Op­ti­mism on prof­its

LeEco says its an­nual rev­enue will more than dou­ble

China Daily (USA) - - FRONT PAGE - By MASI masi@chi­nadaily.com.cn

Chi­nese in­ter­net firm LeEco said on Wed­nes­day its 2016 rev­enue will more than dou­ble to ex­ceed 50 bil­lion yuan ($7.38 bil­lion), as the firm works hard to ease in­vestors’ con­cerns that its over-ex­pan­sion ef­forts will af­fect the cash flow of its listed arm and drag down its long-term growth.

Jia Yuet­ing, CEO and founder of LeEco, said the Bei­jing-based firm’s profit will also rise sig­nif­i­cantly next year, driven by the rapid growth of its video-stream­ing and TV busi­ness.

He­made­thecom­mentsa­tan in­vestor con­fer­ence in Bei­jing, af­ter shares in its listed arm Leshi in­ter­net Information and Tech­nol­ogy Corp de­clined in the past few days amid con­cerns over its fi­nan­cial health.

“We will ad­dress the cap­i­tal is­sues in three to four months,” Jia said. The Chi­nese bil­lion­aire ad­mit­ted on Sun­day that LeEco’s global ex­pan­sion has gone too far, putting big pres­sure on its lim­ited cap­i­tal and or­ga­ni­za­tional ca­pac­i­ties.

LeEco’s rev­enue in 2016

LeEco, founded in 2004, started as a video-stream­ing ser­vice provider akin to Net­flix Inc, but it rapidly grew into a firm with a pres­ence in smart­phones, TVs, cloud com­put­ing, sports and elec­tric cars.

On Wed­nes­day, Leshi’s shares dropped 2.23 per­cent. Its mar­ket value has de­clined by about 10 bil­lion yuan in the past six trad­ing days.

Guo Xiangjun, who has in­vested about half of his dis­pos­able in­come into Leshi, said he is op­ti­mistic about the firm’s long-term growth, de­spite its cur­rent trou­bles.

“I don’t worry about its prof­itabil­ity. LeEco’s busi­ness spans dif­fer­ent sec­tors which can sup­port each other’s de­vel­op­ment. Jia has also hired the best global tal­ents to run new busi­ness,” Guo said af­ter at­tend­ing the in­vestor con­fer­ence.

LeEco also promised on Wed­nes­day that de­spite the fi­nan­cial pres­sure, it won’t chan­nel in­vestors’ money into its LeSEE elec­tric car project, which is fi­nan­cially in­de­pen­dent from the listed arm. Xue Jin and Fang Wenyu con­trib­uted to this story.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.