Chinese internet firm LeEco said on Wednesday its 2016 revenue will more than double to exceed 50 billion yuan ($7.38 billion), as the firm works hard to ease investors’ concerns that its over-expansion efforts will affect the cash flow of its listed arm and drag down its long-term growth.
Jia Yueting, CEO and founder of LeEco, said the Beijing-based firm’s profit will also rise significantly next year, driven by the rapid growth of its video-streaming and TV business.
He made the comments at an investor conference in Beijing, after shares in its listed arm Leshi internet Information and Technology Corp declined in the past few days amid concerns over its financial health.
“We will address the capital issues in three to four months,” Jia said. The Chinese billionaire admitted on Sunday that LeEco’s global expansion has gone too far, putting big pressure on its limited capital and organizational capacities.
LeEco, founded in 2004, started as a video-streaming service provider akin to Netflix Inc, but it rapidly grew into a firm with a presence in smartphones, TVs, cloud computing, sports and electric cars.
On Wednesday, Leshi’s shares dropped 2.23 percent. Its market value has declined by about 10 billion yuan in the past six trading days.
Guo Xiangjun, who has invested about half of his disposable income into Leshi, said he is optimistic about the firm’s long-term growth, despite its current troubles.
“I don’t worry about its profitability. LeEco’s business spans different sectors which can support each other’s development. Jia has also hired the best global talents to run new business,” Guo said after attending the investor conference.
LeEco also promised on Wednesday that despite the financial pressure, it won’t channel investors’ money into its LeSEE electric car project, which is financially independent from the listed arm.
Join GhanaStar.com to receive daily email alerts of breaking news in Ghana. GhanaStar.com is your source for all Ghana News. Get the latest Ghana news, breaking news, sports, politics, entertainment and more about Ghana, Africa and beyond.
(Via: NewsGhana)
