Nearly 50% of film and television companies on the New Third Board have doubled their profits and achieved "82" differentiation

From a performance perspective, about 18 film and television companies, including Kaixin Mahua, Energy Communication, Qingyu Media, Jimei Pictures, China Broadcasting Film and Television, Yineng Media, Longteng Film and Television, and Zhongrui Film and Television, are expected to enter the innovation level.

During the economic transition period, the profit growth of the cultural and entertainment sector was relatively excellent, so it attracted much attention from capital. This can be seen from the 2015 annual reports of 76 film and television companies on the New Third Board. According to statistics from reporters from the Shanghai Stock Exchange, about 80% of the film and television companies listed on the New Third Board in 2015 achieved profits, of which 35 had more than doubled their profits. From a performance perspective, about 18 film and television companies, including Kaixin Mahua, Energy Communication, Qingyu Media, Jimei Pictures, China Broadcasting Film and Television, Yineng Media, Longteng Film and Television, and Zhongrui Film and Television, are expected to enter the innovation level.

Statistics on the "August 2" differentiation of performance

show that among the 76 New Third Board film and television companies, 80% achieved profits in 2015. Among them, the net profit of 35 companies more than doubled year-on-year. Some of these companies achieved tens of times growth in 2015 due to their low profit base in 2014. There are also some companies whose performance has soared due to the sold well of their films. For example, Longteng Film and Television, which has attracted capital attention due to its participation in the release of the movie "Mermaid", has increased its net profit by more than 800%.

Happy Mahua has attracted much attention not long ago due to the fixed increase in sky-high prices. However, judging from the annual report data, the company's profits are good. The company's first film,"Charlotte Worry", grossed 1.44 billion yuan in box office at a cost of 50 million yuan alone, making a huge contribution to the company's profits. At the same time, its stage drama business performed more than 1200 times throughout the year, a year-on-year increase of 22.82%. In the end, the company achieved a net profit of 130 million yuan in 2015, a year-on-year increase of 234.15%. However, it remains to be seen whether this "skyrocketing" growth can continue. Kaixin Mahua achieved operating income of 60.4533 million yuan in the first quarter of 2016, a year-on-year increase of 21.08%; achieved net profit of 17.516 million yuan, a year-on-year increase of 21.34%.

Like Happy Mahua, Helicchen relied solely on films such as "Tiny Times 4" to make a profit of 93.8053 million yuan in 2015, a year-on-year increase of 158.71%. The company has also achieved "deep" bundling with writer and director Guo Jingming, who not only cooperates with the company on many works, but also holds nearly 10 million shares of the company.

Speaking of star shareholders, I have to mention Tangtang Film and Television, which officially launched on the New Third Board in April. This star company with shareholders such as Hu Ge, Liu Shishi, and Gao Yuanyuan has remarkable operating results. Tang Dynasty Film and Television's main business includes film and television drama production and distribution, derivative business, and artist brokerage business. Last year, the company launched a number of popular works such as "The Legend of the Female Doctor", achieving annual revenue of 290 million yuan, a year-on-year increase of 271.4%; The net profit was 88.7328 million yuan, a year-on-year increase of 344.6%.

In contrast, Hairun Pictures, which has star shareholders such as Liu Shishi, Sun Li, and Zhao Liying, has a bleak business. The company's revenue in 2015 reached 43.882 million yuan, a year-on-year increase of nearly 6 times, but the loss was 2.914 million yuan, an increase of 1.3036 million yuan over the previous year's loss. The company stated that with the expansion of the company's business scale, operating costs and various expenses have also increased significantly. After deducting non-recurring gains and losses, as well as provisions for bad debts and price declines, net profit fell during the reporting period.

The profit model needs to be optimized

. Reporters have sorted out that among the New Third Board film and television companies, Evergrande Culture has the highest net profit, with an amount of 689 million yuan, far exceeding the second place Kaixin Mahua (130 million yuan). The former's business covers six major business segments: theater operations, music copyright and performances, film and television investment and production, animation production and derivatives, film distribution, and performing arts brokerage, among which theater operations contribute more than half of the revenue.

However, from the perspective of net profit composition, it all relies on non-recurring gains and losses to support the facade. Evergrande Culture's annual operating income in 2015 was 202 million yuan, less than 30% of net profit. The net profit after deduction of non-profit was-68.34 million yuan, slightly narrower than the loss in 2014. A detailed review of the annual report found that Evergrande Culture's non-recurring gains and losses mainly came from investment. Among them, the income on disposal of financial assets measured at fair value and whose changes are included in current profits and losses reached 2.286 billion yuan, and the fair value changes (transfers) were 1.42 billion yuan. The net non-recurring gains and losses reached 757 million yuan.

Behind Evergrande Culture's beautiful performance list, what hides up is the dilemma of its main business. The company admitted in its annual report that if the company is unable to smoothly advance relevant work and make appropriate response measures based on changes in the external environment, it cannot be ruled out that each business segment of the company will continue to lose money.

In addition, the largest revenue is Dadi Cinema Line. The company just listed the new third board on April 25 and announced its 2015 annual report the next day. During the reporting period, Dadi Cinema achieved operating income of 1.559 billion yuan, a year-on-year increase of 55.35%, but net profit was only 25.2004 million yuan, and gross profit margin was as low as 5.03%. However, compared with the same period in 2014, the net profit of Dadi Cinema Line increased by 808%, and the gross profit margin also increased slightly.

As of the end of last year, Dadi Cinema had 596 theaters, all of which were franchised theaters, ranking among the top in the country. However, the adhesion between franchised theaters and theaters is low, and the cooperative relationship is prone to fluctuations, which in turn affects the box office growth of theaters. Therefore, Dadi Cinema Line plans to further increase its asset connection with theaters through capital operation and other means to participate in or acquire high-quality cinemas. Compared with Wanda Theater Line listed on the small and medium-sized board, the operating quality of Dadi Theater Line is significantly lower. Last year, Wanda Cinema achieved operating income of 8 billion yuan, net profit of 1.186 billion yuan, and net profit margin of 14.82%. Therefore, accelerating the extension of the film and television production and distribution business upstream of the film industry chain and enriching the profit model has become an important direction for Dadi Cinema to solve the current inefficient operation.

The individual market value is relatively small

. In fact, compared with the main board companies, the new third board film and television companies generally have a small market value. After sorting out, it was found that 80% of the 76 companies were transferred by agreement, and 41 of them were difficult to estimate their latest market value due to the current transaction price of zero. Among the companies with transaction prices, the current market value of Kaixin Mahua is relatively large, at 5.02 billion yuan. However, compared with the market value of Huayi Brothers on the main board of nearly 40 billion yuan, the valuations of the two are far cry.

In addition, 14 companies including Jimei Pictures, Energy Communication, Qingyu Media, and Baiyi Media are market-making transfers. The New Third Board market-making system is conducive to enhancing market liquidity. At the same time, the two-way quotation process is also conducive to reflecting more reasonable stock prices. Data shows that the market values of the above-mentioned 14 companies range from 60 million yuan to 2.5 billion yuan. Among them, the market values of Kimi Pictures, Qingyu Media and Energy Communication are relatively large, with 2.452 billion yuan, 1.55 billion yuan, and 1.055 billion yuan respectively. "Compared with film and television giants on the GEM such as Enlight Media and Huayi Brothers, which often have a market value of tens of billions, the market value of these New Third Board film and television companies is relatively small, and those with popular movie stars seem to have a lot of room for development." Some investors said so.

It is worth mentioning that among the above-mentioned New Third Board film and television companies, if we only analyze revenue scale and profit data, they include Kaixin Mahua, Energy Communication, Qingyu Media, Jimei Pictures, China Broadcasting Film and Television, Yineng Media, Longteng Film and Television, About 18 companies, including Zhongrui Film and Television, are expected to enter the innovation level.

Editor: yvonne