LeEco unit Leshi hopes ‘new’ name will help deliver a fresh beginning
The main listed unit of LeEco now proposes calling itself ‘New Le Shi Information&Technology Corp’, which it claims better reflects a strategy which is based on smart TVs
After building a new management team and rewriting its strategy, Shenzhen-listed video content company Leshi internet Information&Technology is now proposing changing its name, in a final effort to distance itself from its founder Jia Yueting, the head of cash-strapped LeEco.
The main listed unit of LeEco now proposes calling itself “New Le Shi Information&Technology Corp”, a barely changed name which it claims better reflects a strategy which is based on smart televisions, according to a company statement on Wednesday.
Jia resigned from all posts at Leshi in July, with new investor Sunac China’s chairman Sun Hongbin taking over as Leshi’s new chairman.
“The new name is a clear signal the company wants to put the cash woes of its founder Jia Yueting behind it and move into a new era,” said Hu Jiaming, a Shanghai-based analyst with Capital Securities.
Sun poured 15 billion yuan (US$2.25 billion) to bail out Jia’s LeEco group of companies, despite Jia remaining a major shareholder in Leshi.
Sun’s arrival effectively marked the end of the road for Jia, who had been battling mounting debt after expanded his video-streaming business into what he called an ecosystem, of what seemed like unrelated businesses built around mobile internet, comprising smartphones, television sets, film production and even a self-driving electric sports car.
Since Sun’s takeover, a new management team has been established, and Leshi has also set up a new strategy to reposition itself as a provider of family entertainment content.
On Sunday, it also said it plans to buy investment and financial service assets from an affiliate for up to 3 billion yuan as part of the restructuring, a financial arrangement between the listed company and its affiliate which it said fits its strategy and will help it provide internet finance to its users.
According to Leshi’s latest statement, it wants to use internet-connected smart TVs as its foundation to build an ecosystem that is made of “platform, device, content and application”.
Hu of Capital Securities said the shift in strategy is a wise move for Leshi, but the success of its new management team is still unproven.
“Leshi is not in a good position to compete directly with video streaming service giants such as iQiyi and Tencent video,” he said.
“But the success of the new strategy depends on how many televisions Leshi can sell and how well it can retain its existing customers.”