On July 25th, Dong Yuhui has decided to resign from the senior management of the company's employees and a subsidiary entity of the company due to Dong Yuhui's professional aspirations, investment in other industries and personal time arrangements, which will take effect on July 25, 2024. $EAST BUY (01797.HK)$Announcing the departure of Dong Yuhui and also that Dong Yuhui will acquire 100% equity of fellow company. After the news was released,$New Oriental (EDU.US)$US stocks fell nearly 6%.
Dongfangzhenxuan announced on the HKEx that Dong Yuhui has decided to no longer serve as an employee of the company and a senior management of a merged affiliate due to his career ambitions, investment in other businesses, and personal time arrangements, effective on July 25, 2024.
In addition to paying all the promised benefits and compensation to Dong Yuhui, Yu Minhong, the chairman of the board, has sought approval from the board of directors and the compensation committee to distribute all the remaining undistributed surplus profits of Hui Tongxing to Dong Yuhui. In addition, according to the listing rules and the detailed rules of organization of the company, Yu Minhong has made arrangements for the settlement price of Dong Yuhui's acquisition of Hui Tongxing. In order to maintain the normal operation of Hui Tongxing, the company will provide a self-developed information system to Hui Tongxing for free.
According to the announcement of Dongfangzhenxuan, Hui Tongxing was established on December 22, 2023. During the period from December 22, 2023 to June 30, 2024, the company's net profit was 0.141 billion yuan.
Yu Minhong responded to Dong Yuhui's departure in the Douyin comment section: "Since its establishment, all the income that Hui Tongxing has obtained, including all profits, has not been taken by Dongfangzhenxuan. It has all been left to Yuhui and Hui Tongxing to support their continued development." This also means that in addition to the company, Dong Yuhui may receive a reward of 0.14 billion yuan.
Dongfangzhenxuan also announced to repurchase the company's shares worth no more than 0.5 billion yuan in the public market during a one-year period.
Dong Yuhui bought 100% equity of Hui Tongxing for 76.59 million, and Yu Minhong stated: "I arranged for the money!"
Yu Minhong: The guidance and rumor of a small number of malicious forces directly led to the estrangement between East Optimization and Hui Tong Xing.
After the above announcement was made, Yu Minhong replied to a letter to the shareholders of East Buy: In order to express my gratitude to Yuhui, in addition to paying all the promised benefits, I have requested and obtained the consent of the board of directors and the remuneration committee to award all the net income incentives of Huitongxing to Yuhui.
However, Yu Minhong emphasized in the Douyin comment section afterwards, "I also arranged for the equity purchase payment needed by Yuhui to acquire Hui Tongxing in compliance with the rules of listed companies and the company's articles of association. The meaning of this sentence is that I arranged for the money that Yuhui used to purchase the company, and the company was given to Yuhui for free."
Dong Yuhui responded to his departure: "The future is unpredictable, and we can only do our best."
After the announcement was released, Dong Yuhui posted in Douyin, saying: "Considering the actual situation and the development plan, after friendly consultation and unanimous decision between the two parties, Hui Tongxing will start running independently. From today onwards, after leaving the shelter of the port, Hui Tongxing has to sail alone into the vast sea. The future is unpredictable, and we can only do our best."
Below is the full text of the open letter:
Yu Minhong also issued an open letter to the shareholders and friends of Dongfangzhenxuan, saying that in order to express his gratitude to Yuhui, in addition to paying all the promised benefits, I have earnestly asked the board of directors and the remuneration committee for approval to award all the net profits of Hui Tongxing to Yuhui.
Yu Minhong stated in the letter that although there has been no obstacle in communication between me and Yuhui, the complicated public opinion dispute, coupled with the guidance and rumors of a few malicious forces, has directly led to the estrangement between Dongfangzhenxuan and Hui Tongxing. At the same time, I myself am deeply involved in the public opinion tide, and continuously attacked and stigmatized. Yuhui has also been subjected to many unfounded accusations and injuries, which has led to huge uncertainties in the development of the two companies, violent fluctuations in stock prices, and a sharp decline in the company's reputation and reputation.
I know that many shareholders have been trusting East Buy all the time. Many shareholders have followed its development since its inception and have been happy for its success and sad for its setbacks, and have been with us until today. As the chairman and CEO of the company, I have the responsibility and obligation to explain the causes and consequences of Dong Yuhui's departure from East Buy's independent subsidiary.
As we all know, Dong Yuhui has made significant contributions to the development of East Buy. Without Dong Yuhui's ignition, there would be no rapid development of East Buy. Therefore, protecting Yuhui and letting him develop and grow together with East Buy is my responsibility and obligation. I have maintained a good communication with Yuhui and urged the management to give Yuhui as much support as possible, and occasionally mediated possible misunderstandings and conflicts between the two sides. However, the sudden outbreak of what netizens defined as the 'short writing incident' caught us off guard and exposed many problems, putting me and Yuhui in an embarrassing situation, and the company was also in turmoil.
East Buy is a company that has risen with live streaming sales. I know the value of Yuhui to the company. Although many companies threw olive branches to Yuhui at that time, due to the frank communication and mutual trust between Yuhui and I, Yuhui eventually decided to stay in East Buy and work with me. In order to allow Yuhui to better play his talents and have more autonomy, and to avoid unnecessary conflicts and contradictions, we decided to establish Huitongxing, which will be led by Yuhui as director and general manager and fully responsible for the company's business decision.
After discussion and approval by the board of directors of East Buy, attractive guaranteed income (cash + equity) will be given to Yuhui regardless of how Huitongxing is operated, to show recognition of Yuhui's value. In order to ensure that Yuhui can design the future of Huitongxing according to his own wishes and respect his interest in knowledge and cultural dissemination, the board of directors has no requirements for the income of Huitongxing. He can focus on recommending books, interviewing writers and promoting cultural tourism. At the same time, I promise that in addition to getting all the guaranteed income, if Huitongxing has income, Yuhui can continue to receive half of the company's net income distribution. In order to ensure that Yuhui and Huitongxing can start work in a timely manner, under my coordination, we quickly registered Huitongxing, used more than 1,000 square meters of office space in a few days' time, reorganized about sixty mature teams, and provided sales systems, supply of goods and a large number of equipment and facilities support.
As a result of Yuhui's great personal influence, Hui Tong Xing was launched in one fell swoop. I am also happy about the prosperity of Huitongxing, while working hard to maintain the development of East Buy's original business and the joint development of Huitongxing's business. Although there is a certain degree of competition between the two sides, I think this is not a problem. I am trying to coordinate and support the resources.
East Buy is a company that has risen in popularity due to live streaming sales. I know the value that Yuhui holds for the company. Although many companies have extended olive branches to Yuhui, due to our open and honest communication and mutual trust, Yuhui ultimately decided to stay with East Buy and work together with me. In order to allow Yuhui to better demonstrate his talents and have more autonomy, and to avoid unnecessary conflicts and contradictions, we have decided to establish Together with Hui Company, with Yuhui as director and general manager, fully in charge of the company's business decisions.
According to the announcement, RMB 76.5855 million yuan will be paid in two installments. Dong Yuhui needs to pay RMB 38.2927 million yuan within 30 working days from the date of the agreement and pay RMB 38.2927 million yuan within 10 working days from the completion date of the transaction.
As a result of Yuhui's great personal influence, Hui Tong Xing was launched in one fell swoop. I am also happy about the prosperity of Huitongxing, while working hard to maintain the development of East Buy's original business and the joint development of Huitongxing's business. Although there is a certain degree of competition between the two sides, I think this is not a problem. I am trying to coordinate and support the resources.
As an internet-based company, the power of public opinion often affects the company's development. Although there are no barriers to communication between me and Yuhui, the complex public opinion disputes, combined with the guidance and rumors of a few ill-intentioned forces, directly caused estrangement between Dongfang Zhenxuan and Yuhui. At the same time, I am also deeply involved in the public opinion storm, being attacked and vilified continuously. Yuhui has also suffered many unfounded accusations and injuries, which has continued to this day. This public opinion environment has led to significant uncertainty in the development of both companies, with stock prices experiencing huge fluctuations due to external influences, and corporate credibility and reputation plummeting.
Around March, Yuhui and I had multiple meetings and continued to explore future development plans. We believe that the complex external and internal environment we face will not only cause the company's operations to fall into a difficult situation but also cause harm to individuals and the long-term development of the company. In order to ensure Yuhui has a better development stage, avoid business conflicts and public opinion entanglements, after repeated consultations, we finally decided to request the authorization of the board of directors to transfer 100% of the shares of Yuhui's colleague to Yuhui himself after the end of the fiscal year (May 31).
I did not stop supporting Yuhui's colleague because of their future independence. This includes matching government resources and commercial opportunities as before. However, I appear less frequently in front of Yuhui's colleague because whenever I do, there is a barrage of attacks. I also dare not appear in front of the camera for Dongfang Zhenxuan, as there will also be a barrage of attacks. As the founder of Dongfang Zhenxuan, supporting the company's development has become an extremely difficult thing. But even so, I have not given up. Yuhui's colleague needed a new office space, and everything from finding a location, negotiating a deal, to decorating the work area was done by the New Oriental Asset Professional Team. They worked day and night to complete the task on time in order to shorten the construction time. Now, Yuhui's colleague team has moved into the new office, and Yuhui and all the staff are very satisfied with the quality of the decoration and the environment. At the same time, I am also working hard to focus on the business development of Dongfang Zhenxuan, design business plans, pay attention to the physical and mental health of anchors, work hard to formulate the company's development strategy, maintain communication with the board of directors, and strive for long-term development of the company.
During the past six months, many shareholders, like me, have personally experienced and faced the huge uncertainty in the company's development. This uncertainty has not only brought about fluctuations in the company's business and stock prices but also caused anxiety among shareholders. I have also received many messages and suggestions from shareholders, most of which are friendly and tolerant. I express my heartfelt thanks and gratitude to all shareholders here. In such a strong situation of uncertainty, many shareholders have persisted in holding shares of Dongfang Zhenxuan, which is a great encouragement and trust for us. Due to reasons such as information security, I was unable to communicate and exchange with everyone in real-time, which resulted in some shareholders' disappointment and anger towards me. I will work harder in the future to invest more energy into the operation and management of Dongfang Zhenxuan, to thank everyone and strive to give everyone a better Dongfang Zhenxuan development.
At the same time, I also want to give everyone confidence: the vast number of Dongfang Zhenxuan netizens have been accompanying and trusting us in difficulties, this is the greatest support for the development of Dongfang Zhenxuan, here, I express my deep gratitude to all the netizens; Dongfang Zhenxuan's anchor team and management team is a group of outstanding young people, they unite, positive, and upward, accompanied the company through many stormy waves, I believe they will shine brighter on a bigger stage in the future; Dongfang Zhenxuan's self-operated products have become a phenomenon-level product. Selecting good things for the Chinese people is our unchanging goal, and I believe that our self-operated product system and membership system will only become better and better; in the future, Dongfang Zhenxuan and the New Oriental Group will further cooperate closely, and form a more perfect business cooperation model to promote faster and better development of both sides. As the major shareholder of Dongfang Zhenxuan, the New Oriental Group has an unshirkable responsibility for the healthy development of Dongfang Zhenxuan. At the same time, the company will continuously enhance shareholder value through share repurchases and other means.
I believe that after experiencing various storms and uncertainties, Dongfang Zhenxuan and Yuhui's colleague will definitely embark on a stable development path and make our due efforts and contributions to the prosperity and prosperity of the motherland, the spread of knowledge, and the promotion of culture. We know that once we embark on a journey, it will be full of hardships, but I believe that as long as there is poetry and a distant goal in our hearts, we will definitely be able to reach the stars and the sea. We will surely forge ahead through wind and rain, especially since we have the trust and encouragement of so many friends.
Yuhui's colleague is about to become independent. In order to express appreciation to Yuhui, in addition to paying all the promised benefits, I have sincerely requested the board of directors and the remuneration committee, obtained their agreement, and awarded Yuhui with all the net income rewards of Yuhui's colleague. At the same time, I have arranged for Yuhui to purchase the equity required by Yuhui's colleague in compliance with the regulations and provisions of the listed company and the company's articles of association. In order to ensure the normal operation of Yuhui's colleague's business, Dongfang Zhenxuan, with the approval of the board of directors, has delivered the developed information system to Yuhui's colleague for free use.
I would like to express my deepest gratitude to Yuhui again here! I deeply miss the time when Yuhui and I fought side by side, drank big bowls of alcohol, ate large pieces of meat, and sang loudly together. Although there is an age difference between us, we have always supported each other and met with honesty. I believe that in the future, we will still have beautiful times of cooperation. Here, I wish Yuhui's colleague a prosperous business and a long-lasting life. If Yuhui and his colleague need my help in the future, I will be happy to help.
Once again, I deeply thank all the shareholders and netizens who support us!
Editor/ping