Column category accounts for more than 70% of main business income. Energy dissemination and sustainable operation capabilities need to be tested

Relying on celebrity shareholders such as Chen Luyu and Zhou Libo, Energy Communication has developed from a small studio into a new third board cultural enterprise. Its main products are columns, documentaries, and brand service programs. In fact, the growth of energy transmission depends largely on Chen Luyu's influence.

Original title: How long can energy transmission still consume "Luyu"

? From the day when Wang Jianlin, Chairman of Wanda Group, was broadcast live broadcast to the upcoming launch of "I am the Speaker", Beijing Energy Film and Television Communication Co., Ltd.(hereinafter referred to as "energy transmission") seems to be developing well. But in fact, the company's reliance on Chen Luyu as a star member has not decreased in its more than ten years of development. Behind Chen Luyu's "friendship price" and "lively Lei Feng" support for energy transmission, the business integrity of energy transmission and the ability to continue operations are also in question.

Starting from "speaking", it relies heavily on "Luyu"

and relies on celebrity shareholders such as Chen Luyu and Zhou Libo. Energy Communication has developed from a small studio to a new third board cultural enterprise. Its main products are columns, documentaries, and brand service programs. In fact, the growth of energy transmission depends largely on Chen Luyu's influence.

As a director of Energy Communication, Chen Luyu is not only a star shareholder, but also the company's trump card. Previously, the main columns of Energy Communication,"A Date with Lu Yu" and "One Week Libo Show", were the main sources of the company's revenue. Data shows that in 2011, 2012 and 2013, the total revenue from the above two categories accounted for 49.77%, 33.34% and 19.05% of the company's main business income respectively, and the proportion decreased year by year. Subsequently, Energy Communication's newly developed columns such as "I am the Speaker","Super Speaker", and "I am Comedy Crazy" gradually became the main profit points.

The financial report shows that in 2014 and 2015, energy transmission revenue was 398 million yuan and 396 million yuan respectively, and net profit was 27.98 million yuan and 50.6021 million yuan respectively. Although the performance looks good, it is worth noting that Chen Luyu is still active as an important role in multiple major columns of energy dissemination. There are also data showing that energy communication column revenue accounts for more than 70% of the main business income. As a result, it is difficult for the energy transmission of the single "Luyu brand" to have the ability to continue to operate.

In October last year, at an event to introduce investors to the development history and planning of energy communication, Chen Luyu's hard work on the platform was dubbed "Live Lei Feng" by industry insiders. The act of using "friendship prices" to promote energy transmission has also led to speculation that "Chen Luyu has lowered his status to help energy."

According to the public transfer instructions, Energy Diffusion signed long-term cooperation agreements with Chen Luyu and Zhou Libo respectively, agreeing that the two will serve as the hosts of the "Luyu Date" and "One Week Libo Show" columns respectively. Among them, Chen Luyu's contract amount is 4000 yuan per episode, and the contract period is 2011-2016. The cooperation period will be automatically extended for five years without objection; while Zhou Libo's contract amount is 50,000 yuan per episode, with a term of 2011-2015.

From this perspective, Zhou Libo's labor remuneration is more than 10 times that of Chen Luyu. Some industry insiders analyzed that the labor fee for a 40-minute interview program is only 4000 yuan. It should be Chen Luyu who sacrificed personal interests for the company or converted the labor fee into company income. If we look at the more credible market price, Chen Luyu's labor fee for each program is 100,000 yuan, then about 160 issues of "Luyu Programs" will cost about 16 million yuan per year, and Energy Communication's net profit in 2014 is only 27.98 million yuan.

There

are many wealth-making myths similar to the fact that stars such as Zhao Wei and Fan Bingbing have increased by tens of millions of yuan due to Tang De Film and Television being favored by the capital market. Perhaps short-term labor costs are not the focus of Chen Luyu's attention. As the star shareholder behind the spread of energy, once the company's IOP is successful, its wealth-creating effect will be the ultimate goal of more star shareholders.

It was once expected by the outside world to be the "next Light Media", that is, to become the next film and television company to successfully go public from the production of TV programs, but the road to listing of Energy Communication has failed. In September 2015, the New Third Board was successfully listed without the energy spread of the IPO, but the appreciation space for the shares held by star shareholders Chen Luyu and Zhou Libo was greatly reduced.

According to the 2015 annual report, during the reporting period, Chen Luyu currently held 3.25 million shares of Energy Transmission, accounting for 4.1%, making him the fifth largest shareholder of the company. At the same time, well-known host Zhou Libo holds 2 million shares, accounting for 2.52%, and is also a big-name shareholder of the company. However, the number of shares held by the two has dropped compared with the ratios shown in the previous prospectus.

Although it has many star shareholders, according to the prospectus previously released by Energy Spread, the company's comprehensive gross profit margin has a significant downward trend year by year. However, the company still relies to a certain extent on the two programs "A Date with Lu Yu" and "One Week Libo Show". Some industry insiders believe that excessive reliance on major customers may also affect the company's IPO. At the same time, some brokerage analysts pointed out that the GEM Issuance Review Committee of the China Securities Regulatory Commission may be worried about the company's continued profitability.

According to Liu Gang, general manager of Shenzhen Venture Capital's Northern Region, the film and television company's business is unstable, but this will not be the main reason for failing the review. Although the business situation of Energy Communication has been growing in the past two years, the reasons behind the growth of the company's performance and whether the company's business can drive the company's performance to continue to grow and have the ability to continue operating are more critical factors.

The New Third Board lacks liquidity and has no liquidity premium. Mr. Wang, an investment banker, pointed out that "Energy Spread's share price is equivalent to 30% off the GEM. Although the valuation of the New Third Board Company is low, it may not have investment value."

The coexistence of scenery and risk,

Energy Communication currently owns well-known brands such as "A Date in Luyu","One Week Libo Show","Super Speaker", and "I am a Speaker", and has successfully gathered many artistic talents through the program to provide content for the program. Production has accumulated rich artistic talent resources. However, Energy Communication also pointed out that "the company's current business scale is expanding rapidly and its human resources are precious. In particular, a small number of core outstanding talents have contributed relatively high to the company's performance, and the company relies on such talents. If the company experiences a large number of brain drain or core talent drain, it will have a significant impact on the company's continuing operations."

From "A Date with Lu Yu" at the beginning of Energy Communication's establishment to the new column added after its influence weakened, it can be said that the company has always relied on Chen Luyu. In terms of future development strategies, Energy Communication will also maintain the content of old brands such as "Luyu Date", and rely on the "Luyu Date" public account and the "Yanwei" App to deeply participate in mobile Internet communication, give full play to the fan economic effect, and achieve revenue extension from branded programs. Moreover, in the future, it will not only be Wang Jianlin, but also join the live broadcast of "A Date with Lu Yu" may create multiple Internet celebrities. It can be seen that the "Luyu Brand" will still be the most important profitable way for energy transmission.

Wei Pengju, dean of the Institute of Culture and Economics at the Central University of Finance and Economics, said that stars are scarce resources and binding with companies can enhance certain competitiveness. However, stars use their own money-absorbing effect to establish a company or invest in a company, ignoring that the original artist appearance fees are directly converted into company income, and the company's profits will increase significantly. This part of the profit may be amplified in the capital market.

Zhang Jingcheng, director of the China Creative Industry Research Center, believes that some companies that are not very strong do not rule out cases of using the company's income transformed by stars to maliciously rewrite profitability in order to seek listing or capital in the announcements of major matters. Energy spread bet "Luyu" is a problem of the company's operation strategy, but special attention should be paid to how to deeply operate and tap celebrity value when the company's performance is not good.

The energy dissemination announcement also shows that the increase of program production costs such as labor costs, props and scenes of cast personnel leads to the decrease of gross profit rate of the company, the risk of fluctuation of net cash flow due to long return period, and the risk of review of works content existing in production and broadcasting separation. In addition, energy transmission also faces major competitors such as Light Media, Weizhong Communication, Oriental Fashion, Canxing Production, Huace Film and Television, Hualu Baina, New Culture, etc. In this way, the energy spread of betting on the "Luyu Brand" looks magnificent, but the risks behind it are quite large.

Editor: Nancy