Huayi Brothers couldn't help but want to merge and acquire. Will the target be a theater company?

Huayi Brothers, which has had little reorganization actions in recent years, has begun to turn its attention to the M & A market. Although Huayi Brothers has not announced the specific acquisition target, judging from the preliminary content of the announcement, once it is implemented, it will become a blockbuster acquisition.

Huayi Brothers, which has had little reorganization actions in recent years, has begun to turn its attention to the M & A market. Although Huayi Brothers has not announced the specific acquisition target, judging from the preliminary content of the announcement, once it is implemented, it will become a blockbuster acquisition.

The reorganization announcement issued by Huayi Brothers, which has been suspended for a month, shows that it has been demonstrated that the reorganization has constituted a major asset reorganization. The counterparties of the transaction are some shareholders of the target company, and the type of counterparties is a third party.

The announcement did not disclose more substantive information, but in terms of the criteria that constitute a major asset reorganization, based on Huayi Brothers 'current size, the acquisition target must meet one of the following three criteria: total assets in the previous year exceeded 8.9 billion yuan; The previous year's revenue exceeded 1.9 billion yuan; net assets exceeded 4.9 billion yuan. Regardless of the above criteria, Huayi Brothers 'acquisition can be regarded as a big deal.

Before the soldiers and soldiers moved the grain and grass, they should take precedence. Huayi Brothers had already made sufficient preparations for this acquisition in the early stage. As early as the beginning of this year, the company began its capital layout. The quarterly and semi-annual reports released this year show that Huayi Brothers 'debt scale in each issue has expanded compared with the previous one. Data shows that its debt scale expanded from 7.164 billion yuan at the beginning of the year to 8.501 billion yuan in the interim report, and reached 9.507 billion yuan in the third quarter report. The asset-liability ratio also climbed from 40% at the beginning of the year to 48.4% in the third quarterly report.

The increase in debt is mainly reflected in the increase in the amount brought by Huayi Brothers 'short-term and ultra-short-term financing. After sorting it out, the reporter found that Huayi Brothers has borrowed about 4 billion yuan this year. Among them, the issuance of short-term and ultra-short-term financing bonds increased other current liabilities by approximately 1.7 billion yuan, and the issuance of medium-term notes increased bonds payable by approximately 2.2 billion yuan. In addition, Huayi Brothers also announced in September that it expected to issue 4 billion yuan in corporate bonds. Coupled with the approximately 900 million yuan of funds recovered from the sale of Palm Technology, Huayi Brothers obtained approximately 9 billion yuan in funds this year through stock sales and borrowing.

Huayi Brothers turned its energy to M & A expansion, a large part of which was due to the bottleneck in its own business development.

In the first three quarters of this year, Huayi Brothers achieved revenue of 2.151 billion yuan, a year-on-year increase of 7.96%, and achieved net profit of 622 million yuan, a year-on-year increase of 1.33%. This is the fourth consecutive reporting period that Huayi Brothers has shown single-digit growth in net profit. If deducting the investment income of 248 million yuan from the sale of its equity in Palm Technology, Huayi Brothers 'net profit after deducting non-recurring gains and losses is only 374 million yuan. In terms of movies and TV dramas, there is only one blockbuster movie "I am Not Pan Jinlian" that will be released soon. In addition, there are few good works.

Especially compared with Enlight Media, Huayi Brothers 'performance growth is much dimmer. Enlight Media achieved revenue of 1.187 billion yuan in the first three quarters, a year-on-year increase of 41.79%, and net profit after deducting non-recurring gains and losses was 466 million yuan, a year-on-year increase of 198%. This year, Enlight Media has invested in high-quality films such as "Mermaid" and "Big Fish Begonia", and the returns are considerable. A professional engaged in publicity work told reporters that years of publicity experience have given Enlight Media advantages that other companies do not have. Huayi Brothers, which started its own advertising brokerage business, is slightly weaker in this aspect. "Coupled with the fact that Enlight Media acquired the equity of Cat's Eye this year, this advantage is even more obvious." The person told reporters.

Compared with another media giant, Wanda Theater Line, Huayi Brothers also has obvious disadvantages. Wanda Theater Line, which started as a show, owns hundreds of theaters across the country, and screening is its biggest advantage. The inability to master the filming also caused Huayi to suffer greatly during this summer's match between "Rock Tibetan Mastiff" and "Big Fish Begonia". If we consider joining Wanda's Wuzhou issuance, Huayi Brothers will fall into a dangerous situation of being attacked from the front and back.

To break this dilemma, Huayi Brothers may determine its direction in the future to acquire screening channels. In the company's financial report for the first half of 2016, there is a sentence worth pondering: "The company will continue to develop new projects based on market conditions, and does not rule out negotiating cooperation with existing theater and theater companies."

However, some investors believe that Huayi Brothers will increase investment in movie towns. Wang Zhonglei, CEO of Huayi Brothers, mentioned at an event that Huayi will use its content advantages in the future to drive the development of Huayi's film and television towns. The Huayi Brothers Suzhou Film World, which has been confirmed, will open in July next year, including four outstanding films of Huayi Brothers-"If You Are the One","Assembly Number","Di Renjie" and "Tai Chi". In addition, the upcoming film towns in Changsha and Zhengzhou will be based on the films "Destiny" and "The Battle of Changsha" to develop film towns with the themes of Italy and Old Changsha.

These towns that are deeply integrated with content will be the core competitiveness that distinguishes Huayi Brothers from other media in the future.

Building a town requires a lot of money. According to Huayi Brothers 'semi-annual report, Huayi Construction Huayi Cinema (Suzhou) Co., Ltd. and Hainan Mission Hills Huayi Feng Xiaogang Cultural Tourism Industrial Co., Ltd. have invested 130 million yuan and 30 million yuan in cash. Compared with Disneyland's investment quota of US$5.5 billion (approximately 37.286 billion yuan), Huayi Brothers 'investments are only just beginning if they really want to build a real-life park. These subsequent projects that require continuous "burning money" require a large amount of money.

Huayi Brothers said in the announcement that the company will continue to suspend trading for no more than one month.

Editor: yvette