Huanrui Century made a bid of 3 billion yuan to shell ST Xingmei and many star shareholders appeared

ST Xingmei (000892) disclosed a fixed increase plan on the evening of the 1st. The company will issue shares in a non-public manner to purchase 100% equity of Huanrui Century held by all shareholders of Huanrui Century Film and Television Media Co., Ltd. After the transaction is completed, Huanrui Century will realize backdoor listing.

*ST Xingmei (000892) disclosed its fixed increase plan on the evening of September 1. The company will issue shares in a non-public manner to purchase 100% equity of Huanrui Century held by all shareholders of Huanrui Century Film and Television Media Co., Ltd. After the transaction is completed, Huanrui Century will achieve backdoor listing.

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. In 2014, 2013, and 2013, it achieved operating income of 294 million, 201 million, and 259 million yuan; it achieved net profits of 51.1067 million, 29.5052 million, and 70.3481 million yuan. Taking May 31, 2015 as the pre-evaluation benchmark date, the estimated value of 100% equity of Huanrui Century, the underlying asset of this reorganization, is 3 billion yuan, with an estimated value-added rate of 289.09%.

According to the plan, *ST Xingmei plans to issue no more than 392 million shares to all shareholders of Huanrui Century at a price of 7.66 yuan/share to purchase 100% equity of Huanrui Century. It will also raise supporting funds of no more than 1.53 billion yuan from Huanrui United, Hongdao Tianhua, Qingyou Qianhe and Qingyou Ruihe at a price of 8.72 yuan/share, which will be used for the underlying assets of Huanrui Century TV series and films. Investment, special effects post-production center and supplementary company working capital.

The transaction plan shows that the price of issuing shares to purchase 100% equity of Huanrui Century is 7.66 yuan/share, the estimated value of 100% equity of Huanrui Century is 3 billion yuan, and the number of shares issued does not exceed 391.6449 million shares. In terms of raising matching funds, the company plans to raise no more than 1.53 billion yuan in matching funds. The matching funds will not exceed 100% of the transaction price of the assets to be purchased. They will mainly be used for investment in the underlying assets of Huanrui Century TV series and films, special effects post-production center and supplement the company's working capital, and the proportion of supplementary working capital shall not exceed 30% of the net funds raised this time. The company plans to raise matching funds from Huanrui United, Hongdao Tianhua, Qingyou Qianhe and Qingyou Ruihe through a lock-in method. The issue price of the matching financing is determined to be 8.72 yuan/share, and the number of issued shares does not exceed 175.4587 million shares.

Data shows that Huanrui Century is one of the top film and television cultural companies among unlisted film and television companies in China. Its subsidiaries include film and television drama, performing arts brokerage, games, music and other business sectors. The company is located in Hengdian Film and Television Industry Zone, Zhejiang Province. The actual controllers are Chen Yuan and Zhong Junyan. They have produced and distributed "Palace Lock and Bead Curtain","Young Detective Di Renjie","The Price of Winning a Woman","Painted Skin 2","Tiny Times", etc. Huanrui Century's 2012, 2013 and 2014 financial statements show that operating income was 258.8143 million yuan, 200.9126 million yuan and 294.2049 million yuan respectively; net profit attributable to owners of the parent company was 70.3481 million yuan, 29.5052 million yuan and 51.1067 million yuan respectively. It is estimated that the net profit attributable to the parent company will be approximately 200 million yuan in 2015.

This reorganization can be said to have gone through a "two-step process." On April 27, 2015, Huanrui Century (Tianjin) Asset Management Partnership (Limited Partnership) controlled by Chen Yuan, the actual controller of Huanrui Century, signed a "Share Transfer Agreement" with Shanghai Xinyi, agreeing to transfer 57,938,783 shares of Xingmei Alliance held by Shanghai Xinyi, accounting for 14.00% of the total issued share capital of Xingmei Alliance. After the transfer of the agreement was completed, Tianjin Huanrui became the largest shareholder of the listed company. Subsequently, Chen Yuan said at the company's shareholders meeting in June that he would inject all Huanrui Century's film, television, games and other business segments into listed companies, basically realizing the overall listing of Huanrui Century. In the future, Huanrui Century will build a multi-chain pan-entertainment platform.

The company stated that through this transaction, it will inject into the investment, production and distribution of film and television dramas, performing arts brokerage, games and film and television peripheral derivative businesses with strong profitability and broad development prospects, realize the transformation of the listed company's main business and fundamentally improve the company's operating conditions, enhance the company's sustainable profitability and development potential, improve the company's asset quality and profitability, and maximize the interests of shareholders of the listed company. Through this transaction, Huanrui Century will be connected with the A-share capital market, which can further promote Huanrui Century's business development and enhance its comprehensive competitiveness and industry status in the industry. With the help of the capital market platform, Huanrui Century will broaden financing channels, provide impetus for subsequent development, and maximize the interests of shareholders of listed companies.

The announcement shows that many listed companies and film and television stars are among shareholders of Huanrui Century. Among them, Enlight Media and Palm Technology hold 4.67% and 4.17% shares respectively, as well as He Shengming, Yang Mi, Yang Lele, Du Chun, Jiang Hong, Liu Ying, Li Yifeng, Jia Nailiang, Sun Yaoqi and many other stars. Huanrui Century has thus become the film and television company The company with the largest star lineup. If this plan is approved and implemented smoothly, relevant companies and movie stars are expected to benefit.

The company stated that the transaction constituted a backdoor listing and a related party transaction. As the Shenzhen Stock Exchange needs to conduct a post-event review of relevant documents related to the company's major asset reorganization, the company's shares will continue to be suspended from September 2.

On the evening of the same day, Enlight Media (300251) also issued an announcement disclosing the news.

Click on the link to review relevant reports on Huanrui Century's backdoor listing

[Original Announcement]

*ST Xingmei: Issuing shares to purchase assets and raising matching funds and related party transaction plan

*ST Xingmei: New Times Securities Co., Ltd. on the company's issuance of shares to purchase assets and raising matching funds and related party transaction plan Verification opinions of independent financial advisers

Light Media: Announcement on the progress of foreign investment

Editor: vian