Great Wall Animation is set to grow and shrink, and wants to sign 500 channels to build an animation network

The deliberations of the shareholders 'meeting on December 23 attracted much attention from the outside world. What institutions and media are most concerned about is naturally the reasons for the growth and decline and its impact on the company's development. In order for the seven companies to effectively promote business coordination and achieve what they call the "two-line parallel strategy" internally, they also need to be funded, which makes Shen Xijie bluntly say that "there is a lot of pressure."

In the past two days, Shen Xijie, vice chairman of Great Wall Animation, has almost been breached by visiting organizations. "Three times a day." Shen Xijie told reporters,"Later they leave there will be a group to come." There was a hint of helplessness in his words.

One allocation of institutions, all pay attention to the company's reform and re-reform of the fixed-increase plan. On December 23, Great Wall Animation held a shareholders 'meeting and reviewed and approved the proposal of the company's non-public offering plan (three revised drafts). Shen Xijie was surrounded by participating institutions. This drama of fixed increase, which took more than a year, will eventually come to an end, and fixed increase and shrinking is also a foregone conclusion: from the original plan to issue no more than 380 million shares to ten issuance targets, it will be reduced to only major shareholder Great Wall Film and Television issued no more than 21.39 million shares and raised 120 million yuan in funds.

With fixed growth and shrinking, Great Wall Animation's thirst for funds can be imagined. The reporter noted that the previous purchase of 7 assets with 1 billion yuan in cash has caused Great Wall Animation's debt ratio to reach 78%, ranking first in the industry. In order for the seven companies to effectively promote business coordination and achieve what they call the "two-line parallel strategy" internally, they also need to be funded, which makes Shen Xijie bluntly say that "there is a lot of pressure."

The asset-liability ratio was as high as 78%

. The review of the shareholders 'meeting on December 23 attracted much attention from the outside world. What institutions and media are most concerned about is naturally the reasons for the growth and decline and its impact on the company's development. From November 2014, when the plan for non-public issuance of A shares was first launched, to December 8, 2015, it was three drafts. Among them, the number of issues issued, the objects issued and the amount of funds raised have all undergone tremendous changes.

It is worth noting that after the completion of this fixed increase, the major shareholder Great Wall Film and Television Group and its concerted action person Zhao Ruiyong controlled a total of 64767890 shares, accounting for 19.82% of the total shares after this issuance.

In the end, the increase was fixed at less than a fraction, which surprised even the management of Great Wall Animation, and this "accident" also disrupted Great Wall Animation's next series of plans. "Everything requires money." Shen Xijie spoke bluntly. In fact, the company mentioned in its first fixed increase plan that "the total amount of funds raised shall not exceed 2.134 billion yuan, and the net amount of funds raised after deducting issuance expenses will be used to supplement the company's working capital." It can be seen that Great Wall Animation is hungry for funds.

The reporter noted that as of September 30, 2015, the company's total assets were 1.496 billion yuan, total liabilities were 1.171 billion yuan, and the asset-liability ratio was 78.24%, far higher than the industry average of 26.03%. Regarding such a high debt ratio, Shen Xijie said that this was because he had previously acquired 7 assets in cash, costing a total of 1 billion yuan.

However, even if this fixed increase is passed, Great Wall Animation's asset-liability ratio will not change significantly, only from 78.24% to 72.43%.

In fact, the funding gap has affected the business development of Great Wall Animation, which is in transition. Great Wall Animation's previously acquired assets of 1 billion yuan are still in the process of integration. The company has always hoped to work hard to build the entire industry chain. "In terms of business collaboration, we implement a two-line parallel strategy. On the one hand, the acquired companies must maintain their original business lines, and on the other hand, create comprehensive development centers through listed companies." Shen Xijie told reporters. But when asked about the specific collaborative progress, Shen Xijie said that it needed funds to drive it.

"The first thing to do next year is to get the funds in place, and the second is to increase the shareholding ratio to 35%." Shen Xijie said.

It

has been a year since the acquisition of 7 animation assets with 1 billion yuan in cash to build the entire animation industry chain. The reporter found that the performance of several subsidiaries of Great Wall Animation is not very satisfactory.

According to the 2015 semi-annual report, Hangzhou Great Wall, a wholly-owned subsidiary, promised that its 2015 performance will reach 3 million yuan, and as of June 30, its net profit will be-2.33 million yuan; Dongfang Guolong, which promised that its 2015 full-year performance will reach 2.6 million yuan, achieved a net profit of only 780,000 yuan in the first half of the year.

Hongmeng Cartoon, which plays an important role in "original animation image design" in the Great Wall animation industry chain, has a net profit of-3.23 million yuan in the first half of the year. The reporter found that all trademarks and copyrights of its "Rainbow Cat Blue Rabbit" were fully transferred on July 18, at a price of 55 million yuan. This animation IP was once the "core asset and highlight" of Hongmeng Cartoon.

There is still one week left, and 2015 is coming to an end. Shen Xijie expressed optimism about whether the acquired assets could fulfill their performance commitments, and said that the focus of his concern was not here."It is not just for improving performance, but for integrating the industrial chain."

"What we collect is the cornerstone of the industry and is to lay the foundation." Shen Xijie emphasized that acquiring a company is not a short-term contribution to profits. Great Wall Animation hopes to create a "comprehensive entire industry chain platform."

According to Shen Xijie, Great Wall Animation's "innate attributes are close to production" and it builds the entire industrial chain from top to bottom. For Great Wall Animation, which currently does not have strong IP, it is necessary to enhance the influence of original IP.

On December 23, Shen Xijie revealed for the first time that "relevant agreements have been reached with more than 100 TV stations for the animation and animation collaboration. The goal is to have 500 TV stations fully rolled out in cities and counties to form a broadcast network and achieve a wide range of coverage."

"Cooperation with TV stations will be carried out in two ways. For example, we can broadcast original or acquired film sources for free on TV for two hours a day, of which we can advertise ourselves for 15 minutes. This is exchanging the film library for advertising; the other is to "cover the station", where we operate the entire channel. The two parties can then share the proceeds according to the agreement." Shen Xijie explained to reporters.

According to Shen Xijie, next, Great Wall Animation will build a free animation core brand. Currently, animation films are in the production stage, and animation sub-brands will also be launched, with plans to carry out at a pace of 5 per year. However, he also admitted that whether the above plan can be completed according to the timetable ultimately depends on whether the funds can be available.

Editor: vian