Le video network to 64.91 billion of the market capitalisation has become the first gem market value of the company

Absrtact: As of February 13 closed, le Network to 64.91 billion (about 10.4 billion U.S. dollars) market capitalisation became the first gem market value of the company, but also became the second only to Ali, Tencent, Baidu, Jingdong, NetEase, only the goods will be China's seventh largest internet company. And because of its

As of February 13 closed, the music network to 64.91 billion (about 10.4 billion U.S. dollars) market capitalisation became the first gem market value of the company, but also became the second only to Ali, Tencent, Baidu, Jingdong, NetEase, only the goods will be China's seventh largest internet company. And because of its "platform + content + Terminal + Application" eco-vertical industrial chain concept, the total market value of the video network has exceeded its standard for the mark of the excellent soil, Konka, light, blue flood four listed companies 61.6 billion RMB market value combined.

In the absence of a significant improvement in the operation of the video network, its share price would have been difficult to achieve breakthrough growth. However, today's market capitalisation has surpassed Qihoo 360, reaching 10.4 billion dollars.

As a provider of fully competitive Internet video, is it worth 10 billion dollars?

Financial Analysis

Select and Le net market value of the three Internet companies to carry out analysis, that is, netease and only goods will, as well as just be happy to surpass the 360, using the February 14 exchange rate 6.2399 conversion, the main financial indicators as shown in the following table:

From the net profit base, the Q3 net profit of 2014 is only more than the only product will, from NetEase and 360 are far away. The quarterly profit of 360 is about 4 times times that of the Le Video network:

The net profit base is only one aspect of the valuation of the company, and the value of the enterprise depends to a great extent on its ability of continuous growth and profitability. NetEase as an established portal, the game has already become its main business, accounting for its total revenue of more than 90%. It is not easy to maintain the growth rate of 7% per cent because of its own net profit base and the decline in the gaming industry, which mainly refers to end travel. The market has been able to value tens of billions of dollars as it continues to double growth over the last quarter. However, as opposed to the only product and 360来 said, its growth rate is far lower than the latter two. The net profit growth rate of the four websites is as shown in the following figure:

From the point of view of return on net assets, four companies in the video network, NetEase and the only product will not be too much difference. However, the net return on net assets is far below the 360 it has just surpassed.

From a financial point of view, Le Video network does not support its market value of 10 billion U.S. dollars in the financial basis. Therefore, the choice of enterprise strategy becomes particularly important, is it the choice of strategy to support its tens of billions of dollars in the valuation?

Enterprise Strategy Analysis

As we all know, le Video network has been the world has been talking about is its "platform + terminal + content + Application" of the whole industry chain model. Can be summarized as shown in the following illustration:

The Internet investment community has been rife with the phrase: The tool app is worth 1 billion dollars, the platform company is worth tens of billions of dollars, the ecosystem company can give hundreds of billions of dollars of valuation. The market has given the value of tens of billions of dollars to the valuation means that the market recognition of the video network is a platform-oriented company. However, compared to the traditional portals (NetEase, Sina and Sohu), the music network created a new business model. In order to facilitate the analysis of the value of the video network, Jiangle is divided into three parts for analysis, that is, Le Video, +app and downstream terminals (including television, mobile phones and automobiles).

Music video Pictures

le-Vision film has been established in three years to become the country's third largest movie production company, is indeed a success. and took out the small time series of very gold-sucking films. However, the film company's user loyalty is very low, users will only choose good-looking and innovative movies. Still remember once the light media relies on a "Ted" to make a bowl full of pots, also still remember the largest film company Huayi Brothers in 2014 mediocre performance.

In 2015, le Video will be hit by several forces:

First is bat, Alibaba has set up Ali Pictures, Baidu has also set up a Baidu film. As a master of China's Internet 85% flow of bat, its strength is naturally other companies incomparable. The second is the same as the impact of video carriers, such as Youku's Oneness and Archie Art pictures. The third is the old film companies, such as Huayi Brothers, light media and so on. Its four are stars of the film and television production companies, such as Dezong film, Energy, film and television.

As a result, there will be great challenges in the 2015.

Music video and video app

It was successfully listed in 2010 and became the first continuously profitable video operator in China, relying mainly on copyright distribution revenue. The main reason is because of the video site's lack of attention to copyright and funding. But by the year 2014, things have changed radically.

With the video site on the copyright of the gradual attention and video operators are backed by the gold master (such as Alibaba shares Youku, Baidu control Archie Art), the copyright distribution of music network will be greatly challenged. Traditional video sites have paid heavily to buy copyrights and exert their own self-control to enrich their content. According to the financial statements of the video network, the share of the copyright distribution of the music video network continues to decline. Therefore, whether the network can maintain its core revenue in the future still need to play a big question mark.

Downstream terminals

Downstream terminals mainly include the video super TV and just announced the music video phone and super car. As a result of the lack of internet players in the television field, the video Super TV has been a great success on the market, and in 2014 created 1.5 million sales of good results. However, with the SARFT on TV video app restrictions, le video television has lost its output of the content of the music video, Jia Yue Pavilion can only be pinned on two other important screen-mobile phones and cars.

However, there is no shortage of internet players in these two areas, and millet, which relies on internet thinking, has sold sales of 61 million units a year. Elon Musk's Tesla also overturned the entire auto industry. How to win the advantage in these two more competitive industries is a test of the level of managers. What's more, the music is only listed on the phone, and the car is only a concept.

Therefore, I believe that the current financial situation and strategic choice of the video network is not enough to support the current market value of the tens of millions of dollars, and its future performance remains to be discussed.