The 21st Century Business Herald
In order to survey the "selection of Excellent Board in Chinese listed companies" hosted by the 21st Century Business Herald, the survey team visited one of the largest mobile phone distributors in China, Telling Holding (000829).
On October 20, Telling Holding announced its 200 million yuan investment in Meizu Technology. Meizu mobile phones are favorably received by many investors in the market. After investment from Alibaba amounting 590 million USD in 2015, Meizu returned with a reported annual sales volume of 20 million yuan with a growth rate of 350%. This cooperation between Telling Holding and Meizu indicates that, on one hand, Meizu makes a quicker move on the capital level and, on the other hand, Meizu is further expanding the offline channel.
For Telling Holding, why does it choose to invest in Meizu now? As told by Mr. Sun Hailong, Board Secretary of Telling Holding, on one hand, the proper investment this time would gain Telling more stabilized supply of goods from the upper stream and strengthen its strategic cooperation with the mobile phone manufacturer. On the other hand, Telling has planned for an industry-leading mobile phone distribution and retail service network with distribution covering over 80,000 stores from cities to villages, from T1 to T6 (urban downtowns to townships) and from online to offline. The future goal for Telling is to pay more efforts in expanding T4 and lower markets based on continued exploration to T1-T3 markets and to create an "online+offline" operation mode covering the whole channels in combination with the online platform Tianlian.com.
Sun Hailong said that in recent years, the mobile phone industry was under fierce competition. From booming development to today's further intensified industry reshuffle, the industry not only increased the pressure of mobile phone manufacturers but also made mobile phone distributors bear much pressure, too. Currently, the Company is under a phase of transformation and upgrade. Take the mobile phone distribution business of Telling as an example. The tactic adopted before was based on "huge crowds", which turned out to be inadaptable to the market changes along the development of times. Therefore, apart from changes on staffing organization, Telling also made adjustments on the product structure, operation cost and mode, etc. What's more, for the whole entity of Telling, the Company has gradually transformed to be an industrial internet service platform from a simple mobile phone distributor so as to initiate diversified development. At the same time of grasping the opportunity for transformation, upgrade and going online of the main business of mobile phones, the Company also centers on the strategic mode of "one platform for one network" to actively promote the industry chain layout of "1+N" and keep expanding new additional businesses.
Among the additional businesses, Telling Holding attracts much attention to its arrangements in the industry chain of the lottery industry. In December 2015, Telling Holding acquired 100% equity of Palm Commerce, totaling 1.46 billion yuan.
"This is rightly a proper acquisition for Telling," said Sun Hailong, who was still impressed with the "transaction" when talking about it. Many companies had strong intention to buy this scarce object during the bidding. The most important reason why Telling could succeed in the acquisition is that both parties shared the same views on the future development of the lottery industry and a common goal in terms of future business layout, which will also lay the foundation for Telling to become deeply engaged in the lottery industry in the future.
As told by Zheng Junbo, Investor Relations Manager of the Security Management Department of Telling Holding, there was only a small number of lottery buyers in China, accounting for about 20% of the total population, which is much fewer than the 60%-80% of developed countries. As the lottery industry embraces increasingly clear policies, it boasts great development potentials. Therefore, the Company is very optimistic about the prospect of the Chinese lottery industry.
Telling Holding has invested in five internet lottery companies via Tianliancai industrial investment platform the other day to seek for lottery types and game opportunities in the lottery industry chain and layout.
Besides the lottery business, Telling Holding also sees greatly enhanced liquidity in the mobile internet business including Opera browser and Tadu Literatures. In the future, different businesses under Telling Holding will develop in coordination to unfold a brand new situation for growth for the Company at the same time of making further contributions to the profits.