On August 30, 2017, the phrase "The rain is coming to the building" was aptly used to describe LeTV's situation. Ever since the capital chain explosion last year, LeTV, once seen as a rising star, has been mired in controversy. Just recently, Foxconn abruptly pulled out of its partnership with LeTV. This sudden move, coupled with rumors of production halts, has brought LeTV's financial struggles into sharp focus.
Despite Sunac Financial's injection of funds and the subsequent takeover by Sun Hongbin, which aimed to stabilize operations and prioritize profitability, LeTV continues to face significant challenges. The company's semi-annual report revealed a staggering loss of 637 million yuan, marking a 323.91% year-on-year decline.
Back in 2013, Jia Yueting managed to convince Gou of Foxconn to become LeTV's exclusive TV OEM partner. The deal was so ironclad that Chairman Guo Jianming couldn't produce smart TVs for any other Chinese internet companies. How did Jia Yueting manage such a coup? It remains a mystery. What is clear is that LeTV needed Foxconn's support back then, given that its primary OEM clients included big names like Apple, Sony, Microsoft, and Amazon.
However, this partnership lasted less than four years before Foxconn distanced itself due to LeTV's financial woes. Rumors of LeTV halting production spread quickly, but representatives from LeTV told the Securities Daily that these claims were unfounded. While Foxconn has ceased providing OEM services, LeTV insists it has never fully stopped production, though output has indeed decreased.
Further insight came from informed sources revealing that LeTV hasn't cut ties with its foundries. Following Foxconn's exit, LeTV now collaborates with four factories: TPV, Yichang, TCL, and Zhongqiang. Negotiations are underway to bring in two or three additional foundries, potentially increasing their total to seven.
Since the financial crisis hit, LeTV has faced numerous setbacks. Jia Yueting stepped down, and the company underwent restructuring under a new leadership team. This reshuffle seemed like a strategic move, but the challenges remain daunting.
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