LeTV continues to pursue merger

LeTV.com, a Beijing-based online video portal, said it will continue to pursue mergers with other players upon bumper profits to sharpen the company's competitive edge in the world's biggest Internet market.

LeTV said in its annual financial report late Wednesday that its net profit jumped 87.05 percent to 131 million yuan (20.69 million U.S. dollars) from a year earlier, an exception in the online video industry that has long been mired in debt.

The company generated a total revenue of 599 million yuan in 2011, up 151.22 percent year-on-year, it said.

LeTV attributed the gains to its rapid website-traffic and subscriber growth.

The company plans to expand its sales arms at provincial levels and vows to build a platform that entails the whole value chain including content producing, hardware and service.

It will keep seeking to acquire related companies, video contents and technology patents in a bid to slash costs and extend the value chain, the company said.

LeTV's announcement came after China's top two online video firms Youku and Tudou agreed to merge, which will create an industry leader with a market share exceeding 30 percent.

Mergers between online video firms will become a trend, said Liu Hong, COO of LeTV when commenting on the Youku-Tudou deal.

China's online video firms typically make a loss due to soaring costs of copyright purchases and meager revenue from advertising.

Both Tudou and Youku reported losses in 2011 before the merger deal.

Boosted by good profits, LeTV shares climbed 1.21 percent at the opening on Thursday before closing at 41.53 yuan, up 0.56 percent from a day earlier, outperforming the broader Shenzhen Component Index, which dipped 0.08 percent on falling foreign investment data.