Why did Yang Mi empty 500,000 shares to cash out before Huanrui Century borrowed 3 billion yuan?

On July 30 this year, Yang Mi transferred all 500,000 shares he held to Zhejiang Huanrui. Therefore, if Huanrui Century's last failed reorganization with Taiya shares caused Yang Mi to lose his easy fortune, then wouldn't it be a personal sacrifice to empty his equity on the eve of a shell loan be regarded as giving up the opportunity to "get rich suddenly"? It's even more regrettable?

On August 31, Focus Media, which was just one step away from listing, suddenly announced the replacement of Qixi Holdings, with a transaction price of 45.7 billion yuan. However, the listing plan that Focus Media and HTC New Materials had been planning for more than half a year fell through. Zhu Dehong, the latter's actual controller, was suspected of violating securities-related laws and regulations and received the "Investigation Notice" from the China Securities Regulatory Commission, causing the two parties to break up.

Like Focus Media, Huanrui Century has a troubled life. On September 1, *ST Xingmei disclosed its fixed increase plan. *ST Xingmei plans to issue no more than 392 million shares in a non-public manner at a price of 7.66 yuan/share to purchase their holdings from all shareholders of Huanrui Century such as Chen Yuan and Zhong Junyan. 100% equity in Huanrui Century. Through this transaction, Huanrui Century will restart its backdoor listing and land in A-shares.

Huanrui Century's current equity structure

The consideration for this transaction is 3 billion yuan, with an estimated value-added rate of 289.09%. It plans to issue no more than 175 million shares to Huanrui United, Hongdao Tianhua, Qingyou Qianhe, Qingyou Ruihe, etc. at a price of 8.72 yuan/share, and raise no more than 1.53 billion yuan of matching funds to be used for TV series and film investment, special effects post-production center and supplementary company working capital.

A year ago, Huanrui Century planned to land in A shares through backdoor Taiya shares, but it ended in failure.

I used to "play the edge" and currently have a loss of 4.3 million yuan in the game. Will this listing be successful? Regarding

the reasons for the termination of the previous reorganization, Taiya shares announced that the reorganization was terminated because "relevant parties have not yet reached an agreement on a detailed transaction plan for the reorganization." However, some senior people believe that this is likely to be due to the fact that the reorganization plan is suspected of "playing the edge", resulting in the non-recognition of the China Securities Regulatory Commission.

Because at that time, all parties to the transaction used a series of capital operations, a reorganization that was essentially a backdoor did not trigger the conditions for "backdoor listing", thus circumventing the review of the China Securities Regulatory Commission. There were even media comments that "the Taiya Stock Reorganization Case created a model case in which the A-share market evaded backdoor listing approval and achieved multiple purposes." However, in the end, the CSRC still failed to approve it.

However, this time Huanrui Century became a lot more obedient and honestly embarked on the path of backdoor listing. Although IPOs have been suspended, backdoor listings, like a small IPO, still face increasingly stringent scrutiny. So will Huanrui Century's road to listing continue miserably this time?

First of all, the current policy encourages mergers and reorganizations. Recently, four ministries and commissions including the China Securities Regulatory Commission, the Ministry of Finance, the State-owned Assets Supervision and Administration Commission, and the China Banking Regulatory Commission jointly issued the "Notice on Encouraging Mergers and Reorganizations, Cash Dividends and Share Repurchase of Listed Companies." The notice emphasized that we should further deepen reforms, streamline administration and delegate power through various methods, vigorously promote mergers and acquisitions of listed companies, actively encourage listed companies to pay cash dividends, support listed companies to repurchase shares, and improve the efficiency and vitality of the capital market.

The transaction amount of mergers and acquisitions from January to July this year has reached 87.5% of the whole year of 2014

. In addition, in terms of performance, Huanrui Century's main business is the production and distribution of film and television dramas, artist brokerage, games and other film and television derivative businesses. Its operating income in 2012, 2013 and 2014 was 259 million yuan, 200 million yuan and 294 million yuan respectively, and its net profit was 70.35 million yuan, 29.51 million yuan and 51.11 million yuan respectively.

Many TV dramas such as "Palace Lock Heart Jade","Palace Lock Pearl Curtain","Ancient Sword Qi Tan","Living Color and Fragrance" have been launched on first-line satellite TV such as Hunan Satellite TV, Zhejiang Satellite TV, and Jiangsu Satellite TV. At the same time, Huanrui Century has participated in the investment of many well-known film works, such as "Tiny Times 1 and 2" and "Painted Skin 2", all of which have achieved good results.

However, in terms of games, Century Huanrui suffered serious losses. Its online game revenue in 2013 and 2014 was-2.1982 million yuan and 812,500 yuan respectively, and its net profit was-2.1981 million yuan and-4.3087 million yuan respectively. However, Huanrui Games currently has four game development and operation teams, including Tianzhi Studio, Magic Dragon Studio, Wolong Team, and Qi Ling Studio. It has completed the development of popular IPs such as "Tomb Robbing Notes S","Revelation God and Devil", and "Living Color and Fragrance", among which "Revelation God and Devil" and "Living Color and Fragrance" were successfully launched.

At the same time, Huanrui Century has also won the favor of Enlight Media and Palm Technology. The two currently hold 4.17% and 4.67% of its shares respectively, and will also jointly sign the "Agreement on Issuing Shares to Purchase Assets" with Xingmei.

Therefore, Cao Haitao, a senior investor in the cultural and technological industry, believes that the success of Huanrui Century's backdoor listing is still relatively high.

Yang Mi cashed out on the eve of a backdoor loan, which is not necessarily regrettable.

Although the reorganization of Huanrui Century and Taiya Shares ended in failure, some star shareholders of Huanrui Century were also exposed at that time, attracting a lot of attention. As of now, Li Yifeng, Jia Nailiang, Du Chun and He Shengming hold 200,000 shares, 200,000 shares, 400,000 shares, and 1 million shares respectively, with shareholding ratios of 0.19%, 0.19%, 0.37%, and 0.93%, respectively.

According to the past situation in the A-share market, with the help of star shareholders, the company's share price usually performs well after backdoor listing. These star shareholders are also expected to realize their dream of wealth in the capital market through their shares.

However, Yang Mi, who had attracted much attention before, emptied his shares in Huanrui Century on the eve of this backdoor borrowing. The announcement shows that on July 30 this year, Yang Mi transferred all 500,000 shares held in his hand to Zhejiang Huanrui. Therefore, if Huanrui Century's last failed reorganization with Taiya shares caused Yang Mi to lose his easy fortune, then wouldn't it be a personal sacrifice to empty his equity on the eve of a shell loan be regarded as giving up the opportunity to "get rich suddenly"? It's even more regrettable?

However, on closer inspection, this may not necessarily be the case. Yang Mi's acting skills aside, but his business acumen is still very good. After all, in the entertainment industry, it is a fated rule that the late wave beats the late wave, so it is a long-term solution for stars to move behind the scenes of capital. There are countless examples of stars such as Zhao Wei and Ren Quan.

In October 2011, the registered capital of Huanrui Century increased from 50 million yuan to 80 million yuan. For the first time, new shareholders were introduced in the name of equity incentives. The company signed artists He Shengming, Du Chun, Yang Mi and other 25 people to participate in the subscription at a price of 1.2 yuan/share. Among them, Yang Mi purchased 300,000 shares. In June 2014, Yang Mi purchased another 200,000 shares at a price of 25.35 yuan/share.

However, unfortunately, on the evening of September 10, 2014, Taiya announced that its asset reorganization plan with Huanrui Century had been terminated, declaring that the listing feast in which Yang Mi and other stars participated would come to an end.

In July this year, Yang Mi transferred 500,000 shares in his hand to Zhejiang Huanrui, the second largest shareholder of Huanrui Century, at the purchase price, and cashed in 5.43 million yuan, with an average of 10.86 yuan/share.

The plan shows that after listing, Huanrui Century's total share capital is 980.9805 million shares, while the company's estimated value is 3 billion yuan, so the original valuation per share is about 3.05 yuan. It can be seen that Yang Mi's cash price is fully higher than this price has tripled. Therefore, some netizens said that the value-added rate of Huanrui Century is "too cheap."

I have to say that Yang Mi's choice to withdraw was also very smart. Liquidation is estimated to be the best choice in the capital market this year. In addition, even if an agreement is reached through the current backdoor, coupled with the review and lock-up time, until the final listing is successful, Yang Mi will have to wait until a few years later if he wants to withdraw.

Therefore, compared to investing, being your own boss may not be a good choice. On March 27, 2014, Yang Mi, two brokers Zhao Ruoyao and Zeng Jia jointly invested 3 million yuan to establish Haining Jiaxing Tianxia Film and Television Culture Co., Ltd., and signed a group of artists in the same year (some media called them "Power Corps"). On October 17, 2014, Huanrui Yang Mi Studio was renamed Jiaxing Yang Mi Studio. The plan was to work hard in the direction of Lin Xinru and Yu Zheng's studio. In the end, it was still to sign artists, work as an agency, and invest in film and television to make money.

So some people claimed that Yang Mi opened his own brokerage company, which resulted in a competitive relationship with Huanrui Century, which led to Yang Mi's transfer of equity. However, Cao Haitao revealed that this possibility is very small. Many artists have their own studios, and Yang Mi's identity as an investor should only consider increasing or decreasing his holdings from the perspective of return. At the same time, Huanrui Century's main business is not brokerage.

In addition, some netizens commented: It would definitely be beneficial for Yang Mi to leave Huanrui, although her fans said that she was Lei Feng and helped Huanrui bring Gu Jian to fame and make Li Yifeng famous. However, it now seems that many of the artists Yang Mi took away, such as Dilireba and Gao Weiguang, were also familiar with the ancient sword. For example, Yang Chengcheng, although he was taken away by Yang Mi, his drama in Huanrui was still broadcast, and the subsequent benefits were actually taken away by Yang Mi.

Dili Reba also starred in Yang Mi's first film producer "Micro Times". Today, Yang Mi has multiple identities such as producer, actor, and boss, investing in making dramas. At the same time, she also joined Liu Kaiwei's "Lingyu Co., Ltd." as a director, becoming the largest shareholder, holding 40% of the shares. However, none of this prevents her from continuing to shoot one film after another, with an annual output of 11 films. It is said that the price of Yang Mi's TV series is 600,000, and its endorsement and appearance fees are also the price of a first-line superstar. It was revealed that its advertising value is 3 million yuan, which has already tied Zhao Wei.

Editor: yvonne