Xingmei United's 2015 results achieved a pre-expected net profit of 1.3 million yuan, turning losses into profits through its marketing business

Xingmei Joint announcement shows that in the second half of last year, through the establishment of a wholly-owned subsidiary Huanrui Century (Beijing) Marketing Planning Co., Ltd., relying on the business opportunities transferred by major shareholders, the resources of the actual controller in the film and television culture industry, and its own efforts, it began to transform into the cultural industry, expanded new profit points, and enabled the operating income obtained in 2015 to fully cover costs and expenses, achieving a turnaround into profit.

Xingmei United (hereinafter referred to as "*ST Xingmei") released its 2015 results forecast on the 25th. The company achieved operating income of 13.43 million yuan and net profit of 1.3 million yuan throughout the year, and the risk of delisting was temporarily resolved.

Regarding the reasons for turning losses into profits, *ST Xingmei bluntly stated that in the second half of last year, through the establishment of a wholly-owned subsidiary Huanrui Century (Beijing) Marketing Planning Co., Ltd., relying on the business opportunities transferred by major shareholders and the actual controllers in the film and television culture industry. Resources, coupled with its own efforts, it began to transform into the cultural industry, expanded new profit points, and enabled the operating income obtained in 2015 to fully cover costs and expenses, achieving a turnaround into profits.

On the evening of September 22, 2015, *ST Xingmei, which had been suspended for five months, announced a reorganization plan. It planned to increase approximately 392 million shares to all 60 shareholders of Huanrui Century Film and Television Media Co., Ltd. at a price of 7.66 yuan/share. The estimated value of the underlying assets was 3 billion yuan; At the same time, the non-public issuance of approximately 175 million shares of shares from Huanrui United, Hongdao Tianhua, Qingyou Qianhe and Qingyou Ruihe at a price of 8.72 yuan/share, raising matching funds of no more than 1.53 billion yuan, which will be used for Huanrui Century TV series and movies. Investment, special effects post-production center and supplementary working capital.

After the completion of this major asset reorganization, Chen Yuan and Zhong Junyan will become the controlling shareholders and actual controllers of *ST Xingmei. The company's total share capital will increase from approximately 414 million shares to 981 million shares. The main business will become the production and distribution of film and television dramas, artist brokerage, games and film and television peripheral derivative businesses.

All shareholders of Huanrui Century promise that if the reorganization is completed in 2015, the net profit attributable to the parent company in the company's consolidated statements in 2015, 2016 and 2017 will be no less than 158 million yuan, 258 million yuan, and 331 million yuan respectively., totaling approximately 747 million yuan; the net profit after deduction of non-profit shall not be less than 139 million yuan, 241 million yuan, and 308 million yuan respectively. If the reorganization is completed in 2016, as described above, the additional committed net profit and non-net profit for 2018 will be approximately 422 million yuan and 393 million yuan respectively in 2016 and 2017.

*ST Xingmei reminded that the audit, evaluation and other work involved in this material asset reorganization have been basically completed, and the adjustment of performance compensation matters in accordance with relevant requirements of the China Securities Regulatory Commission has been completed. The company has not found any circumstances that may lead to the company's board of directors or counterparty cancellation or termination of this material asset reorganization. However, it is still impossible to judge whether the relevant intermediaries can submit the reorganization draft and other relevant documents to the company's board of directors for review before March 23, 2016. There are still significant uncertainties and significant risks of failure in this major asset reorganization. As a well-known film and television company in China, Huanrui Century is mainly engaged in the investment, production and distribution of film and television dramas, acting brokerage, games and film and television peripheral derivative business.

Among the shareholders of Huanrui Century, they include well-known film and television companies such as Palm Technology and Light Media, as well as celebrity artists such as Jia Nailiang, Du Chun and Li Yifeng.

Hand in hand with Huanrui Century to create a pan-entertainment and cultural platform

. Huanrui Century Film and Television Media Co., Ltd. was established in 2006 as Zhejiang Sanhe Film and Television Culture Co., Ltd. Huanrui Century is committed to TV and film investment, production and distribution, artist brokerage, games and related derivative businesses. After years of development, Huanrui Century has invested in a total of 27 TV series + online dramas as of May 2015, and has established a complete multi-level script procurement network with sufficient copyright reserves; it has also established cooperative relationships with Mingdao Studio, Du Chun Studio, Jia Nailiang Studio, Lin Xinru Studio, etc., which is conducive to obtaining priority for upstream content IP. The company announcement pointed out that among all 60 shareholders, in addition to well-known film and television companies such as Palm Technology and Light Media, there are also 34 natural person shareholders such as popular artists Li Yifeng, Jia Nailiang, and Du Chun, and famous screenwriter Liang Zhenhua. The cooperative artists hold a total of 1.98% of the shares. The company adopts the principle of absorbing well-known film and television companies, popular artists and core personnel into the company's shareholder positions, creating convergence of interests, improving internal stability, and reducing the pressure of competition from the same industry. It is conducive to the sustainable development of the company and is in line with the company's development concepts of "big star","big production" and "big cooperation".

On the channel side, we have established good cooperative relationships with first-line satellite TV such as Hunan Satellite TV, Zhejiang Satellite TV, and Jiangsu Satellite TV, as well as online video new media companies such as iQiyi, Tencent, and Sohu. Huanrui Century has super IPs such as "Zhu Xian","Loulan", and "Kunlun", which has broad prospects for the development of film and television dramas. Against the background of rapid growth of the cultural industry, the company develops and operates films, TV dramas, games, etc. through high-quality IP, develops and operates the entire industry chain of high-quality IP, and realizes a strong content + multi-channel model to help the company establish a pan-entertainment cultural platform.

Huanrui Century founded Huanrui Games in 2013 with the help of super IP reserve movie game interactive model

. As a new game company, it already owns Tianzhi Studio, Magic Dragon Studio, Wolong Team, and Kiling Studio. Huanrui Games focuses on self-research and operation of page games, mobile games, and pan-entertainment platforms. Relying on Huanrui Century's large number of martial arts, Xianxia, and magic film and television materials and rich theater and film and television promotion resources, Huanrui Games has adopted IP authorization and independent R & D and diversified operation methods deeply integrate film and video games, allowing both parties to complement and continue each other, forming a business model integrating film and video games, with significant synergy effects. The company's high-quality phenomenon-level IP games such as God's Tomb OL(in cooperation with 360), Tomb Robbing Notes S(internal development), Qingyunzhi, and Kunlun are all expected to become good content carriers for movie-game interaction, creating popular movie-game cases. It is expected to bring considerable cash flow and profit growth points to the company.

[Original Announcement]

*ST Xingmei: 2015 Annual Results Announcement

Editor: kong