Kimi Pictures plunged after resuming trading, making a difficult transition from film approval to film production

As a high-risk industry, high investment may not bring high returns. Transforming upstream may bring new development opportunities, but how to transform and how to transform is still a bigger challenge.

Original title: Kimi Pictures plunged after resuming trading. Movies were not as easy to make money as expected.

Kimi Pictures, a new board film and television company, finally resumed trading on June 14 after experiencing a suspension. Jimei Pictures 'business direction has shifted from the original "film approval" to participating in film production, but this transformation road has been particularly bumpy. The plummeting share price after the resumption of trading has also greatly reduced the market value of Jimei Pictures.

On June 14, the stock price of Shanghai Jimei Pictures Co., Ltd.(stock abbreviation: Jimei Pictures), a veteran new third board film and television company, plummeted after the resumption of trading, with the highest drop of 55.65%.

As of the close of the day, Kimi Pictures 'share price was 2.97 yuan/share, a drop of 34.15%. The company's share price reached 51.41 yuan at its peak. At the close of June 22, the stock price of Jimei Pictures was 3.45 yuan/share. The market value reached 1.026 billion yuan, just exceeding its net assets of 974 million yuan.

Jimei Pictures, which was still at the innovation level last year, has also been transferred out of the innovation level this year due to the delay in publishing its annual report.

It was not until June 9 that Kimi Pictures finally announced its 2016 annual report.

Data shows that in 2016, the company's operating income was 104 million yuan, a year-on-year decrease of 46%; net profit attributable to shareholders turned from profit to loss for the first time, with a loss of 265 million yuan, a year-on-year decrease of 830.14%. Kimi Pictures once had a market value of 3.861 billion yuan, but now it is only 1.026 billion yuan, just exceeding its net assets of 974 million yuan.

On December 10, 2013, Jimei Pictures launched the new third board.

In May 2015, Kimi Pictures issued 2 million shares to Haitong Securities and Orient Securities at a price of 19.25 yuan/share, raising funds of 38.5 million yuan.

In June 2015, Kimi Pictures issued 15.96 million shares to Beijing Tianxing Shanhe Investment Center, Orient Securities, Tianfeng Securities and other investors at a price of 23.8 yuan/share, raising funds of 380 million yuan.

In December 2015, Kimi Pictures completed another financing of 598 million yuan. Jimei Pictures 'total financing amount on the New Third Board reached 1.02 billion yuan.

The difficult transition from "film approval" to film production Lukimei

Pictures was established in 2008. Its main business is to introduce imported films to China and collect a share fee to assist in promotion. It does not participate in upstream production.

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.

According to the Sino-US Import Film Agreement, a quota of 34 Hollywood films are introduced to China every year and released simultaneously with the U.S. film market. Such films are divided into accounts;

another type of introduced film is the main business of Kimi Pictures, which buys out the domestic distribution revenue of films at lower prices. These films are usually released several months or even half a year behind that of foreign countries. Such films are "buyout films", commonly known as "approved films."

The hot sales of "buyout films" such as "Superbody" and "Violent Street" introduced by Jimei Pictures in 2014 have given Jimei Pictures a large share of box office revenue, and its performance has increased significantly, with revenue increasing by 218%. Net profit increased by 556%.

Since then, films such as "Hurricane Rescue 3" and "Fairy Hostel 2" have ensured rapid development by Kimei Pictures.

Since Jimei Pictures does not have distribution qualifications, it can only sign agreements with China Film and China 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, Jimei Pictures 'profit share has shrunk, and looking for a way to transform has become Jimei Pictures' direction.

Last year, Kimi Pictures began to announce its transformation to the upstream market and directly participate in the investment and production of films.

In fact, since 2014, the company has successively participated in the investment of some films, including "The Little Prince","Superbody", etc., and has begun to transform from downstream to upstream in the industrial chain.

In 2015, Kimi Pictures also started an independent development and production business.

In October 2015, Kimi Pictures announced that the company spent 450 million yuan to acquire a 27.89% stake in Europa, which was listed on the C segment of Euronext Paris.

Europa Pictures is a production company established by French director Luc Besson. It then began to cooperate with Luc Besson and successively released the Chinese and foreign co-production film "The Warrior's Gate", participated in the investment and assisted in promoting Europa's production of the English film "Nine Lives".

Luc Besson's blockbuster films, including "Interstellar Agents: City of Thousands of Stars","Survival in 24 Hours" and "The Clone", will also be released one after another. Especially for "Star Agents: City of Thousands of Stars", this science fiction giant has a total budget of US$210 million and is invested by Kimi Pictures. It is the largest investment film in European film history.

"Interstellar Agents: City of Thousands of Stars"

also caused Kimi Pictures 'costs to increase significantly by 108% in 2016.

Editor: jessica