"Star Agents" scheduled for 8.25. Can Kimi Pictures 'loss fate be rewritten?

At 8 p.m. on August 1,"Star Agents" official Weibo @ Movie Star Agents officially announced that "Star Agents" will be released in the mainland on August 25, and announced the movie's final poster and final trailer.

The mainland release time of the movie "Interstellar Agents: City of Thousands of Stars"(hereinafter referred to as "Interstellar Agents") has finally been confirmed. At 8 p.m. on August 1,"Star Agents" official Weibo @ Movie Star Agents officially announced that "Star Agents" will be released in the mainland on August 25, and announced the movie's final poster and final trailer.

With an investment of US$210 million, this movie is directed by Luc Besson, director of the classic movie "The Killer Is Not Too Cold" and co-starred by Dane DeHahn, Kara Devai, Rihanna, Wu Yifan, etc., and a science fiction movie by the world's three major special effects giants Vita Technology, Industrial Light and Magic and Rodeo FX may become the most exciting Hollywood blockbuster this summer.

At the same time,"Star Agents" also carries the transformation hope of Jimei Pictures, a company listed on the New Third Board: on the transformation from "film approval" to film production, Jimei Pictures has experienced box office failures in several films, which also resulted in a loss of 265 million yuan last year.

Can this film, which has invested as much as US$50 million and won exclusive distribution rights in China, allow Kimi Pictures to reverse its loss?

Transformation pains: From "film approval" to film production

, the New Third Board Research Institute data show that Jimei Pictures, established in 2008, started from assisting in the promotion and copyright sales of imported films, and gradually intervened in the investment and production of Chinese and foreign co-productions.

Jimei Pictures is most praised for its achievements in "buyout films"(commonly known as "approval films"). In 2014, films such as "Violent Street" and "Superbody" co-produced with Europa of France achieved good reputation and box office in the mainland of China. Kimi Pictures made a lot of money and gained fame in the industry.

Data from the New Third Board Research Institute shows that in 2014, Jimei Pictures 'revenue reached 154 million yuan, an increase of 218.4%; the net profit after deducting non-recurring gains and losses attributable to shareholders of the listed company was 52.7671 million yuan, an increase of 735.05%. The success of films such as "Hurricane Rescue 3","The Little Prince","Fairy Hostel 2" and "Flying Express: Battle to Restart" in 2015 further consolidated the development of Kimi Pictures. This year, Kimi Pictures 'revenue reached a record high of 193 million yuan. Although net profit attributable to shareholders of listed companies decreased by 31.55% compared with 2014, it still reached 36.3363 million yuan.

In fact, according to the reporter's understanding, in the domestic film industry, only two state-owned companies, China Film Co., Ltd. and Huaxia Film Company, have the qualification to distribute imported films. Jimei Pictures, which does not have distribution qualifications, can only sign agreements with China Film Corporation and Huaxia to participate in the distribution of imported films in China as "assisting in promotion" and share the distribution revenue. As the domestic film market continues to expand, Kimi Pictures 'profit share has become inevitable. As early as 2014, Kimi Films began to seek to transform from the downstream to the upstream of the industrial chain and directly participate in the investment and production of films.

On the road to its upstream transformation, Kimi Pictures chose to continue its in-depth cooperation with EuropaCorp (also referred to in this article: Europa) founded by famous director Luc Besson. At the end of September 2016, Kimi Pictures announced that 100% holding company FF Motion planned to spend 450 million yuan to acquire a 27.89% stake in EuropaCorp S.A, which is listed on the Euronext Paris. At the end of November of that year, Kimi Pictures issued another announcement announcing that the relevant investment funds had been paid. After the investment is completed, FF Motion, the holding company of Kimi Pictures, will become the second largest shareholder of EuropaCorp S.A., and Gao Jingdong, chairman of Kimi Pictures, will become a director of EuropaCorp S.A.

In 2016, in addition to independently developing, producing and distributing the domestic films "Magic Wheel" and "Super Express" as an executive producer, Kimi Pictures also jointly invested and distributed with EuropaCorp to produce and distribute the Chinese and foreign co-production "Warrior's Gate", participated in the investment and assisted in promoting the English film "Nine Lives" produced by EuropaCorp. All four films were released in domestic theaters.

However, as a popular cultural consumer product, the box office of movies depends on consumers 'subjective preferences and judgment, which also leads to high risks of film investment. The box office of the above-mentioned movies is not very good. According to China box office data, the cumulative box office of "Magic Wheel" is only 7.84 million yuan;"Super Express" 61.64 million yuan;"Warrior's Gate" 22.83 million yuan;"Nine Lives" is the highest box office at 112 million yuan.

In 2016, Kimi Pictures 'performance turned sharply, with revenue of 104 million yuan down 46.01% from the same period last year, and a loss of 265 million yuan. Kimei Pictures bluntly stated that its main control of the script development, investment production, promotion and distribution of "Magic Wheel","Warrior's Gate", and "Super Express" has significantly increased the company's investment costs, but the growth trend of the domestic film industry has slowed down and the box office of the movie fell short of expectations, becoming the main reason for the large loss in 2016.

Jimei Pictures has gone from profit to loss, coupled with the rational return of the New Third Board market and other reasons, its share price and market value have been declining since 2016. According to Oriental Fortune Choice data, on January 4, 2016, the closing price of Jimei Pictures on the first trading day of the year was 12.85 yuan, with a total market value of 3.823 billion yuan; by December 30, 2016, the last trading day of Jimei Pictures that year, its closing price was 5.80 yuan, leaving only 1.726 billion yuan in market value. On June 14 this year, five days after the release of Kimi Pictures '2016 annual report, its shares suffered a sharp drop when trading resumed. The lowest price was only 2 yuan. The closing price was finally 2.97 yuan, a drop of 34.15%. The turnover was 11.4591 million yuan, and the market value shrank from 1.342 billion yuan before the resumption of trading to 884 million yuan. Investors who participated in the first four fixed increases of Kimi Pictures were all locked up.

However, Kimi Pictures 'share price has since rebounded. Some New Third Board investors told reporters that they took advantage of the sharp drop to buy Kimi Pictures 'shares on the day of the resumption of trading, and then made a small profit.

On August 2, a small number of transactions occurred in Jimei Pictures 'shares, closing at 3.40 yuan, an increase of 1.19%. There are still 12 securities firms, including Orient Securities and Zhongtai Securities, providing market-making services to Kimi Pictures.

Big bet: Can the China market recover the North American box office failure?

Kimi Pictures 'determination on the road to transformation can be said to be very firm, and the large investment is also shocking.

Regarding the decline in performance and the collapse in market value, relevant people from Kimi Pictures previously stated in response to the interface news that from the moment it decided on the strategic transformation, Kimi Pictures had predicted the fluctuations that might occur during the process. The current decline in the company's short-term performance is a normal process of strategic transformation, and the transformation direction is correct. The investment value of Kimi Pictures will naturally be demonstrated in the future.

"Interstellar Agents" is undoubtedly a movie that Kimi Pictures has high hopes for.

It is understood that "Star Agents", which costs as much as US$210 million, is the highest-funded independent film project in history. It is also the international film with the highest amount of investment from China investors so far. Kimi Pictures has invested as US$50 million in it. The world's three top special effects companies, Vita Technology, Industrial Light and Magic, Rodeo FX, etc., contributed 2734 special effects shots to "Star Agents", and the special effects cost of the entire film reached US$130 million. The entire film production cost of US$210 million is equivalent to "burning" 180,000 yuan every second.

Gao Jingdong, chairman of Kimi Pictures, told the media that the reason why he spent huge sums of money to create this film was because "we believe that" Star Agents "is an epic science fiction work comparable to or surpassing" Avatar "in movie history."

However, the box office performance of "Star Agents" in the North American market was not as good as expected. The reporter learned that "Star Agents", which was released in North America on July 21, had a total box office of US$17.02 million in the first week (July 21 - 23), ranking fifth in the North American box office list. The best-performing "Dunkirk" box office was US$50.5 million in the current period. In addition,"Star Agents" earned US$6.5 million in 16 regions around the world, with Germany performing best, ranking second in the local box office with US$2.9 million.

Previously, Luc Besson told the media that "Star Agents" had recovered 96% of the cost through pre-sale copyrights. Europa actually had no actual financial risks, but more of the risks were reputation impact. "If this movie encounters Waterloo, we will lose the credibility of making this kind of movie. The risk is not about money, but more about people."

With the North American box office failure, China market, the world's second largest "ticket warehouse", is even more important to "Star Agents." In addition to the theme itself, Wu Yifan's participation in the film is undoubtedly an important guarantee for the box office of "Star Agents" in China. Although there is mixed domestic attitudes towards Wu Yifan's films, it is undeniable that there are indeed films that have achieved good box office results. For example,"You're Still Here" has a cumulative box office of 337 million yuan, setting a box office record for youth films in the same year; the box office of "Journey to the West", which starred in it, has exceeded 1.6 billion yuan. Luc Besson affirmed Wu Yifan's performance in "Interstellar Agents" and took the initiative to add a role to him.

Recently, Wu Yifan has attracted widespread attention for variety shows such as "Seventy-Two Floors of Strange Building" and "Hip-Hop in China", which is undoubtedly a positive for the release of "Interstellar Agents."

In terms of scheduling in the mainland,"Star Agents", which successfully entered the summer season, also faced competition from "Car Theft" and "Story of Racing 3" on August 25, but successfully avoided its biggest rivals in the North American market, such as "Dunkirk" and "Spider-Man: The Return of the Heroes" and "Rise of the Planet of the Apes 3".

For movie audiences, what exactly is "Star Agents"? We only need to wait another twenty days to see the result.

For the transformation of Kimi Pictures,"Interstellar Agents" may be just the beginning. It is understood that Kimei Pictures will also have films such as "Survival 24 Hours","Clone" and "Crazy Rally" in the future. In addition, Jimei Pictures owns more than 50 Chinese and foreign film copyrights and more than 10 Chinese and English scripts. The more than 600 films Europa will hand over to Jimei Pictures to operate in China are also strong backing for its development.

Whether Kimi Pictures can turn around and how its transformation will ultimately lead requires long-term observation.

Editor: Mary