It may be related to The former CEO of LeEco Finance, Mr. Wang Yongli. Different from other ecosystems, LeEco Finance is the most stable business among the original 7 ecosystems of LeEco. In the crisis of LeEco, this team fully demonstrated the quality of an elite team, and managed to overcome small difficulties. Even in the crisis, there was no financial product crisis or even any default.
The comments on this article are mixed, but for such a controversial company and person, it is certainly not convincing to stand on a single point of view. However, the fact that LeEco Finance was acquired with 3 billion is enough to attract attention. In today’s era of excessive media noise, finance is a high-risk business. However, it is really commendable that LeEco Finance can maintain stability and not be disturbed by too many negative endorsements of the brand when the ecosystem of LeEco completely collapses. A few days ago, Letv finance announced the replacement of Letv finance.
However, recently, in the tense atmosphere of public criticism of Jia Yuting’s return to China, FF financing news has been repeatedly uncovered, LeEco Finance has been repeatedly cleaned up, the key word is “LeEco Finance injected into the listing system”. More media people have discovered LeEco Finance, and more different voices have emerged in the industry about LeEco Finance from various perspectives.
Therefore, it is the most appropriate time to look at LeEco Finance whether it is stable on the surface, or whether it is corrupt on the outside.
Why is LeEco Financial optimistic and included in the listing system?
Leeco Finance, founded in August 2015, is the latest of the seven parts of LeEco’s ecological layout. As the seventh sub-ecosystem of LeEco, LeEco Finance established several business companies successively in the early stage, such as small loan, asset management, factoring and equity-based crowdfunding. In September 2016, the financial channel of LeEco Mall was launched, and in the same year, the 919 Music Fan Festival achieved a transaction volume of 600 million yuan. It can be seen that The growth momentum of LeEco finance at that time was very rapid.
Until the end of 2016, LeEco was reported to have a financial crisis, from overdue payments to suppliers to large-scale layoffs within LeEco, these problems were concentrated in 2017. Just in January 2017, LetV received a total of 16.8 billion yuan in financing led by Sunac. Four months later, Mr Jia resigned as general manager of the listed company. At a media conference at the time, Mr Jia was preoccupied with building cars, saying that LeEco’s listed companies were in a period of rapid growth and that non-listed companies would bottom out in a year or two.
At that time, referring to the LeEco crisis, related party transactions between listed companies and unlisted businesses have become the focus of public attention. And these connected transactions are naturally closely related to LeEco Finance. But later, as the development of things gradually out of control, LeEco Finance also affected and began to change ownership.
In early July 2017, the production and operation business of non-listed companies was suspended due to the emergency freezing of LeEco’s assets. Sun Hongbin was elected chairman of LetV on March 21. On September 24, LetV announced that it planned to purchase 100% of LeEco’s equity, and the transfer price is expected to be less than 3 billion yuan. On the evening of September 27, LetV officially changed its name to “New Letv”. This was followed by a series of acquisitions of LeEco Finance by New LeEco.
The acquisition of LeEco Finance by Sun Hongbin at 3 billion yuan is undoubtedly the biggest affirmation of LeEco Finance. The fact that LeEco Finance was incorporated into the listed company system in the face of the overall collapse of LeEco Group and the complex related financing problems, the fact that LeEco finance realized three times of value-added in two years from the initial capital of 1 billion, is indeed one of the performance of its stable business. For Leshi, the importance of LeEco Finance in the current situation is also reflected in four aspects:
First, LeEco has said that the inclusion of LeEco Finance into the listing system is to inject high-quality assets into listed companies. In fact, LeEco Finance, as the seventh ecology, must be dependent on the previous ecology. The payment, loan and other businesses involved in LeEco finance are firmly tied up in every link of The Eco circle of LeEco. Leeco Finance, which is independent of LeEco but exists within LeEco, is indeed a high-quality asset for LetEco.
Second, With the help of LeEco Finance, LetV can solve the problem of receivables with related parties by means of debt repayment. As a part of the listing system, The related financing between LetV and unlisted enterprises is the main source of the crisis of Letv. Apart from the relationship between LeEco and related party transactions, if LeEco can help LeEco solve the problem of related receivables, it will bring more than 3 billion benefits for New LeEco.
Thirdly, In the semi-annual report, LetV mentioned that the inclusion of LetV Finance into the listing system is of great strategic significance to letv’s experience and resource accumulation in financing channels, capital planning and management. This sentence is enough to prove the importance of LeEco Finance. Leeco Finance is not only an important financing and loan hub in the original LeEco ecology, but also the accumulated experience of LeEco in capital planning and management as well as its “all-in-one” function in the whole ecology make LeEco pay special attention to this acquisition.
Fourth, Sun Hongbin, as chairman of sunac, is paving the way for his own company by taking over LeEco. It is reported that Sunac China has not developed financial business since 2003, and LeEco Finance is undoubtedly able to fill the gap well. Now that LeEco Is included in leEco’s listing system, Sunac can continue to provide support for LeEco and make It more diversified and versatile. Kill two birds with one stone.
It can be seen that in two years from scratch, LeEco Finance is one of the last ecology established among the seven sectors, but its value in the whole ecology is worthy of its name.
Why can LeEco Finance lay such a solid foundation?
Comparing with other sectors of LeEco ecosystem, it is not difficult to find that most businesses except LeEco Finance have been hit hard in the crisis, and user reputation and stickiness have plunged, but LeEco Finance is still running well. It is understandable to single out LeEco Finance, but when we look at the whole ecosystem of LeEco, it is led by the operation of LeEco Finance, which makes people wonder how this one of the latest LeEco businesses can do this.
In fact, if we dig into the development of LeEco Finance in the ecological map of LeEco, it is not difficult for us to understand why LeEco Finance can stand out in the crisis.
First, LeEco Finance is relatively independent in business, and its participation in the whole ecosystem is not high. Leeco Finance was founded after the automotive sector, and leEco’s focus had shifted to the automotive business under Jia’s leadership. Therefore, under the background that the top six sectors have been basically formed, LeEco Finance has suffered the least strategic intervention in its development within the group. As is known to all, LeEco’s products are always sold at a very low price. While stretching the profit line, it also leads to the deviation of the whole business, focusing on LeEco Cars. However, Because LeEco Finance was not overly interfered, it was not dragged into the crisis of LeEco’s capital chain until it had a shallow involvement.
Second, Wang Yongli, former CEO of LeEco Finance, as the former vice president and senior researcher of Bank of China, joined LeEco as CEO in the same year as the founding of LeEco Finance. On the one hand, Letv financial year player-wise is a large number of traditional financial institution managers, their style, business operations, cautious, conservative, of course, may also with Letv financial missed each other gold first, in short in their lead bottom, Letv financial to maintain calm blindly expand business in other tectonic plates. Although Yang Xinjun has taken over, the strict business framework and risk control methods of the original LeEco Finance have been fortunately retained, and talent has undoubtedly become one of the most valuable things in the financial system of LeEco.
Thirdly, LeEco Finance and LeEco ecology are closely related and inseparable. Jingdong Finance is attached to Jingdong Mall, ant Financial cannot separate itself from Alibaba’s e-commerce business, so is LeEco Finance, which cannot be separated from the transaction links in LeEco’s system. Without LeEco, it would be difficult to support a single financial log, and without finance, LeEco could not be a complete ecology. It is precisely because of the bundle with many businesses in leEco that LeEco Finance can absorb nutrients and grow stronger.
Now, LeEco finance is optimistic by Sun Hongbin, in addition to the benefits of LeEco, but also benefited from several financial licenses with good gold content and LeEco’s land in Chongqing heavy asset holdings. Of course, For chongqing this place, Sun Hongbin has more strategic ideas. But LeEco may not be that good.
Leeco finance is not perfect, hidden problems inside
As a matter of fact, LeEco’s ecosystem has almost collapsed, and LeEco Finance cannot completely stay out of the problem and walk away from it by injecting itself into the listing system. Leeco Is also burdened with too many responsibilities and dangers.
Now, the biggest problem of LeEco Finance first comes from the former LeEco Group. As the performance of the whole LeEco Group collapsed, I am afraid that leEco is still in the “hangover”, and more unexplained opinions on the Internet will also have a certain impact on LeEco Finance. With fuzzy boundaries between related party transactions, and listed financing, loan relationships between system, are virtually interfered with Letv financial, is the whole Letv brand crisis in 2017, public opinion hit and depending on the system status influence related party funds, advertising networks, terminals and membership revenues have fallen dramatically, Leeco lost 636 million yuan in the first half of this year. At this time, LeEco Finance quickly injected into the listing system, undoubtedly with this risk to leave, it is very likely to hurt New LeEco.
Secondly, although the current financial entity of LeEco is about to be injected into the listed company LetV, more problems such as license application are still on the way. August 9, 2017, originally by Jia Yueting brother and sister control of all of lepa marketing equity has been pledged to LetV network. Lepa Marketing is the sole shareholder of LeEco Investment Management co., the financial entity of LeEco, which means it is certain to be acquired. At present, LeEco finance has licenses for small loans, factoring, fund sales, insurance brokerage and other core businesses of supply chain finance and Internet finance. There are still more licenses for private banking, insurance, credit investigation and other aspects that have not been obtained and are difficult to obtain.
Finally, how to solve the related party transaction problem left by the original LeEco system. It can be seen from the above content that the reason why LetV chose LetV Finance is largely that LetV finance, as a high-quality asset, can solve the accounts receivable problem of related party transactions with debt repayment. This is the most urgent problem for LeEco, which has scarce cash flow, and if LeEco Finance cannot play its due value, it would be better for LeEco to solve it by itself with sunac and other enterprises. However, it is obvious that LeEco Finance also has associated financing risks, which depends on the implementation of “ecological anti”. The chemical reaction generated by the deep integration of various ecosystems in LeEco Group makes LeEco Finance inseparable from the crisis of capital chain. So even if the acquisition news is solid, LeEco finance still has a long way to go.
Leeco Finance failed to catch the first train of Internet finance before, and was further aggravated by the Crisis of LeEco. It can be said that the crisis of LeEco ecology was a heavy blow to LeEco Finance, but now LeEco Finance itself is a little overwhelmed, and the difficult journey to achieve cooperation with LetV network has just begun.
Leeco finance is not the last song, there is more possible
From LeEco, we can see that although financial enterprises are very fragile and vulnerable to various types of risk shocks, mutual Finance enterprises should have the quality and ability to at least stay out of the crisis on the surface and skillfully avoid the outbreak of the crisis.
First, business ability. Today, LeEco’s related receivables alone amount to 5.2 billion yuan, and these bills concentrate all the financial risks of the original LeEco ecosystem. Leeco Finance can use multiple financing channels to sell creditor’s rights, recover cash in advance, and transfer and share risks.
Second, clarify yourself. Now that LeEco has exited from several P2P platforms, it is “standing alone”. Although its P2P business is still under suspicion of related financing, a clearer business segment will undoubtedly boost confidence.
Third, the user base. Coupled with the solid foundation that LeEco has built over the past two years, it can now offer more services to its partners upstream and downstream. These users, who are still tied to LeEco’s ecological chain, give More tolerance and trust to LeEco because of its stability.
Leeco Finance was originally the core of capital flow in the whole Ecosystem of LeEco, and businesses in the whole ecosystem of LeEco have close financial related transactions with LeEco finance. For example, LetV has carried out many investment and financing activities through LetV Finance. Letv was also an important source of funding for LeEco, adding business and revenue. The mutual exchange of capital between the two is a normal related business, and they maintain a relationship of energy transfer between each other, which makes it more logical for LeEco To inject into the listing system.
Leeco finance is about to break up with the original LeEco ecology. Without the help of LeEco Finance in the remaining LeEco Sports, LeEco Mobile and LeEco Auto ecology, there is undoubtedly more concern. While taking over LeEco Finance and having more possibilities, LetV also took a big risk. Now, without LeEco, LeEco Finance is actually looking for a new ecology, and LeEco network, the former partner, is naturally the best candidate.
It can be seen that the survival of LeEco depends on the closed loop of the ecosystem of LeEco. Fortunately, Sun Hongbin did not let LeEco survive on its own or separate it from its “original family”. Now looking back at Jia yueting’s dream of building a car, I am afraid that without LeEco Finance, LeEco’s auto sector is also missing an important arm; It is sad that the once glorious ecology has fallen apart.
Since then, there has been no LeEco in the world. However, LeEco Finance is more like a fire left by the original LeEco. Maybe it is not the time yet. Now the scarred and crisisridden LeEco Finance is still young and has more possibilities.
Liu Kuang, meditation on the Internet, wechat official account: Liukuang110