Wanda Theater Line is expected to become the first market value of the small and medium-sized board, and future assets will continue to be injected

Wanda Cinema Line, which has been suspended for two and a half months, recently announced a trading plan to issue shares to purchase assets: the company plans to issue shares to 33 counterparties including Wanda Investment to purchase its 100% equity in Wanda Films and Television. The parties negotiated a tentative target asset transaction price of 37.204 billion yuan.

Original title: With a loss-making legendary film industry's Wanda Theater Line rushing to the first market value of the small and medium-sized board

in one year and four months, the market value has rushed to 200 billion yuan. The giant in the A-share market is always born very suddenly. This time, the company creating the myth is Wanda Cinema Line.

Wanda Cinema, which has been suspended for two and a half months, recently announced a trading plan to issue shares to purchase assets. The company plans to issue shares to 33 counterparties including Wanda Investment to purchase its 100% equity in Wanda Films and Television. The parties negotiated a tentative transaction price of the underlying assets at 37.204 billion yuan.

37.2 billion yuan, plus the valuation of Wanda Cinema Line before the suspension of trading of 94.3 billion yuan, it is conservatively estimated that the volume of Wanda Cinema Line after the resumption of trading will reach 150 billion yuan, and some brokerages even see a market value as high as 200 billion yuan. You know, there are only six companies in the small and medium-sized board with a market value of more than 100 billion yuan. Based on this calculation, Wanda Cinema Line is expected to become the first stock in the market value of the small and medium-sized board.

This time, the 33 trading parties are also shining brightly. In addition to the well-known Oceanwide Holdings, the reporter also discovered several hidden capital bosses: Those directly holding shares include Xinhualian Holdings with 1.6127%, Giant Investment with 1.3439%, and those indirectly holding shares include Lenovo Hony Investment, which holds 6.7197% through Beijing Hongchuang Investment Management Center (Limited Partnership), and Huang Xiaoming, who holds 0.268% through Tianjin Dingshi No. 1 Asset Management Partnership (Limited Partnership). In addition, Tasly Group, Shanghai Life Insurance, Jiangxi Copper, etc. are also hidden in the list. Such a strong trader escorted the transaction, which made investors look forward to this injection even more.

However, investors still focus more on Wanda Films, which is valued at 37.2 billion yuan. According to the transaction plan disclosure, the combined net assets of Wanda Films, the target company of this transaction, totaled 13.814 billion yuan, with an estimated value-added rate of approximately 171.46%. This value-added rate seems to be very convergent compared to the 6000% evaluation value-added rate of Stormwind Technology, which is inquired by the exchange.

In addition, Wanda Film and Television's cumulative committed net profit for 2016, 2017, and 2018 is no less than 5.098 billion yuan. This is a point worth noting. The reporter checked the performance commitments of media companies in recent years, and there is no "way to play" in the market for a single cumulative performance commitment over three years.

Stormwind Technology's acquisition of Caocao Bear Pictures has made a commitment to achieve no less than 100 million yuan in 2016, no less than 240 million yuan in cumulative net profit in 2016 and 2017, and no less than 436 million yuan in cumulative net profit in 2016, 2017 and 2018; When LeTV Pictures injected into LeTV, it made a commitment that the net profit after deducting non-recurring gains and losses attributable to shareholders of the parent company in 2016, 2017, and 2018 should not be less than 520 million yuan, 730 million yuan, and 1.04 billion yuan respectively; When Huayi Brothers acquired Feng Xiaogang's Dongyang Latin America, shareholders promised that the company's 2016 annual results will be the target company's audited after-tax net profit for that year will not be less than 100 million yuan. Starting from 2017, the performance target for each year will be the promised net profit target in the previous year. An increase of 15% based on the net profit target. Wanda Film and Television is the first to have a three-year cumulative performance commitment. Some investors told Interface News that Wanda Film and Television's most likely result from the uncertainty about the completion of its performance. The high probability of this uncertainty comes from Legendary Pictures, which is currently losing money.

The American film company, which was acquired by Wanda at the end of last year, achieved revenue of 2.63 billion yuan and 3.02 billion yuan in 2014 and 2015, but at the same time, net profit losses for the two years were 2.22 billion yuan and 3.62 billion yuan. Zhen Zhen Zheng lost everything he earned.

But for Wanda, it has indeed made a profit-from the perspective of secondary market valuation alone, it is almost impossible for Wuzhou Publishing or Wanda Pictures to obtain a valuation of 35 billion yuan.

If we make an incomplete comparison between Wanda Films after eliminating Legendary Pictures and LeTV Pictures, which is about to be injected into LeTV, then the value of Legendary Pictures will be even more prominent.

Le Pictures is valued at 9.8 billion yuan, with net assets of 790 million yuan and 2.1 billion yuan in 2014 and 2015 respectively, operating income of 760 million yuan and 1.14 billion yuan respectively, and net profit attributable to the parent company is a loss of 890 million yuan and a loss of 100 million yuan respectively. Looking at Wanda Film and Television before the merger, its net assets were liabilities of 16 million yuan and 680 million yuan respectively (net assets were negative in 2014), operating income was 380 million yuan and 560 million yuan respectively, and net profit was 61 million yuan and 130 million yuan respectively.

The reporter has previously made a simple comparison between Wanda and LeTV. Basically, the two are similar in financial scale. In addition, according to previous media reports, Wanda Film and Television's financing promotion letter mentioned that according to the original merger plan, Wanda Film and Television's valuation before the merger was approximately 16 billion yuan, and Qingdao Wanda Film and Television Investment Company, namely Legendary Pictures, was valued at approximately 19 billion yuan. Coupled with its financial scale that is closer to LeEco, Wanda Films and Television before the merger will be valued at a scale of 15 billion yuan. Of the calculated 37.2 billion yuan, 22.2 billion yuan was handed over to Legendary Pictures, which is still at a loss stage. This is not to question Legendary Pictures 'profitability, but from a valuation perspective, with a loss-making Legendary Pictures, Wanda Pictures' valuation has more than doubled that of LeTV Pictures. Obviously Legendary Pictures is more attractive in the primary market. This may be the real reason why Wanda completed the acquisition of Legendary Pictures in a short period of time.

What attracted investors 'attention was that Wuzhou Film Distribution Co., Ltd., a distributor that had previously received high attention, did not fully inject it. Data shows that the injected Wanda Film and Television only accounts for 44.5% of the shares issued by Wuzhou. Due to non-wholly owned ownership, the performance data of this private primary issuing company was not even disclosed in the transaction plan. It is speculated that the reason may be to facilitate subsequent injection in order to maximize valuation.

This means that it is very likely that Wanda Cinema will continue to inject assets in the future.

Wanda Cinema enjoys a P/E ratio of 70 times in the secondary market thanks to its asset-heavy offline cinema lines. Although the injection of Wanda Film and Television appears to open up three aspects of business in distribution, production, and channels, judging from the purpose of injecting assets, a high valuation is necessary. The high valuation of the media industry has become a consensus in the industry. Many primary market investment managers told reporters that the fundamental reason why the media industry only dares to wait and see but not dare to take action is the high valuation bubble.

Editor: rainshine