest manufacturers of PCB (printed circuit board) and FPC (flexible circuit board) in China. It is the first time to invest in the downstream of the industrial chain.
Feng Xin recalled to the reporters that after the Spring Festival of 2017, the two businesses of Storm TV and Storm Mirror started financing. About May and June, they found two FAs (financing consultants), but it was surprising. The feedback from the two FAs is “very bad†and even they are not confident enough.
"It's not a valuation issue, but a question of trust. The matter of LeTV has made everyone think that Internet TV (company capital chain) is not safe." Feng Xin said.
At that time, the financing consultants retired and proposed to do bond financing. However, the storm never tried and gave up.
“At that time, I went to the financing with two business executives (Liu Fengping CEO Liu Yaoping and Storm Mirror CEO Huang Xiaojie). Financial investors have a high awareness of risk prevention, and they are basically hopeless, so we I looked at my own specialities, and when I met my friends, I decided to look for industrial financing." Feng Xin said.
At the industrial level, Feng Xinyi’s idea is that the upstream of the industry chain is too risk-aware, the upstream is a small profit operation, and the profit margin is within 5%. When the overall trust of the industry is poor, if the storm is once late for a payment When I arrive, I am afraid that all the previous cooperation foundations are ruined.
Therefore, Feng Xin’s idea at the time was to find the downstream of the industrial chain and find retail partners across the country, so that everyone could do it in a way similar to crowdfunding. "Because they know that the products of the storm are not good to sell... I really thought about this." Feng Xin said.
This program was eventually abandoned because of insufficient fundraising and inconvenience involving too many shareholders. "The main reason is that the retailers don't have enough money at hand. A company that sells electrical appliances may earn a million yuan in a year of hard work. There is no balance, and it needs to be turned around. If he gives a family to you, it is a bet. Life," Feng Xin said.
In the end, it was forced to go to the upstream of the industrial chain to find the investor side.
Dongshan Precision, one of the final investors, is one of the suppliers of Storm TV.
Feng Xin revealed that Liu Yaoping was a veteran of the television industry and worked with Dongshan Precision for ten years during Skyworth. Liu Xiaoping's colleague Huang Ligui in Skyworth, and later also served as vice president of Dongshan Precision Management Plant. After the end of the round of financing, Huang Ligui also joined Storm TV.
In the Dongshan precision production of LED screen orders, Apple accounts for a large proportion. According to the data, in 2016 Dongshan Precision acquired a US-based Nasdaq-listed company Multi-Fineline Electronix for approximately RMB 4 billion. The latter main customers are Apple and Xiaomi.
Suppliers investing 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 definitely good, especially in the supply chain management and control." Feng Xin said. This time, the successful investment attracts the deep participation of the storm in the supply chain.
Yuan Yonggang, chairman of Dongshan Precision, said that Dongshan Precision has maintained a close cooperative relationship since the establishment of Storm TV. In the future, Dongshan Precision will provide the ability to manufacture, supply chain, key modules and devices to Storm TV.
In fact, supply chain management is a test of team capabilities. In 2017, Wu Mingjin, the head of Xiaomi TV's supply chain, was informed by the company that he and his subordinates and other six people were bullied and formed a profit gang. They used their positions to obtain the property of the supplier. They were suspected of committing "non-state staff accepting bribes". Arrested by the public security organs. Wu Mingjin was the head coach of Ruiyi Optoelectronics and the head of Foxconn's backlight business for R&D and manufacturing of LCD backlight modules.
"LeTV is killing yourself."
After the financing was successfully completed, the various businesses of the storm gradually pulled back on track, and the fading out of LeTV seemed to give the storm a new opportunity.
Feng Xin revealed that some agents who originally cooperated with LeTV have now cooperated with the storm, including LeTV, the largest agent of LeTV.
Not only the channel providers, but also the upstream supply chain, the smart home surrounding industry chain, and even the decoration company have come to the storm to negotiate cooperation.
In fact, among Internet TV manufacturers outside LeTV, offline agents currently have only two options: storm or millet. Xiaomi is currently vigorously expanding the "Millet House" self-operated offline store, and has a certain competitive relationship with agents.
"Look back to LeTV. If LeTV didn't spend money on other things in 2015, concentrate on TV, not on cars, don't make mobile phones. Everyone thinks this is a great company. Storm and theirs The difference is that the storm does not cost money, there is no hole, it is a small investment." Feng Xin said.
"I have never seen an industry boss, I have rid myself of myself, and I have not been so thorough." Feng Xin lamented, "The storm has always belonged to companies with relatively few resources and funds. At that time, LeTV had copyright and fast broadcast. We don't dare to go, we really can still insist on such a user scale at that time, to support ourselves through profit, the children of the poor are headed home, and finally lucky."
On January 31, Feng Xin said that the strategy of Storm Group in 2018 will be further focused, and all businesses and departments have formulated plans to fully implement All for TV. "If the TV business meets the profit forecast at the end of 2018 and meets the relevant requirements, the listed company is considering seeking to further increase its shareholding and seeking the storm TV business to be injected into the listed company as a whole. The minority stake held by other shareholders of Storm TV is injected into the listed company, and from 2018 Beginning in the first quarter, the core business data of the TV business is continuously announced, including market share, users and ARUP values ​​(average revenue per user).
But when the journalists asked whether there would be investment in artificial wind, new retail, smart speakers, etc., Feng Xin said that the storm would be very cautious. "The big principle is not to do it yourself."
In terms of new retail, Feng Xin believes that offline shopping is more costly. In terms of artificial intelligence, the storm did not invest in a large-scale self-built basic research team, but adopted a strategic cooperation with the University of Science and Technology. The two sides hope to serve the addition of one million artificial intelligence assistant-level TV products, through the TV products built-in Keda Xunfei. The ability to provide speech recognition and semantic recognition for users. The competition for smart speakers has now entered the Red Sea, and Ali and other giants are willing to subsidize. Feng Xin said that he will not enter this field for the time being.
Fighting with Xiaomi
Another investor in this round of financing, such as Dongxinyu, is a high-tech industry guiding fund led by the Rudong County Government of Nantong City, Jiangsu Province. Ruan Jianhua, secretary of the Party Working Committee of Rudong Development Zone, said that after the strategic investment, Storm TV will be the leader, and the AI ​​TV industry base will be built in Rudong to drive the upstream and downstream economic development of the AI ​​TV industry chain.
"In the past, the practice of Internet TV was not involving upstream suppliers. It was completely simple OEM cooperation. In the next step, we may see in 2018 that we started to have our own factory to produce TV, and these factories are mainly like East cooperation." Feng Xin said.
The landing is fast. On February 3, the construction of Storm TV Jiangsu Intelligent Industrial Park was started. The total investment is 1 billion yuan and the area is 200 mu. After the project is completed and put into production, the production capacity of artificial intelligence TV will reach 3 million units within three years.
In Feng Xin's vision, the smart family is the third stage of Internet TV competition.
"Actually, this is an Apple dream. The TV is actually a big-screen apple. It turns out that I sold it out. In the future, it is possible to increase 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, it has basically been “old-for-new†with an annual amount of 50 million units. In the past two years, in the process of upgrading, traditional TV Part of the share was seized by Internet TV.
Feng Xin believes that in the second stage, it is to fight Internet product services, and not just the richness of the content on demand. "Voice dialogue should be a watershed. It can release a lot of new demands from users. Users can no longer simply take the remote control, but can shop, check the weather, notes, games, etc."
The third stage is a smart family. For example, opening curtains and turning on air conditioners can be done through the interactive center and computing center of the smart home. Feng Xin believes that TV or speakers will become the center of smart families. He estimates that at least 20% of households in 2020 will have "smart home" products.
The 2017 performance forecast released by Storm Group on January 31 shows that operating income is expected to reach 181.208 billion to 327.629 billion yuan, a year-on-year increase of 10%-40%. The company said that the main reason for the increase was that the operating income of the Internet TV business, which was dominated by Stormwind, increased significantly, up 40% from the same period last year.
From the release of the industry's first far-end voice AI TV to the first AI screenless TV, the sales growth curve of Storm TV has already appeared in the first three quarters of 2017. The sales volume of Storm TV in the first three quarters was 550,000 units, a year-on-year increase. 29%.
"It is reasonable to say that after the price of the storm TV has risen, it should be more difficult to sell without losing money, but it is still possible to rush."
Feng Xin believes that the competition with Xiaomi TV will definitely intensify in 2018. "Millet is very powerful, they have strength, we have people and attention. The basis of Xiaomi Empire is mobile phone, but mobile phone war will definitely be more intense in 2018, it is impossible to reduce, so no matter what, mobile phone business will consume 60% of their attention. Force, even 80%."
According to the plan, Storm TV will achieve single-user breakeven in 2018 and enter the overall profit period in 2019.
"We have put forward a more radical goal, which is the first time in the Internet TV industry in a year. But we dare not say that the sales target next year, the total amortization cost of selling can be down, we have set the target value of ARUP. Of course, there is data inside, but when this thing is shouted out, it will change." Feng Xin said.
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