There are strategic goals behind capital operations

Absrtact: Sheng President Chu Wenyu the role of BofA Merrill Lynch has been dramatically repeated over the course of a slightly slow and uncertain IPO on grand literature, but more dramatically, the managing director of the Bank of America Merrill Lynch Group's China Business and investment banking division

Sheng President Chu Wenyu

The role of BofA Merrill's underwriters has been dramatically repeated over the course of a slightly slow and uncertain IPO, but more dramatically, Chu Wenyu, managing director of BofA Merrill Lynch's China Business and investment banking division, eventually became the new president and chairman of the Grand Group.

"My Wife" airborne.

At least two months ago, the grand interior has already learned that Chu Wenyu is about to assume the incoming news. Even so, the grand interior of the new President's understanding, not higher than the outside world.

Yet Shanda is no stranger to Chu Wenyu. Chu Wenyu has worked in investment banking for a long time, serving BofA Merrill Lynch, Nomura Securities, Goldman Sachs and many other institutions. In the 2003, the Chu Wenyu of Goldman Sachs began to touch the grand. For more than nine years, Chu Wenyu has been keeping in touch with Chen Flyover, and the past two years have been more closely related to Shanda literature.

"It feels like you have feelings for Shanda, there are ideas, we are in transition, or you go to work in grand," a few months ago, Chen to Chu Wenyu thrown this proposal. In fact, the initial Chen is not talking about the grand President of the Post, the scope of the discussion is limited to the grand literature system.

Chu Wenyu in the technology exchange with Sina, said, "My colleagues around me, wife know, I love this company." Although the Bank of America Merrill Lynch has repeated its role in Shanda's IPO underwriter, Chu Wenyu's attitude is quite clear. It is from this point of departure, Chu Wenyu and Chen Flyover "more talk about the more can do."

At this time, Shanda is missing a candidate for president.

Since the second half of last year, the outside world has been able to feel the change of the Internet company very clearly. The privatization of Shanda Group, the adjustment and even sale of a number of business, and the associated layoffs and senior executives leaving ... Chen Tianqiao began to optimize the business layout of a few years ago, obviously this process needs a person to push.

"My role is more like the executive and manager of an entertainment-holding enterprise strategy," Chu Wenyu, who has a clear position on himself. His expectation is to let the resources of the grand interior better coordinate and use. At the moment, Chu Wenyu's urgent task is to "be a wife and to understand the workings of all levels as soon as possible".

Only the east wind.

In an internal gathering in June of this year, Chen Tianqiao, who has not made a public appearance, has explained the present and future of Shanda in a video way. Content Troika (literature, video, games) and split after the grand online (Sheng, Sheng, grand Advertising) together, to build a grand "three horizontal three vertical" strategic framework.

Chu Wenyu Eight words to describe the grand: everything is all right, only the east wind.

"Shanda has entertainment, applications, and platforms built around it." We want to have, grand future not too want new project, but will be more focused, optimize existing resources, Chu Wenyu hope to be able to cooperate with the grand management, waiting for "Dongfeng", it looks like three elements of heaven and earth, is slowly seated.

But Grand is not a fertile land. Chen Tianqiao has a sober understanding: "We are lucky but actually very unfortunate, although we profit the earliest, the most abundant, but the game from the beginning is not a platform-type products, we have no way to grow as Baidu, Tencent, to a platform-type products as the basis for rapid development of enterprises.

Still, Chu Wenyu, who has been in the industry for years, is optimistic that the domestic internet "is still a better opportunity for established companies". Better opportunities come from the accumulation of platform effects, Chu Wenyu said that the platform to obtain opportunities and space, than vertical, new enterprises higher, and more likely to form competition barriers.

Chu Wenyu to Sina Science and Technology admits, afore-mentioned view is also he joins one of grand impetus. Obviously Chu Wenyu is ready to further strengthen the grand platform, which is bound to be one of his biggest job problems.

"The grand past years should have seen, and the forward-looking had been forward-looking, what should be done, there are, but can not be 100% hit rate, Chu Wenyu said," We have not much need to talk about the general direction, but wholeheartedly focus on implementation, how to strengthen the synergy of the grand business. "

Misreading of "capital"

Early November 6 morning, Chen Flyover issued an internal mail, formally introduced and welcomed the Chu Wenyu. Chen flyover in that not long mail mentioned, Chu Wenyu will be the day-to-day management of various business and capital operation, bring great help. The reference to capital operation and the background of Qiu, let the outside world for the grand future again.

Chu Wenyu bluntly, this internal mail brought the outside misreading. He explained that the capital mentioned by Chen Tianqiao is not the concept of pure capital, but the strategic capital. The so-called strategic capital mainly covers two kinds of situations: first, all capital operations have a strategy behind, and the second is to achieve strategic objectives through capital measures.

"Simply speaking, Shanda is a business, not a financial institution." Frankly, if we're going to play capital, we might as well go out and do a private placement, "Chu Wenyu said." When we talk about capital, we are not decoupled from strategy.

For the grand past various and "capital" related to the movement, Chu Wenyu not think is "capital operation". Taking grand privatisation as an example, Chu Wenyu points out that privatisation helps Shanda to focus more on long-term interests rather than short-term results, while helping investors clarify the intertwined relationship between the grand games.

Chu Wenyu to Sina technology that privatization is a strategic consideration, not just capital operations. Any enterprise must consider the causes and consequences before privatization. For the rumor that the outside world is likely to return to the A-share listing in the future, Chu Wenyu did not respond positively, but said that "there is nothing in the grand plan".

As for the Wen of the game category, Qiu is attributed to the replacement of cornerstone investors with a fault.

Another Qiu Wen need to clarify the fact that his accession and the grand literature listing point of time is not directly related. As the chairman of Shanda Literature, Qiu Wen will cooperate with existing management team mainly from strategy and market. We've already ready for IPOs, but there's absolutely no need to be the market when it's bad, he said.

The following is Sina Science and technology dialogue Chu Wenyu text record:

Nothing's out of the plan.

Sina technology: Grand and Qiu total contact should have been a long time, how long did you think to make the decision to join the grand? What is the first opportunity for you to start with the grand, Chen flyover to contact?

Chu Wenyu: In fact, before BofA Merrill Lynch, I worked in Goldman Sachs in 2003 and began to touch the grand. The Grand IPO was also done by Goldman Sachs. For more than nine years, I have kept close contact with Shanda. In the past two years, it has been approached by the listing of Shanda literature. Because we are a big investment bank, there are many opportunities to communicate. We used to catch the opportunity to talk about the grand view, so I was more familiar with the grand.

A few months ago, Chen always put forward "feeling that you have feelings for Shanda, very thoughtful, we are also in transition, or you to the grand to work." I didn't expect him to mention it, and frankly, I felt lucky and didn't think much of it. Based on my understanding, feel that there are a lot of things to do, the future grand also have the opportunity to bigger.

Sina Technology: Shanda In the past few years, there have been brilliant twists and turns. How do you position your present grand? And how did you change your perception of the company before and after you joined the Grand club?

Chu Wenyu: The big ups and downs of these years. Enterprise development is like this, Apple has many twists and turns in history, quite normal. I'm thinking about not taking part in the company and the grand future, not thinking about it, but focusing on the resources available. How to better play, to better use of existing resources, which I am more concerned about, but also I will cooperate with senior executives and Chen one of the general work.

From the history, Chen is always a man of thought ahead, very vision. You'll know what I mean by sorting out some of the things Chen has done over the last 12 years. He is very forward-looking. Shanda In addition to contact with more games, literature, other business has been in the silent layout.

Now the Grand is eight words: Everything is ready, only the east wind. Shanda has entertainment, applications, and platforms that form around these. We want to have, the grand future does not want new projects, but will be more focused, optimize the existing resources. "Everything is all right", I was ready before I joined. I hope to cooperate with management to blow up the east wind.

There was no surprise after I came in. I always think that Shanda is a company full of misunderstanding, the grand past has never made any excuses, silently bear the misunderstanding ahead.

In fact, there is nothing special about past events, which can be used in two words: execution. Our strategy is very clear. Shanda before not too much news, just these things let everyone more concerned about, there is a relatively large amount of information contrast. If you look at your child all day, you don't think he has a change, but a distant relative may feel a lot of change when he looks at it occasionally. Grand no matter, not in the plan, I do not want the outside to read too much.

Established Internet companies have more advantages

Sina Science and Technology: Tang June, tan in history has served as a grand president of the work, but you are the first with investment banking background of the grand President, outside also guess Grand will from the industrial to investment transformation. We would like to know how you are positioning yourself in the grand role, while you are ready to be the grand collar in which direction?

Chu Wenyu: Before Tang always, Tan for I made a very high benchmark. When they were president, Shanda or around a single flagship business enterprise, today we have basically become a group, under a very large number of enterprises, including listing, to be listed, has been retired, transformation, incubation and so on. This is Chen's plan for many years, the grand content as the core, the development of the cause, gradually become an entertainment holding type group.

My role is more like the executive and manager of an entertainment-holding enterprise strategy. This is my own position. We are all ready and have a lot of resources, and I hope that I can better coordinate and utilize these resources.

Sina Science and Technology: How do you look at the domestic Internet (including mobile internet) industry competition situation, you feel grand advantages and shortcomings in which aspects? Grand need not a thorough reconstruction?

Chu Wenyu: From a more highlevel point of view, the domestic Internet or established companies have a better chance. So many years of accumulated advantages, especially the industry into the Warring States era, vertical shuffle stage. We lack innovation compared to the United States, so the accumulation and advantages of these established Internet companies are more obvious and more likely to create competition barriers.

The old Internet enterprises in China, everyone in the direction of the platform to go, in this situation, platform opportunities and space, than vertical, new enterprises to create higher. Even more unfortunate, the market offers a lot of opportunities to platform companies. Vertical enterprises to achieve absolute boss has a good day. Because of this view, I just joined the grand.

As I said before, Shanda has seen it in the past few years, the forward-looking are looking forward to, what should be done, there are all, but can not be 100% hit rate. We do not need to talk about the general direction now, but wholeheartedly focus on the implementation, how to strengthen the synergy of the grand business.

Sina technology: At this stage, your focus will be on what aspects?

Chu Wenyu: First, the group has a clear strategy, I am leading the team to implement the established strategy. Second, to help the major subsidiaries to improve the efficiency of the use of resources, third, in overseas business, I will discuss with Chen sum colleagues.

Sina technology: Just talked about the background of the investment bank, Chen also mentioned that you have the capital operation of Shanda's operations will have a "great help." So how do you move from the capital level to the development of grand business? As we all know, Shanda's business is numerous, how do you assign these items priority on your timesheet?

Chu Wenyu: Our internal mail, let you see there may be misunderstanding. Chen always talking about the capital, is not the concept of pure capital, we use the word capital, refers to the strategic capital. This covers two concepts: one is that all capital has a strategy behind it, and the second is to achieve strategic goals through capital. Simply speaking, Shanda is a business, not a financial institution. Frankly speaking, if we want to play capital, we might as well go out and do a private placement. From this point of view, I hope that we can have a more accurate understanding of the capital when we talk about it. When we talk about capital, we don't decouple from strategy.

Business priorities, fully look at the group's strategy. As a wife, I hope to understand the operation of various levels as soon as possible. Now it's hard to sort out that a few businesses will take up 80% of my time. In addition, I am still more focused on the big business, incubating Investment Enterprises, our group has very experienced chief investment officer responsible.

Sina technology: In accordance with the grand disclosure of information, you will also be responsible for overseas business and strategy. So what does Shanda expect from overseas? Which business will be the core of expansion, which market will be the focus of expansion?

Chu Wenyu: Overseas strategy also talked for some time, this is our business secret, our product, service, community, our model and other Internet enterprises, have better elasticity, can become an international company. We have to make good use of, Chen is always very concerned about. I can't say the priorities, but overseas is definitely the point.

The so-called elasticity, such as games, is relatively easy to break the boundaries of culture. The internet a few relatively large applications, content is the most easily output, one is the content itself internationalization, output, the second is based on the content of the platform, we have the opportunity to put this set of know-how, platform, moved to foreign markets. We see some real opportunities.

There are strategic goals behind capital operations

Sina Science and Technology: We notice, you also serve as the chairman of Shanda Literature, does this mean that the listing process of Shanda literature will have substantial progress? Besides, what aspects of Shanda literature will you focus on?

Chu Wenyu: I had always talked to Chen in the grand time, is to talk about Shanda literature. The more I talk, the more I feel I can do it. I too like the Grand Literature, network literature model, my colleagues around me, wife know, I love the company. The company has the opportunity to become a very great company. Online literature is our own invention of a business model, only recently saw someone overseas doing the same thing. So this is a very special thing. On the one hand it is very Chinese stuff, on the other hand, there are huge opportunities overseas.

Shanda literature has a very strong management, can not find the total (CEO Hou), Wu (President Wu Wenhui) a better team. As chairman, I will only cooperate with the strategic cooperation and the market. Shanda Literature Listing, we also have public delivery in the SEC, can not say too much. We have already ready for the IPO. We are a profitable company, can wait until the market is good time again, there is no need in the market bad times hard, this point of time and my personal affiliation has no relationship.

For the past more than 10 years, the Chinese concept has sometimes been a blessing, sometimes a curse, but it has never been a curse for more than three years. Since 2011, the situation has become bad, so in 2013 years may be better, I think more important is the enterprise itself, especially now the capital market for Chinese enterprises have a lot of misunderstanding and prejudice. The better the business is, the better the market door will never close.

Sina technology: In the past a period of time, Shanda both to be listed business, also has the privatization business, how do you evaluate the capital level operation before Shanda? How will the capital operation and investment direction of the grand future change?

Chu Wenyu: I think what I did before Shanda was not capital operation. Shanda has always been, only must use the capital market means, only then will use the capital to achieve the strategic goal. These are just means, not ends. In the past, Shanda Group in the capital Market project, its strategic objectives are very clear. Grand 12 years have only one strategy, is the content. The game has long played the leading role, after the Grand game split listing. It was a very make sense thing to split the game at that time.

The grand privatisation of the beginning of the year was clearer. First, the game after the break-up, with the parent company listed at the same time, unavoidable investors overlap and confusion. After the parent company's market, the investor's purpose is more clear, likes the game to cast the game. In terms of long-term goals, today's grand interaction as a parent company, has not only a game of a subsidiary, these subsidiaries are in different stages of development, in a case, the parent company would like to look at the long-term, but as a listed company will not be up for a long time, because each quarter with the market account, Long-term and short-term benefits do not strike a balance. Listed companies should pay attention to short-term effects voluntarily and involuntarily.

There is nothing special about the timing of privatization, but we have come to a turning point.

Sina technology: In the grand plan, the stock price and valuation of the long slump of the grand game, whether there is also the intention to privatize?

Chu Wenyu: This is not a convenient comment for me. But it's not just a big game, but the whole game class--I'm bringing back the investment bank's hat--the problem now is that the growth-oriented investor has withdrawn from the game unit. With the development of the company, the composition of the investors will have a qualitative change, the game-type stock investors have become value-investing investors. These people value basic values: There will be no annual high growth, more cash flow, and a slowing of kinetic energy. But there is a fault, the value of investors have not come in, a large part, is the prejudice against China, the current stagnation, and now the cornerstone of the investor fault, will be reflected in the price.

I have always stressed that privatization is a strategic consideration, not a financial engineering project. Cannot just be a capital operation. Be sure to figure out why you want to privatize, what you can do after privatization, what the odds are, and how to do it. Can we go back to the market? If there is a risk of listing, there is no other way. This is thang big consideration, now the private equity fund very lacks the big project, therefore often considers from the pure financial investment angle, this is more dangerous.