A High-Stakes Announcement from the Brink
In a move that has sent shockwaves through China’s financial circles, Leshi Internet, the once-high-flying tech giant now mired in 238 billion yuan of debt, has unveiled a bold plan to invest 1.8 billion yuan in the stock market. This audacious strategy, announced via a filing on the National Equities Exchange and Quotations (NEEQ) system, represents a desperate bid for profitability and a stark departure from its troubled past. The focus on Leshi Internet’s 1.8 billion yuan stock investment plan underscores the company’s attempt to navigate its colossal financial woes through market speculation, even as it explicitly distances itself from its controversial founder, Jia Yueting (贾跃亭). For global investors monitoring Chinese equity markets, this development offers a fascinating case study in corporate survival, risk management, and the evolving landscape of distressed assets in China.
Executive Summary: Critical Takeaways at a Glance
– Leshi Internet, carrying a monumental debt burden of 237.63 billion yuan against mere 18.55 billion yuan in assets, plans to deploy 1.8 billion yuan in自有资金 (own funds) for stock market investments, including新股认购 (new share subscriptions) on the Beijing Stock Exchange and secondary market trading.
– The detailed “stock trading plan” mandates conservative allocations: secondary market stock holdings capped at 30 million yuan, with at least 50% in bank stocks and 80% in CSI 300 index constituents, while 1.5 billion yuan is earmarked for new share subscriptions and government bond reverse repos.
– Despite连续亏损 (continuous losses) and negative equity exceeding -215 billion yuan, Leshi sustains operations through legacy copyright revenue, notably from the hit series “Empresses in the Palace,” and is pursuing diversification into sectors like robotics and fast-food franchising.
– Corporate governance has shifted decisively; voting rights from founder Jia Yueting (贾跃亭) were transferred in 2022, and the company now states it has no direct communication with him, marking a clean break from his influence.
– This high-risk maneuver poses significant questions about regulatory oversight, creditor implications, and whether such a strategy can offer any meaningful path to solvency for a company in Leshi’s precarious position.
Deconstructing the 1.8 Billion Yuan Stock Investment Blueprint
The公告 (announcement) released on December 2nd provides a rare glimpse into the tactical thinking of Leshi Internet’s management. At its core, Leshi Internet’s 1.8 billion yuan stock investment plan is framed as a means to “obtain investment returns” without hindering core business operations. This capital allocation strategy is highly structured, reflecting an awareness of the company’s fragile state and the need for measured risk-taking.
Investment Allocation and Strategic Guardrails
The plan delineates clear boundaries for its speculative foray. The total investment principal cannot exceed 1.8 billion yuan at any point, with funds allowed to be rolled over. Notably,投资收益 (investment proceeds) can be reinvested without counting against this ceiling. The breakdown is as follows:
– Secondary Market Equity Purchases: Limited to a maximum market value of 30 million yuan. Within this, the company must allocate no less than 50% to银行股 (bank stocks), perceived as stable dividend-payers, and no less than 80% to沪深300指数成份股 (CSI 300 index constituent stocks), ensuring a focus on large-cap, liquid companies. This conservative tilt within the equity portfolio suggests a desire to mitigate volatility.
– Beijing Stock Exchange新股认购 (New Share Subscriptions) and国债逆回购 (Government Bond Reverse Repos): These activities are allocated the lion’s share, with a combined minimum of 1.5 billion yuan. Participating in北交所 (Beijing Stock Exchange) IPOs could offer potential short-term gains from price disparities, while bond reverse repos provide a lower-risk avenue for parking liquidity and earning modest interest.
This structured approach indicates that Leshi Internet’s 1.8 billion yuan stock investment plan is not a blind gamble but a calculated, albeit risky, deployment of剩余资金 (remaining funds). The emphasis on new share subscriptions aligns with a common strategy in Chinese markets, where IPO allotments can yield quick returns.
The Daunting Financial Reality: A Mountain of Debt and Losses
To appreciate the audacity of Leshi Internet’s 1.8 billion yuan stock investment plan, one must first understand the depth of its financial abyss. The company’s balance sheet tells a story of relentless deterioration, with liabilities ballooning and equity plunging deep into negative territory.
Escalating Liabilities and Eroding Equity
Operational Losses and Sparse Revenue StreamsThe income statement is equally bleak. Revenue has dwindled, from 2.45 billion yuan in 2023 to 1.88 billion yuan in 2024, with a mere 1.15 billion yuan generated in the first nine months of 2025. Despite these modest revenues, the company continues to post significant net losses. However, these operational figures hide the lifeline that has allowed Leshi to persist: its ongoing business activities. The company has stated via social media that “under the pressure of huge debt, for eight years the company has never considered bankruptcy liquidation,” thanking creditors and maintaining cooperative business relationships.
The Survival Engine: How Leshi Internet Keeps the Lights On
Amidst the financial wreckage, Leshi Internet’s core operations somehow continue. This endurance is central to understanding why creditors have not forced liquidation and why management believes it has capital to invest.
Core Video and Copyright Business
Leshi’s primary revenue sources remain its legacy网络视频行业 (online video) operations. This includes付费会员业务 (paid membership services),短视频运营 (short video operations),版权业务 (copyright licensing), and电视剧发行收入 (TV series distribution income). In 2024, after inter-segment eliminations, the company reported 1.88 billion yuan in total revenue, with 2.87 billion yuan from internet services and 297.9 million yuan from film and TV distribution.
The “Empresses in the Palace” Lifeline
Strategic Diversification: Betting Beyond the CoreRecognizing the limitations of its legacy business, Leshi has embarked on several forays into new industries, signaling a desire to find growth avenues beyond video streaming.
The Aborted Burger King Franchise Venture
In April 2024, Leshi announced that a subsidiary planned to provide up to 1 billion yuan in financial assistance over three years to a汉堡王 (Burger King) franchisee,王道汉堡有限公司 (Beijing Wangdao Hamburger Co., Ltd.), calling it a “strategic cross-industry attempt” to快速进入快餐市场 (quickly enter the fast-food market). However,汉堡王（中国）投资有限公司 (Burger King (China) Investment Co., Ltd.) promptly clarified it had no direct partnership with Leshi, highlighting the reputational and execution challenges the company faces.
Foray into Robotics and IP Development
Severing Ties with the Past: The Jia Yueting FactorA critical subtext to all of Leshi’s recent moves is its concerted effort to distance itself from founder Jia Yueting (贾跃亭), whose ambitious and leveraged strategies are widely blamed for the company’s downfall.
Transfer of Voting Rights and Governance Overhaul
In June 2022, Jia Yueting (贾跃亭) transferred the voting rights for 600 million shares (15.04% of total equity) to致新云网企业管理（天津）有限公司 (Zhixin Yunwang Enterprise Management (Tianjin) Co., Ltd.), making it the new controlling shareholder. This move was intended to stabilize management and ensure business continuity. The effectiveness of this shift is now being tested by decisions like Leshi Internet’s 1.8 billion yuan stock investment plan.
“No Direct Contact”: A Symbolic and Practical Break
Market Implications and Investor PerspectivesThe announcement of Leshi Internet’s 1.8 billion yuan stock investment plan raises profound questions for the market. It is a high-wire act that balances potential reward against immense risk.
Regulatory Scrutiny and Creditor Considerations
Investment Implications: A Speculative Play with Extreme RiskFor sophisticated investors, Leshi represents a quintessential high-risk, potentially high-reward situation. The stock, trading under the ticker 400084.NQ, has a total market capitalization of approximately 1.2 billion yuan—a fraction of its debt. Any positive returns from the investment plan could provide a slight buffer against losses, but they are unlikely to make a dent in the overall debt. The primary investment thesis for traders might revolve around short-term volatility driven by news related to the plan’s execution or unexpected IPOs gains. However, the fundamental risks remain colossal. Investors must consider:
– The extreme leverage and negative equity of the company.
– The speculative nature of stock market investments, especially in current volatile conditions.
– The ongoing operational risks and competitive pressures in its core businesses.
– The potential for further regulatory or creditor interventions.
Synthesizing the Path Forward for a Fallen Titan
Leshi Internet’s 1.8 billion yuan stock investment plan is a testament to both the desperation and the stubborn resilience of a corporate entity fighting for survival. It highlights a stark reality in China’s capital markets: even companies buried under unprecedented debt can continue to operate and attempt strategic pivots, supported by lingering asset value and complex creditor negotiations. The plan itself is a microcosm of calculated risk—channeling limited capital into the markets with strict guidelines, while the company simultaneously cuts ties with its past and explores new commercial frontiers.
The key takeaway for global professionals is that Leshi’s saga is far from over. Its moves will serve as a barometer for how distressed assets are managed in China’s evolving financial ecosystem. Investors and analysts should monitor the execution of Leshi Internet’s 1.8 billion yuan stock investment plan closely, tracking its quarterly investment income, any regulatory filings, and communications with creditors. While the odds remain heavily stacked against a genuine turnaround, this latest chapter underscores that in the complex theatre of Chinese equities, even the most beleaguered players can still script surprising narratives. Engage with continuous due diligence, consult with seasoned financial advisors on high-risk opportunities, and stay abreast of regulatory developments that could impact similar distressed entities in the market.