Chinese internet firm LeEco said it is talking with strategic investors and that trading in shares of LeEco's listed company, Leshi Internet Information and Technology Corp, will continue to be suspended.

LeEco said it has already recruited a financial adviser to conduct due diligence and has prepared documents related to further negotiations with strategic investors, according to a statement of the company.

The statement also said that in order to ensure the important issues go smoothly and to avoid fluctuations of the stock price, trading of its listed arm will continue to be halted on Shenzhen Stock Exchange.

Jia Yueting, CEO and founder of LeEco, said at the China Entrepreneurs Summit in Beijing on December 11, that its subsidiary LeTV Zhixin Electronic Technology (Tianjin) Co Ltd, which is responsible for LeEco's TV business, will finish a round of large-scale financing within one month. He added that this move will solve the company's cash flow crunch to a certain degree.

Its listed arm Leshi now holds 58.55 percent of the shares of LeTV Zhixin. The revenue of LeTV Zhixin reached 7.64 billion yuan ($1.1 billion), with a net loss of 56.87 million yuan in the first half of fiscal year 2016.

Zeng Qiang, the second-largest shareholder of Leshi and the founder of China Bridge Capital, said that because LeEco expanded too fast and the electric car costs the company a large sum of money, the company will pay a higher price for financing than ever before, according to a report from Southern Metropolis Daily.

If Jia doesn't change his concept, the capital chain of LeEco will still have problem, said Zeng, adding that LeEco doesn't lack money, but concentration and upgrading plans, said Zeng.

Shen Meng, director of Chanson & Co, a boutique investment bank, said: "What LeEco lacks is not the money, but the execution. Unless LeEco makes a significant reform in business and product, no strategic investors will enter into it," Shen said.

"It should cut down the businesses which burn cash and lack core competitiveness, shifting its focus to the R&D of key technologies of core products."

Shen added that smartphones, TVs and its content platform should be its core businesses. Apart from the price war, the company should enhance its technology and service to increase users' stickiness.

Jia said the firm's profits will also rise significantly next year, driven by the rapid growth of its video-streaming and TV businesses.

Trading in shares of Leshi was halted on Dec 6 at 35.80 yuan, having dropped 39 percent from about a year ago.

fanfeifei@chinadaily.com.cn