Oriental Selection
Company Profile:★Oriental Selection is a live streaming platform launched by New Oriental's subsidiary, New Oriental Online.In 1993, Yu Minhong founded the New Oriental School in Beijing.In 2001, New Oriental Education and Technology Group was established.In 2005, New Oriental launched its online education platform, New Oriental Online.2021, the " double reduction" policy was introduced at the end of the year, the business transformation of New Oriental was born. Double Reduction" policy was introduced, the end of the New Oriental business transformation, Oriental Selection was born. 2022 June, the Oriental Selection live broadcast burst into flames, the number of fans exceeded 20 million. 2023, the Oriental Selection account developed from 1 to 6, the number of fans exceeded 30 million.
Business Segment
★In the first half of fiscal year 2023 (2022.6.1-20221130), the company realized operating income of 2.080 billion yuan, an increase of 262.69%. Net income of 585 million yuan, an increase of 207.59% year-on-year.
★Among the company's various businesses, revenue from self-operated and live e-commerce business amounted to 1.766 billion yuan, revenue from university education was 295 million yuan, and finally revenue from institutional services was 19 million yuan.
★The total gross profit was $983 million, and the self-owned and live e-commerce business gross profit amounted to $750 million, or 76%.
Business introduction
★First of all, the business model, Oriental Selection is currently a live streaming platform, the business model for the sale of its own products to obtain profits, while selling third-party products, relying on the extraction of commissions to gain revenue. The sales channel is the account live room and the brand's own influence. Regarding the core data, for the six-month period ending November 30, 2022, the GMV was 4.8 billion yuan, the number of fans was 35.2 million, and the orders were 70.2 million orders.
★Products, the ability to select products is the core ability of retail brands. The products sold by Oriental Selection include self-managed and third-party products, with agricultural products accounting for the vast majority. As of the end of November 2022, the number of self-managed products was 65, including black pork roasted sausage, Wu Chang rice, blueberry syrup, etc., with a total revenue of more than 1 billion yuan. Stacked with commissions from third-party products, the live retail business totaled $1.766 billion in revenue, or 85% of the company's overall business.
★In terms of channels, Oriental Selection has begun to operate on a matrix. Currently*** there are six live accounts, and in addition to the core agricultural products, it has made a push into categories such as books, alcoholic beverages, daily necessities, and travel. five new accounts have a combined fan base of more than 8 million.
★Finally, the company also has a university education and institutional services business. university education mainly provides exam training to college students, with 315,000 paying users. Institutional services refers to providing technical support to universities, public **** libraries and other organizations.
★Brand, Oriental Selection can fire out of the circle, in addition to the brand endorsement of the New Oriental for many years, but more importantly, the direction of the channel brand. Selling mostly non-standard products, consumers are difficult to find high-quality goodies, and Oriental Selection has assumed this role.
Core Executives
Yu Minhong: Born in 1962, Yu Minhong received a bachelor's degree in English from Peking University in 1985. He is currently a non-executive director, chairman of the nomination committee and chairman of the board of directors of New Oriental Online.He founded New Oriental in 1993, and led New Oriental to list on the New York Stock Exchange in 2006.In 2018, he led his subsidiary New Oriental Online to list in Hong Kong.He founded Oriental Selection in 2021.He was ranked No. 789 on Hurun's list of the 100 richest people with a fortune of 8.2 billion yuan in 2022.
Sun Dongxu: born in 1985, received a bachelor's degree in engineering from Nankai University in 2007, majoring in computer science and technology, and is currently executive director and CEO of New Oriental Online.He served as a teacher in the foreign exam department of New Oriental Group from 2007 to 2008, assistant to the head of the foreign exam department of New Oriental School in Hefei from 2008 to 2009, and Xi'an in 2016. Principal and Northwest Regional President of New Oriental School, and Assistant Vice President of New Oriental China.Vice President of New Oriental China in 2019 and Chief Executive Officer of New Oriental Online in 2021.
Equity structure
★The company's equity structure is clear, the largest shareholder is New Oriental Education, lasting about 55.68%, and the real controller is the chairman Yu Minhong.
★Imagination structure investment behind Tencent, Tigerstep behind Yu Minhong's mother.
New Oriental Online Technology Holdings Limited: New Oriental Education and Technology Group: 55.68%. Imagine Architecture Investment: 9.04%. TigerstepDevelopments Limited: 2.72%. Sun Dongxu: 0.33%. Others: 32.23%.
Financial Indicators
★The company's revenues are significantly higher in FY2023, mainly due to better live e-commerce development.
★The company's gross margins are slightly lower compared to pre-2020 as the gross margins of live e-commerce are lower than the education business. Profits turnaround from FY2023.
★The company's debt ratio remained low at 27.76% in the first half of FY2023.
★The company's operating cash flow is negative till FY2022 and is expected to improve in FY2023.
Environmental Society and Governance
★Building a Green Home
★Emissions Management:Implementing online office, video conferencing. Digital manpower system, approval system, reduce disposable paper cups and plastic bottles consumption. To reduce greenhouse gas, waste emissions.
★Resource Saving:Use energy efficient lighting, rational use of air-conditioning, strengthen the management of water equipment in order to save water and electricity.
★In fiscal year 2022, the company's total greenhouse gas emissions of 1,034.5 tons, generating 35.7 tons of e-waste total electricity consumption of 1.78 million kWh, total water consumption of 7,773 tons.
Creating Social Value
★Industry:Evaluate and audit suppliers, the number of suppliers in FY2022 is 399.Meanwhile, we adopt differentiated strategies for products, such as focusing on the production and cultivation process of primary agricultural products, inspecting and testing factories for processed food, and focusing on whether food packaging is environmentally friendly and the logistics and transportation process is optimal.
★Education:We release English-related knowledge through public platforms, while conducting live English broadcasts and organizing reading activities.
★Rural:Since the start of broadcasting at the end of 2021, it has been helping to revitalize the countryside by live streaming with goods and helping to open markets for agricultural products.
★Public Welfare:In fiscal year 2022*** organized 216 public welfare activities, with 2,308 employee participations and 273 hours of employee participation in public welfare activities.
Employee Management
★Employee Attraction:As of the end of November 2022, New Oriental Online*** had 1,260 full-time employees and 410 part-time employees, with a payroll expense of 233 million yuan in the half-year.
★Growth and Development:We have established a training system for anchors, and developed training programs and promotion paths based on different anchor styles. It also establishes a dual-channel development system for management and professional.
★Health and safety: Purchase commercial medical insurance to reduce the financial burden of sick employees. We pay attention to physical and mental health, and provide benefits for newlyweds, newborns, birthdays and other dates.
Knowledge Refinement
Live E-commerce: is a type of shopping method, i.e., buying and selling goods through live broadcasting. Compared with the traditional shelf e-commerce, live e-commerce belongs to the interest e-commerce. Users mostly have an impromptu need to buy, rather than actively searching after they have a need.
GMV: Abbreviation for Gross Merchandise Volume. Generally applies to platform-based businesses. Enterprises earn commission revenue through this transaction volume. In the case of self-managed products, the platform itself becomes the merchant, and the amount credited to this GMV is all the platform's revenue.
Commission: This is also known as the commission on the sale of goods. Most of the revenue from the sale of goods by the host or creator comes from the commission of the goods, and the specific proportion depends on the category and brand.
Account matrix: is based on a single account, in the same platform or different platforms to establish a number of similar related accounts, thus forming a matrix, can be a business effect at a relatively low cost to greatly amplify.
Non-standard products: First of all, standard products refer to products that have clear specifications and models, and can be produced on a large scale industrially, such as cell phones, cars and so on. Non-standard products is naturally the opposite meaning, such as cell phones, cars and so on. Non-standard goods is naturally the opposite meaning, such as rice, cabbage, fruit, etc..
FY: Financial Year abbreviation, that is, the meaning of the fiscal year. In the United States, public companies in the fiscal year is mostly by their own development, the new Oriental a fiscal year is June to the end of May of the following year.
E-waste: also known as e-waste, which includes discarded cell phones, computers, etc. In fiscal year 2022, New Oriental's business was drastically downsized, generating more e-waste.