The remake of "Ba Qing Zhuan" completed. Tmall Technology has paid Tang De 300 million yuan

"The Legend of Ba Qing" stills

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April 26, Liu Yanqiu, Tang De Film and Television released the "2019 Annual Performance Express Amendment Announcement", which explained the latest situation of the ill-fated "Zhuan of Ba Qing" and adjusted the 2019 annual results accordingly. On the evening of April 27, the GEM issued a letter of concern about this amendment.

On February 28, Tang De Film and Television released the "2019 Annual Performance Express". This announcement shows that after preliminary calculations by the company's financial department, in 2019, the company is expected to achieve total operating income of-319.6168 million yuan, a decrease of 691.1346 million yuan from the previous year; operating profit of-55.9686 million yuan, an increase of 828.9057 million yuan from the previous year; total profit of-53.7826 million yuan, an increase of 831.1563 million yuan from the previous year; Net profit attributable to shareholders of the parent company was-37.1188 million yuan, an increase of 890.3254 million yuan over the previous year.

The main financial data after this adjustment are as follows: In 2019, the company achieved total operating income of-114.8569 million yuan, a decrease of 486.3746 million yuan from the previous year; operating profit of-126.7953 million yuan, an increase of 758.079 million yuan from the previous year; total profit of-126.4098 million yuan, an increase of 758.5291 million yuan from the previous year; Net profit attributable to shareholders of the parent company was-106.7538 million yuan, an increase of 820.6905 million yuan over the previous year.

It is worth noting that this change in financial data is related to the newly signed "Supplementary Agreement 5 to the Purchase Agreement for TV Series Win World Information Network Communication Rights" between Tangde Film and Television and Zhejiang Tmall Technology Co., Ltd.(hereinafter referred to as Tmall Technology)<>.

In 2016,"Win the World" was launched with a total investment of 500 million yuan. It is known as "the largest single investment in Asian TV series production history." It is mainly invested and controlled by Tang De Film and Television, with an investment ratio of 70%. Under the trend of popular IP costume dramas at that time, the sales of this drama were very smooth. In November 2017, Tangde Film and Television announced that Jiangsu Satellite TV and Dragon TV had won the first round broadcast rights of "Win the World" at a price of 232.5 million yuan, totaling 465 million yuan; the online copyright was won by Youku for a single episode of 8 million yuan, totaling 490 million yuan.

But then the show encountered a series of storms. First, due to the influence of ancient orders,"Win the World" had to change its name to "Ba Qing Zhuan" and postpone its broadcast at the end of 2017. Later, in March 2018, Gao Yunxiang, the first male lead in "The Legend of Ba Qing", was arrested for sexually assaulting a woman in a hotel in Australia. The female lead Fan Bingbing fell into a tax storm in July. Due to the outbreak of controversy between the two leading actors,"The Legend of Ba Qing" can only be temporarily shelved.

According to Tang De Film and Television's 2018 annual report, Tang De's accounts receivable for "Ba Qing Zhuan" reached 599 million yuan, and its bad debt reserve reached 496.1 million yuan.

At the end of 2019, Fan Bingbing attended the ceremony

, but Tang De did not give up the project. In the first half of 2019, Tang De proposed two plans: one was to wait for the opportunity to release, and the other was to replace the leading actor. In the end, the company chose to replace the leading actor.

On October 8, 2019, Tangde Film and Television released the "Announcement on Signing Supplementary Agreements for Major Contracts", announcing that on September 30, 2019, it had signed the "<>Supplementary Agreement 2 to the Purchase Agreement on the Rights of TV Series Winning World Information Network Communication" with Tmall Technology. It was agreed that before December 31, the original shots of the main actors in the show would be revised to shots starred by front-line actors separately confirmed by Tmall Technology. The cost would exceed 60 million yuan, and this cost would be borne by Tangde.

According to the agreement, if Tang De still fails to complete the revision of "Win the World" as of March 31, 2020 and obtains approval from the radio and television authorities for broadcasting on satellite TV and the Internet, Tmall Technology has the right to terminate the agreement. Tang De needs to refund the paid fees within 10 working days and pay a penalty based on 30% of the total license fee for the show.

The agreement also stipulates that the broadcast method will be changed from the original "simultaneous broadcast on the Internet" to "independent broadcast by Tmall Technology." The license fee will still be settled at 7.5 million yuan per episode. The drama's distribution revenue in the mainland of China and overseas will be divided 50 - 50 between Tang De and Tmall Technology.

Before the originally agreed time limit arrived, on March 23, Tang De Film and Television issued an announcement stating that based on the actual revision of "Zhuan of Ba Qing", the lens modification period and the broadcast license period of "Zhuan of Ba Qing" would be extended respectively. Until April 30 and July 15, 2020.

On April 26, the latest agreement announced by Tang De once again provided new explanations on related matters such as production modifications, authorization rights and fee settlement. There are three specific points:

First, as of the day before the signing of the supplementary agreement, the show has obtained the "Domestic TV Series Distribution License"(76-episode version) issued by the Beijing City Press, Publication, Radio, Film and Television Bureau, and has delivered the show's qualified master media to Tmall Technology. However, due to the negative events of the show's main actors, the show has still been unable to obtain all broadcast licenses.

After the supplementary agreement takes effect, Tang De will no longer invest funds to modify and produce the play, and will no longer need to guarantee that the play will be broadcast on satellite channels and the Internet of TV stations in the mainland of China before July 15, 2020. However, the agreement requires Tang De to fully cooperate with Tmall Technology to complete all broadcast approvals and broadcast as soon as possible. "As requested by Tmall Technology, the company agreed to fully cooperate with Tmall Technology to modify the show at cost to meet Tmall Technology's broadcast requirements for the show, but the cost of the modification will be borne by Tmall Technology."

Second, the licensing fee for the show has been changed to: [7.5 million yuan * settlement episodes]-128 million yuan. The number of settled episodes is based on the number of licensed episodes and the actual number of broadcast episodes, whichever is less. If the final number of broadcast episodes of the show is less than 60 episodes, the settlement will be based on 60 episodes. If the number of broadcast episodes is between 60 and 64 episodes, the settlement will be based on the actual number of broadcast episodes, and if the number of broadcast episodes exceeds 64 episodes, the settlement will be based on 64 episodes. As of the day before the signing of the supplementary agreement, Tmall Technology has paid 302.8 million yuan to Tangde, and the remaining amount will be paid in full in one time after the show is first broadcast on the Tmall Technology Platform.

Third, Tmall Technology continues to authorize Tang De to act as the agency for the distribution of the play in TV stations in the mainland of China and in TV stations and networks overseas. The company should communicate with Tmall Technology in advance to confirm the distribution plan (including but not limited to the distribution region, broadcast platform, authorization fee, broadcast period and model, etc.) and conduct the distribution agency work according to the plan confirmed by Tmall Technology. The distribution revenue of the show in the mainland of China and overseas is still divided 50 - 50 between Donde and Tmall Technology.

On the evening of April 27, the GEM issued a letter of concern asking Tang De Film and Television to explain: the reasons and rationality of the two different accounting treatments for "Ba Qing Zhuan" in 2019, and whether the company will supplement the agreement when disclosing the 2019 performance forecast and express report fully consider the matters and explain whether the performance forecast is rigorous; The specific impact of "Ba Qing Zhuan" on major accounting statement items in each year from 2016 to the present, combined with the main terms of each agreement, explains the rationality of the adjustment of relevant accounting subjects and whether there is any intentional inter-temporal adjustment of income and profits.

Tangde Film and Television was once a film and television company characterized by deep binding of stars. In 2015, Tang De Film and Television entered the A-share market, and Fan Bingbing and Zhao Wei jointly rang the bell. At that time, Wu Hongliang, chairman of Tang De Film and Television, publicly stated that close ties with Fan Bingbing were impossible for ordinary film and television companies. Before the onset of the film and television winter, the biggest impact on the performance of Tangde Film and Television was the copyright dispute over Good Voice that lasted for more than two years, causing losses of up to 141 million yuan to the company. After that, Tang De Film and Television also encountered negative conditions such as failure to fixed-increase financing.

Of course, the biggest negative is the impact on the company caused by Fan Bingbing and the delay in airing "The Legend of Ba Qing". Today, Fan Bingbing has reduced her holdings and cashed out, benefiting more than 40 million yuan, but Tang De Film and Television's future is uncertain.

On April 10, Tangde Film and Television released its first-quarter performance forecast, predicting a net profit loss of 24 million yuan to 29 million yuan in the first quarter of 2020. The announcement explained that due to the impact of the epidemic, the resumption of work by the company and downstream units in the industrial chain has been generally delayed, making the overall sales progress of the company's TV drama projects lower than expected. At the same time, due to the cyclical impact of destocking in the film and television industry, and the general delay in the resumption of work by downstream units due to the epidemic, the company's accounts receivable recovery progress was lower than expected, resulting in an increase in credit impairment losses accrued in the current period compared with the same period last year. In addition, the company's non-recurring profit and loss amount in the first quarter of 2020 was approximately 90,000 yuan.

As of the close on April 27, Tangde Film and Television's share price was 4.94 yuan/share, down 3.33%, and the total market value was 2.069 billion yuan, which has shrunk significantly compared with the market value of 15 billion yuan during the peak period.