Xinke Materials abandons Hollywood company and hands with Huang Baiming to acquire a 29.9% stake in Tianma Film and Television

On the evening of December 20, Xinke Materials first announced the termination of the acquisition company Midnight Investments L. P. 80% of capital contribution equity. The reason for terminating the acquisition was that the other party had not provided the materials needed to respond to the Shanghai Stock Exchange's "Inquiry Letter", resulting in the postponement of the reply to the inquiry letter three consecutive times, and it was impossible to determine when the reply would be completed.

Original title: Xinke Materials issued successive announcements to abandon the purchase of Hollywood companies and join hands with "Happy Ghost" Huang Baiming

On the evening of December 20, Xinke Materials, which had been suspended for more than four months, issued 13 announcements in succession, successively disclosing a number of major measures of the company. Measures, terminating major asset restructuring, acquiring part of the equity of Hong Kong listed companies, integrating the company's copper processing business, appointing a new general manager, amending the company's articles of association... measures related to the company's development direction have overwhelmed the market and investors.

Termination of the acquisition of Hollywood Film and Television Company

On the evening of December 20, Xinke Materials first announced the termination of the acquisition of Midnight Investments L. P. 80% of capital contribution equity. The reason for terminating the acquisition was that the other party had not provided the materials needed to respond to the Shanghai Stock Exchange's "Inquiry Letter", resulting in the postponement of the reply to the inquiry letter three consecutive times, and it was impossible to determine when the reply would be completed.

A month ago, Xinke Materials announced a major asset acquisition plan to acquire an 80% equity interest in Hollywood production company Midnight Investments L.P. for 2.388 billion yuan in cash, or a premium of 627.89%. The acquisition funds came from the company's own funds and financing from third-party financial institutions. The plan has repeatedly mentioned that the company's asset film library includes more than 200 homemade, co-produced and agent sales films. It has rich IP resources and leads the production of "Dallas Buyers Club" and "Nowhere to Escape"."Dallas Buyers Club" won Oscars and Golden Globe and other awards. For a while, Xinke Materials 'film and television transformation road attracted more market attention.

A few days later, the Shanghai Stock Exchange issued an "inquiry letter" requiring the company to further explain relevant issues such as the operating conditions of the target company, evaluation and pricing, and specific arrangements for borrowing cash to acquire the target. The reporter called the company about relevant issues and hoped to get answers. Yan Lingling, a representative of Xinke Materials and Certification, said that the information she currently has is what was said in the announcement. If she wants to conduct further interviews, she is recommended to ask the company at the online explanation meeting for investors. Chairman and Secretary of the Board of Directors asked questions.

At the online investment meeting on the afternoon of December 21, Xinke Materials responded to the reporter's questions related to the termination of the acquisition.(Termination of the acquisition) was mainly caused by the other party's poor cooperation. There is no time plan for the information (required to respond to inquiries), but the company cannot wait forever, resulting in significant uncertainty in the reorganization. At the same time, Shen Junfeng, the company's board secretary, also said that the termination of the acquisition will not have a significant impact on the company.

In

a few minutes after the announcement of terminating the acquisition, Xinke Materials successively disclosed information such as changes to the company's articles of association, the resignation of the original general manager and the appointment of a new general manager, and the integration of the company's copper processing business.

Ma Jingzhong resigned as general manager (continued to serve as chairman of Xinke Materials Company), and Zhang Zhi, the company's director, succeeded him. Data shows that Zhang Zhi is a veritable person in the film and television industry. He has served as a director of Beijing Donghai Film and Television Culture Company and China Film Group No. 2 Company, and is currently a director of Beijing Dadu Xinyuan Film and Television Culture Company.

Xinke Materials 'revised articles of association have partially changed the company's business scope, and also changed the company's name from "Anhui Xinke New Materials Co., Ltd." to "Anhui Woertaiqi Film and Television Media Co., Ltd.".

At the investor briefing, some investors questioned the company's change of business scope,"It has just been changed some time ago, and now it is changing again. Is it because the company has no development strategic goals and is erratic?" Xinke Materials replied at the investor briefing that the company has adjusted its business scope in accordance with the development direction of copper processing and film and television, which is in line with the provisions of the company's articles of association.

In addition to the changes in the company's articles of association and general manager, Xinke Materials, which was originally mainly engaged in copper-based alloy and cable business, also plans to separate the copper processing business module and integrate all of its high-precision copper strip factory, copper strip branch, and wire and cable branch assets and liabilities into the newly established wholly-owned subsidiary Anhui Xinke Copper Co., Ltd. as in-kind investment. The reason for the integration is that "the company's dual main businesses are developing copper processing and film and television culture, and the existing management system is difficult to meet daily management needs. It is hoped that this will prevent internal resources from being effectively utilized due to the decentralization of production, procurement, and sales."

The acquisition of a 29.9% stake in Tianma Film and Television

ended on the evening of the 20th with a piece of heavy news. Xinke Materials plans to acquire a 29.9% stake in Tianma Film and Television, a Hong Kong-listed company. Xinke Materials stated that the company signed a "Purchase and Purchase Agreement" with Rongen Company, investing approximately HK$194 million to acquire 776 million shares of Tianma Film and Television held by Rongen Company, accounting for 29.9% of its total share capital. The purchase price was HK$0.25 per share, lower than its average trading price of HK$0.341 per share in the previous 30 trading days.

According to Tianma Film and Television's 2015/2016 annual report, as of June 30, 2016, the company's total revenue was approximately HK$446 million, an increase of approximately 187.5% compared with the same period last year. The company lost HK$72.6 million. Compared with a loss of approximately HK$215 million in the same period last year, the loss has dropped significantly. The main reason is the outstanding performance of "Ip Man 3" and the increase in operating income of Cinema City Langham Place in its first full financial year. During the year under review, the impairment loss on goodwill was reduced.

It is worth mentioning that there is also a famous Hong Kong filmmaker behind Tianma Film and Television, Huang Baiming. His Happy Ghost series and Family Happy Events series definitely occupy a place among Hong Kong comedy films.

Huang Baiming (named "Huang Baiming" in the announcement) is the chairman and executive director of Tianma Film and Television, and holds a controlling stake in Rongen Company, which entered into the transaction with Xinke Materials. After the acquisition is completed, Rong 'en's equity in Tianma Film and Television will be changed to approximately 16.33%. Huang Baiming's total equity will account for approximately 19.49% of the total share capital and will no longer be its controlling shareholder.

Regarding the practice of terminating the acquisition of Hollywood Film and Television Company and immediately turning to acquire a 29.9% stake in Tianma Film and Television, a Hong Kong-listed company, Ma Jingzhong, chairman of Xinke Materials, said that the company adheres to the strategic goal of transforming into the film and television cultural industry. This reorganization is independent. Foreign investment, the acquisition of Tianma Film and Television is in line with the company's long-term development goals. To the reporter,"Is this acquisition a financial investment or an intentional cooperation?" Chairman Ma Jingzhong replied that the acquisition of Tianma Film and Television was to consider the intention of jointly developing and cooperating together in the future.

Xinke Materials also stated at the investor briefing that the main reason for the acquisition of Tianma Film and Television is to have a strong synergy effect between Hong Kong film and television business and the mainland company's own film and television business in the future, forming a "1+ 1>2" effect., to achieve an effective allocation of resources.

Editor: yvette