What kind of international journey did Huayi, a "10 Dream Factory Size", embark on after recruiting Ye Ning?

"Last year, Huayi's market value peaked at 170 billion yuan, but now it has dropped by more than half, reaching 80 billion yuan." Wang Zhongjun said that in his view, 170 billion yuan is too overvalued, but 80 billion yuan is a bit undervalued, but at least it is enough, equivalent to five dream factories. And his expectation is to use such a good home market in China to support an entertainment company with a scale of 10 DreamWorks. At the beginning of the seminar, Wang Zhongjun summarized the ups and downs of Huayi and his expectations for the future.

For the first time, Wang Zhongjun publicly talked about the changes Ye Ning will bring to Huayi: the change in this core figure means that this family business has ushered in the era of professional managers. When talking about "how to attract Ye Ning to join Huayi", Wang Zhongjun downplayed "How to attract him? Huayi is also a well-known film company recognized by the industry. I can't discuss the details. Anyway, people are here now." Why Ye Ning gave up "Wanda" and chose Huayi may be more of the core of Huayi's future internationalization. Different from Wanda's local tyco-style buying, buying, and buying, Wang Zhongjun said that Huayi's strategy is to start with talents.

"Beat the drum and spread the flowers" is better than recruiting talents to incubate a new production company in Hollywood

."I personally think buying a big company is one way, but it is not the best way. I still beat the drum and spread the flowers. It will be very expensive when it comes to you." Wang Zhongjun said that Huayi still does it from the perspective of talents.

In the past two years, as the mainland film market has developed at its peak, the domestic capital market has also been extremely active. A large number of film and television companies have chosen to invest capital and directly "buy, buy" models to rapidly expand their size and even enter the international market. However, Huayi Brothers, which has been active in the China market, has not gone smoothly on the road to internationalization:

in 2011, it agreed with Legendary Pictures to jointly invest in the joint venture company, Legendary East, but terminated the cooperation due to insufficient fundraising funds; In March 2014, Huayi announced that it would join other investors to invest US$120 million to US$150 million in Hollywood production company Studio 8. According to the agreement, Huayi Brothers, as one of the investors, will raise US$50 million. After several months of negotiations, the cooperation was terminated in June of the same year; in April 2015, Huayi Brothers and STX of the United States signed a cooperation agreement, stipulating that the two parties would jointly invest, shoot and distribute no less than 18 films within three years. This is the first time that China film companies have participated in Hollywood's complete industrial process system from investment, shooting to distribution. It is the first time that China film companies have enjoyed a global revenue share, and it is also the first time that China film companies have enjoyed the copyright of cooperative films based on their share.

In Wang Zhongjun's view, these cannot be regarded as true internationalization, and his ultimate vision is that in the American market, there can be a studio that can actually control, has its own products, product lines, and distribution channels, and represents China's capital. Now, Wang Zhongjun lives in Hollywood for two months every year and has come into contact with a large number of outstanding American producers and directors. "Huayi can provide them with the best resource platform and jointly incubate a new production company," Wang Zhongjun said.

"I think this is whether it is going with the current or inevitable. You already have the ability to use your brand value, your capital ability, and the ability to watch movies and watch film content to organize a very good film company developed in the United States." Another meaning of the introduction of Ye Ning may be Ye Ning's internationalization experience. Ye Ning has experienced the process of Wanda buying AMC and also served as a director of AMC. This is naturally an internationalization strategy that is very beneficial to Huayi.

Creating a "transfer platform" Huayi Tencent Entertainment aims at the U.S. market.

"Huayi Group" now has 6 listed companies. Huayi Chuangxing is the first new third board company incubated within Huayi. Wang Zhongjun said that "there will be more in the future." This is Huayi's strategy. In fact, it is to start a business independently and enjoy capital value." Recently,"China No. 9 Health" was renamed "Huayi Tencent Entertainment Company." Huayi holds 18.17% of the shares and becomes the largest shareholder, while Tencent holds 15.68%, ranking the second largest shareholder.

Judging from Wang Zhongjun's answer, the purchase of this Hong Kong-listed company is intended to leverage Hong Kong's international status and use the company as an international transit platform to more easily integrate overseas entertainment resources and projects. "Our biggest goal is the United States. We have paid attention to many companies in the negotiations. We have talked to Legend, but we failed." Wang Zhongjun said that Huayi is also a recruit on the road to internationalization. The important thing is how to find a way that suits China culture.

The "entertainment industry empire" after de-filming and de-familyization

In 2014, Huayi Brothers officially launched a three-in-one entertainment layout of "film and television entertainment","Internet entertainment", and "brand licensing and real-life entertainment". Subsequently, Huayi began to transform from a traditional film and television company to an entertainment company. It can be seen from the main business distribution in 2014 (as shown in the figure below) that the growth in operating income of the two major sectors of Internet entertainment, brand licensing and real-life entertainment showed a sharp increase trend. The gross profit margin is much higher than that of the traditional film and television entertainment sector.

According to the 2015 performance report, the brand licensing and real-life entertainment sectors have developed steadily. As of the end of 2015, the total number of signed projects has reached 13. Among the 30 billion yuan strategic cooperation with Ping An Bank, the brand licensing and real-life entertainment sector has the largest revenue. Whether it is capital needs, government cooperation experience and high-end customer resources, with Ping An Bank's full support, Huayi Brothers has previously announced the brand licensing and real-life entertainment business The layout plan of "20 implementation projects in 4 years" is expected to be completed ahead of schedule.

Editor: yvonne