Source: e Company Author: Wu Zhi.

The news of Dong Yuhui's resignation on the evening of July 25 led to a sharp drop in Hong Kong's stock price.$EAST BUY (01797.HK)$Today's stock price fell sharply, with an intraday drop of more than 27% and a closing drop of more than 23%.

On the afternoon of July 26 at 3:00 pm, Dongfang Zhuanxuan held an online shareholder communication meeting. Yu Minhong, the founder of New Oriental, and Yin Qiang, the executive CFO of East Buy, attended the meeting. Yu Minhong responded to questions at the meeting about whether Dong Yuhui had left due to insufficient treatment, and why the remaining 0.14 billion yuan in profits with Yuhui's colleague were distributed to Dong Yuhui, and other issues.

New Oriental will not participate in with Yuhui's colleague.

Yu Minhong first expressed regret for the separation of with Yuhui's colleague, but he said that facing the reality faced by the company, this result is indeed inevitable, and even I think this result is good for the company's development.

Yu Minhong said that in June 2022, Dong Yuhui ignited East Buy. There were many ups and downs until the end of 2023, but East Buy has essentially been in an upward trend. As a company with traffic-driven sales as its core, Dong Yuhui's value is very significant and important.

"So I used all my efforts, and after authorization from the board of directors, I gave Dong Yuhui a good guaranteed income and worked hard to keep him. In order to avoid conflicts and conflicts between the two sides, and to make the two sides play their respective advantages, at my proposal, with Yuhui's colleague was established." Yu Minhong said.

But Yu Minhong said that the two companies have indeed been severely interfered by the external environment. Recently, the network public opinion has always made the two companies uneasy, and the fans of the two platforms have also formed a confrontation. Yu Minhong said he tried to adjust in the early days, "but the water did not level off, and the fire finally burned on his head, and the business development of the company has also been greatly affected."

Due to public opinion, stock prices, and the pressure on business, Yu Minhong had to consider divesting from Bright Scholar. Starting from March of this year, after communicating with Dong Yuhui, he decided to transfer 100% of the equity of Bright Scholar to Dong Yuhui after the end of the financial quarter on May 31.

"Yuhui's independent development, I know he will do well. But at least the various problems and internal contradictions between the two companies, as well as the complexity of external forces, have been solved at once. For East Buy, we can now Pave the way for the development, layout, and reform of East Buy, without worrying about the great pressure and pain brought about by imbalances and public opinion on both sides." Yu Minhong said.

Yu Minhong also responded to the question of participating in shares. He said that some shareholders think that soon after with Yuhui's colleague became independent, New Oriental will participate in shares with Yuhui's colleague. "New Oriental now and in the future will not hold any shares in with Yuhui's colleague, and this situation does not exist."

Yu Minhong mentioned that the independence of with Yuhui's colleague this time is an experience. "In fact, I never allowed the establishment of independent studios at New Oriental. In the future, we will give anchors good treatment and incentives, and a good development platform. I hope to build anchors into an outstanding team that is united, fights together, and can hit wherever they want. But in the visible range, East Buy cannot have a certain anchor set up an independent platform and operate in this way like this time, because it will lead to certain personal interests and unpredictable results. The future development direction of our anchor is common development."

Yu Minhong: Dong Yuhui's treatment is reasonable.

Some shareholders asked about the reason for Dong Yuhui's resignation and whether it was due to treatment issues. Yu Minhong said that he believed that Dong Yuhui's treatment was reasonable and generous. According to the announcement of Dongfang Zhuanxuan, with Yuhui's colleague achieved a net profit of about 0.14 billion yuan from the end of last year to the end of June this year.

According to Yu Minhong's previous disclosure, Dong Yuhui can allocate half of the net profit of with Yuhui's colleague. Yu Minhong explained that the publicly announced net profit of 0.14 billion yuan in with Yuhui's colleague is actually the amount left after paying Dong Yuhui's income.

"That is to say, Yuhui allocated 50%, and the remaining 0.14 billion yuan was distributed to Yuhui's body, which has been placed in his personal account. In addition, Yuhui also has relatively good monthly compensation and the company grants him equity, so I believe that Yuhui at that time was quite grateful and felt that this treatment was already very good for him." Yu Minhong said.

Yu Minhong also explained why the 0.14 billion yuan profit of with Yuhui's colleague was distributed to Dong Yuhui. He said that this matter was proposed by him and decided after discussion by the board of directors, mainly for two reasons: one is that Dong Yuhui has made great contributions to the development of East Buy.

"So I think that giving him a reward when Yuhui is completely independent is expressing our goodwill, and we also hope to convey such goodwill to the society." Yu Minhong said.

Yu Minhong said that the second reason is that when talking about the guaranteed income with Dong Yuhui, the income included personal equity. However, when with Yuhui's colleague ends at the end of the financial year, the equity becomes meaningless, so it is also necessary to provide some cash subsidies.

"I think that by conveying such goodwill, we are not only helping Furui to develop better in the future, but also putting a perfect end to Yuhui's contribution in East Buy for more than two years. There is no personal motive on my part." Yu Minhong said.

There are rumors that Dong Yuhui's acquisition of the company's 76 million yuan actually comes from the 0.14 billion yuan profit with Furui. Yu Minhong said that this 0.14 billion yuan has nothing to do with the equity acquisition payment.

"Since we have separated, as the eldest brother, I think I should give Yuhui some goodwill. There is no use for us to leave this company, but if we do give it to him, it must be valuable, otherwise our shareholders will suffer. So I decided to use New Oriental's cooperation with Yuhui to help Yuhui pay this more than 70 million yuan."

"This money is ultimately paid by New Oriental through cooperation with Yuhui. It complies with all the regulations of New Oriental's listed companies in the United States. It does not infringe on the interests of East Buy, nor does it infringe on Yuhui's personal interests. Please be assured." Yu Minhong said.

Encourage East Buy and Furui anchors to cooperate friendly.

Yu Minhong emphasized the operation issues of East Buy next. He said that the initial development of East Buy comes from traffic economy. So far, one of East Buy's "feet" still relies on live broadcast and anchors to introduce various products and attract fans to increase the company's revenue.

"Some people worry that after Furui, other anchors will also have such problems in the future. I dare not guarantee that it will not happen, but after this round of turbulence, the existing anchors are relatively mature. I am personally in charge of the anchors now. I almost talk to them whenever I have time to manage their mentality and encourage them." Yu Minhong said.

Yu Minhong said that in the future, he will further urge the company to dig out more excellent anchors and promote the flow development of East Buy. "Many people have some concerns about the decline in the flow of East Buy, including the decline in fans. I think with the progressive effort in the future, we should be able to maintain stable growth in traffic."

In the future, in addition to relying on traffic, East Buy will also rely on products to promote the dissemination of culture and knowledge. He mentioned that through self-operated products and external high-quality products, the company will promote development and provide more abundant products for consumers. At the same time, attract more consumers through activities, matrix features, etc.

In the end of the exchange, Yu Minhong mentioned Dong Yuhui again. He said that although Furui has now become independent, he believes that Dong Yuhui's life ideals and what he wants to do will certainly be recognized by society. "I also appreciate what he does. He is still doing the gene of East Buy, promoting culture, disseminating knowledge, and promoting excellent products. After he became independent, he can do more."

"If he needs my help within a reasonable range, I will do my best to provide him with help and express my sincere thanks to him." Yu Minhong said.

"Today I wrote a letter to all the anchors, including Furui and East Buy anchors, encouraging them to continue friendly cooperation without affecting their personal friendly relationship. At the same time, I said that there is competition between the two companies, but I hope it is a friendly competition or even mutual support competition." Yu Minhong said.

Editor/Lambor