Yongle Film and Television's valuation has soared 9 times in three years, and its profit model has been questioned

According to multiple media reports, Yongle Film and Television has tried many times to enter the capital market, but all ended in failure. However, its valuation has increased more than ninefold in three years. Some analysts said that Yongle Film and Television, which should have occupied the entertainment space, sent all its screenwriters to write scripts for the capital market?

Original title: Yongle Film and Television has forgotten that its TV series lacks color and is busy writing an A-share shell script?

Editor's note: Recently, listed company Hongda New Materials announced that it plans to purchase Yongle Film and Television for 100% for 3.26 billion yuan. Data shows that Yongle Film and Television was established in 2004. The company has so far filmed, distributed and broadcast more than 20 TV series on the stars. Looking through Yongle Film and Television's TV drama business history, apart from 2006's "Fengming Qishan of the Fengshen List", 2012's "The Romance of the Sui and Tang Dynasties", and 2016's "Martial God Zhao Zilong", there are not many popular dramas that have win-win reviews.

According to multiple media reports, Yongle Film and Television has tried many times to enter the capital market, but all ended in failure. However, its valuation has increased more than ninefold in three years. Some analysts said that Yongle Film and Television, which should have occupied the entertainment space, sent all its screenwriters to write scripts for the capital market?

In addition, in this transaction plan, Yongle Film and Television's performance commitment to HTC Xincai has not yet been announced. The profitability of Yongle Film and Television has also attracted market attention. According to reports, Yongle Film and Television's net profit in 2013, 2014 and 2015 was 70 million yuan, 80 million yuan and 180 million yuan respectively. However, the main business income in 2015 included the expenses of "Martial God Zhao Zilong" that was sold last year. Therefore, it remains unknown whether Yongle Film and Television can achieve sustained profit growth.

Backdoor borrowing has been frustrated and its valuation has soared 9 times in three years

. According to interface reports, on the evening of May 16, Hongda Xincai announced that the company plans to replace all assets and liabilities as of the audit evaluation benchmark date (December 31, 2015) with the equivalent of the 100% equity of Yongle Film and Television held by 17 counterparties such as Cheng Lidong. The proposed asset price in the transaction is 810 million yuan, and the transaction price of the proposed assets is 3.26 billion yuan.

According to the Daily Economic News report, Yongle Film and Television's path to entering the capital market can be described as full of twists and turns. As early as 2013, Huayi Brothers planned to acquire a 51% stake in Yongle Film and Television, but in the end it failed. In April 2015, Yongle Film and Television prepared to borrow Kangqiang Electronics again. However, as Xu Xiang was investigated, the backdoor loan ultimately failed.

Although backdoor borrowing ended in failure, Yongle Film and Television's valuation increased a lot. When Yongle Film and Television was restructured as a whole in April 2013, its evaluation value as of November 2012 was only 310 million yuan.

In November 2013, when Huayi Brothers announced its intention to acquire a 51% stake in Yongle Film and Television for 397.8 million yuan, its valuation had increased to nearly 800 million yuan. When Yongle Film and Television prepared to borrow Kangqiang Electronics in 2015, its evaluation value soared to 2.781 billion yuan. In just three years, the valuation of Yongle Film and Television has increased by more than 9 times.

Data shows that Yongle Film and Television was established in 2004. It is a professional film and television organization integrating the planning, investment, shooting, production and distribution of film and television dramas. The legal representative is Cheng Lidong, who holds 50.82% equity of Yongle Film and Television. Yongle Film and Television has filmed, distributed and broadcast more than 20 TV series including "God of War","The Romance of Sui and Tang Dynasties","Dream Back to the Tang Dynasty" and "Jiao Yulu".

According to Entertainment Capital, looking through Yongle Film and Television's TV drama business history, it is not difficult to see that in addition to the 2006 "Fengming Qishan of the Fengshen List", the 2012 "Romance of the Sui and Tang Dynasties", and the 2016 "The Battle God Zhao Zilong", there are not many popular dramas with win-win reviews.

When searching for "Yongle Film and Television" on the Internet, all that comes up is financial news. From high-profile announcements of backdoor listings to changes and shell companies with iron-clad themes, such stories are repeated like the old-fashioned plots of TV dramas. It makes people wonder whether Yongle Film and Television, which should have occupied the entertainment space, sent all its screenwriters to write scripts for the capital market?

Yongle Film and Television's profitability is questioned

According to Entertainment Capital, according to financial data released in the draft transaction, Yongle Film and Television's unaudited operating income in 2013, 2014 and 2015 was 260 million yuan, 310 million yuan and 610 million yuan respectively. The net profits attributable to owners of the parent company were 70 million yuan, 80 million yuan and 180 million yuan respectively.

Although Yongle Film and Television's net profit increased significantly in 2015, it is worth noting that this year's "War God Zhao Zilong" was sold to Hunan Satellite TV last year, and 84 million yuan was included in the main business income in 2015. This is one of the important reasons why the net profit in 2015 was much higher than that in 2014.

However, without "War God Zhao Zilong" in 2016, it is still unknown whether Yongle Film and Television can achieve sustained profit growth. In this transaction plan, Yongle Film and Television's performance commitment to HTC Xincai has not yet been announced.

According to the interface report, according to the plan, the difference between the price of the assets to be placed and the price of the assets to be placed is 2.450 billion yuan. Hongda Xincai will issue shares and pay cash to all shareholders of Yongle Film and Television in accordance with the proportion of the equity held by each counterparty in Yongle Film and Television. purchase. At the same time, the company plans to raise matching funds from 10 specific investors including Lhasa Zhidu, Hangzhou Haorun Fund, and Junfeng Huayi Fund, with a total amount of no more than 1 billion yuan.

Prior to this transaction, the controlling shareholder of Hongda Xincai was Weilun Investment, and the actual controller was Zhu Dehong. After the transaction is completed, Hongda Xincai will hold 100% equity of Yongle Film and Television, and Cheng Lidong, the former largest shareholder of Yongle Film and Television, and his concerted actions will hold 23.03% equity of the listed company, becoming the new controlling shareholder and actual controller. Therefore, this transaction constitutes a backdoor listing.

According to the Beijing Business Daily, Hongda Xincai, which lost 60.0404 million yuan last year and continued to decline in operating income, said in its plan that the company is mainly engaged in the research, production and sales of high-temperature silicone rubber products. Due to the influence of macroeconomics and downstream industries, the main business is developing slowly, and it is urgent to find industries with stronger profitability and better development prospects as new business growth points.

Hongda New Materials was once investigated.

According to interface reports, in June 2015, Hongda New Materials released a major asset reorganization plan, planning to sell shell resources to Focus Media. The value of the assets placed was determined to be 45.7 billion yuan after negotiation. Two weeks later, Hongda Xincai announced that Zhu Dehong, the company's actual controller, was investigated by the China Securities Regulatory Commission. In September 2015, HTC New Materials announced the termination of the reorganization. Qixi Holdings, which had suspended trading for three months, issued an announcement on the same day, becoming a new backdoor target for Focus Media.

At that time, some media quoted the relevant person in charge of HTC New Materials as saying that after the company was investigated, the reorganization was suspended. If the company wanted to continue the reorganization, it would have to wait for the investigation results to come out, but Focus Media couldn't wait and began to find other shell resources.

In April 2016, Hongda New Materials, which was in the process of suspension, announced that it had received the "Notice of Closing the Case" from the China Securities Regulatory Commission: "In June 2015, I will file an investigation against Jiangsu Hongda New Materials Co., Ltd. for suspected information disclosure violations (Shenzhen Zhuan Li No. 2015-10). After trial, the illegal facts involved in the case of Jiangsu Hongda New Materials Co., Ltd. are not established, and I will decide to close the case."

Although it has no chance to become a backdoor target for Focus Media, which currently has a market value of 100 billion yuan, HTC New Materials, which lifted the mandatory delisting warning for Xinpai violations, also found a replacement as soon as possible.

However, Hongda Xincai was previously engaged in chemical manufacturing, and its plan to restructure Yongle Film and Television also included non-public issuance of shares to raise matching funds, which is suspected of being a "cross-border fixed increase" that has been rumored recently.

On the day when the reorganization plan was released, Hongda Xincai announced that the company would notify the resumption of stock trading after obtaining the post-event review results of the Shenzhen Stock Exchange. This transaction still needs to be approved by the company's shareholders 'meeting and approved by the China Securities Regulatory Commission. There is uncertainty whether the above approval or approval can be obtained and the final approval or approval time.

Editor: Nancy