200 billion yuan in mergers and acquisitions and upgrades 2015 box office carriages drove stock prices up

In 2015, a total of 137 mergers and acquisitions in the cultural media industry occurred in the A-share market, involving capital of approximately 230 billion yuan, of which 76 were related to film and television, accounting for more than half, involving capital of 200 billion yuan, accounting for 87%, on average. A film and television merger occurred every 5 days.

Original title: How does the cool film and television industry create the myth of capital mergers and acquisitions?

The film and television industry has never lacked the "myth" of high return on investment. "To Youth", which cost 60 million yuan to produce, won 700 million yuan at the box office;"Journey to the West: Demon Conquering" cost 102 million yuan, in return of 1.237 billion yuan;"Lost in Thailand" leveraged box office revenue of 1.2 billion yuan with 30 million yuan,"Charlotte Worry" brought in revenue of 1.441 billion yuan at a cost of 50 million yuan, and created a return rate of up to 3000%."Monster Hunt" ranked first in the box office in 2015, bringing in revenue of 1.61 billion yuan with a production cost of 350 million yuan.

It can be seen that the film and television industry is no longer a "fat job" that cultural enterprises can enjoy exclusively, and has long been the target of public criticism in the capital market.

61 film and television mergers and acquisitions triggered 2014

In 2014, a total of 169 cultural and media industry mergers and acquisitions occurred, involving capital of approximately 160.5 billion yuan. Among them, 61 were film and television mergers and acquisitions, and 19 were cross-border mergers and acquisitions, including food, manufacturing, hotels, tourism, technology, and the Internet., etc. have cross-border acquisitions.

On August 7, 2014, PE brokered cross-border mergers and acquisitions by domestic online video Sohu and spent 15 billion won to buy South Korean entertainment media company KeyEast. In 2014, many listed companies were involved in film and television. For example, Panda Fireworks acquired a 100% stake in Huahai Times Pictures for 550 million yuan, Hunan Eqing acquired a 51% stake in two film and television companies, Zhongnan Heavy Industry acquired a 100% stake in Datang Brilliant, Huangshi Dairy acquired a 100% stake in Yujia Film and Television for 680 million yuan, and Daobo Shares acquired a 100% stake in Qiangshi Media for 780 million yuan. Shenke shares acquired 100% equity of Hairun Film and Television for 2.52 billion yuan, Hesheng Xincai acquired 26.5% equity of Jinyingma Film and Television for 220 million yuan, and Leo shares acquired 100% equity of Shanghai Argon Krypton and 100% equity of Amber Communication for 420 million yuan.

Among the above M & A cases, there are a large number of cross-border M & A cases. At the same time, listed companies such as film and television industry tycoons Huayi Brothers, Huace Film and Television, and BesTV are also accelerating mergers and acquisitions. Such a large number of mergers and acquisitions occur mainly because the film and television industry is a profiteering industry. As long as product quality and sales model are guaranteed, the company's expected profits will be favored by capital. At the same time, at a time when the country is vigorously supporting the cultural industry, M & A funds can enjoy policy dividends on film and television projects.

200 billion yuan in mergers and acquisitions upgrades In 2015

, a total of 137 cultural media industry mergers and acquisitions occurred in the A-share market, involving capital of approximately 230 billion yuan, of which 76 were related to film and television, accounting for more than half, involving capital of 200 billion yuan, accounting for 87%, on average, one film and television merger event occurred every 5 days.

These involve horizontal mergers, vertical integration and cross-border acquisitions. In May 2015, Huawei Co., Ltd., one of the well-known leading companies in the domestic toy industry, planned to acquire a 100% stake in the film and television company Zhejiang Dream Xingshengyuan for 1.2 billion yuan. In June, Wanda Cinema said it would acquire a 100% stake in Hoyts Group, a Australia movie theater operator, for RMB 2.25 billion. Great Wall Film and Television acquired two advertising companies and other film and television industries for 324 million yuan. Baocheng Co., Ltd. acquired 100% equity of Zhonglian Transmission for 845 million yuan, Huangshi Group, which started in the traditional dairy industry, acquired 100% equity of Shengshi Jiaoyang for 780 million yuan, and Xilinmen, a company in the furniture industry, acquired 100% equity of Greentown Media for 720 million yuan. All cases are cross-industry "drama".

In 2013, there were only 7 A-share mergers and acquisitions involving the film and television industry; in 2014, there were 61 film and television mergers and acquisitions, accounting for 36%; and in 2015, there were as many as 76 film and television mergers and acquisitions, accounting for more than half, involving capital of 200 billion yuan., accounting for 87%, with an average of one film and television merger event occurring every 5 days.

The logic behind M & A cases has

soared in the domestic box office market

. The box office market has maintained a high growth rate in recent years. In 2013, the total box office of movies nationwide went straight to 22 billion yuan, and in 2014 it was close to 30 billion yuan. At the end of 2015, the total box office of movies nationwide exceeded 44 billion yuan, an increase of 47% compared with the same period last year. Among the 44 billion yuan, domestic films contributed about 60%.

From the perspective of demand, not only has the demand of my country's film industry shown explosive growth, but it can be seen from the market of 44 billion yuan in 2015. The scale and demand of the market continue to expand. At the same time, from the perspective of supply, the proportion of domestic Chinese-language films in the box office continues to increase, and the industrial structure of domestic supply films has also changed. From overseas introduction to overseas cooperation and then to domestic production, it has also gradually moved from high-cost to low-cost and high-yield structures.

The box office carriage drove stock prices up.

"Charlotte Worries" not only earned 1.4 billion yuan in revenue at low cost, but also made Happy Mahua popular and opened the door to the new third board."Monster Hunt" not only broke the box office record for domestic films, but also It has brought three consecutive daily limits to Beijing culture after the resumption of trading; at the same time,"Return of the Great Sage", as a dark horse of an animated film, also gave Lugang Technology five daily limits.

According to Wind statistics, among the 12 film, television and animation industry companies that have released interim performance forecasts, 10 companies expect performance growth in the first half of the year, of which 7 companies have increased by more than 30%. The performance of A-share listed companies such as Tangde Film and Television, New Culture, Hualu Baina, Wanda Cinema, Aofei Animation, and Great Wall Film and Television all achieved steady growth in the first half of the year, with the expected maximum growth rate exceeding 50%, and some growth rates are expected to reach 70%, or even double.

Similar to 2014, cross-border film and television mergers and acquisitions are still frequent, and film and television companies have almost become the "life-saving straw" for the transformation of traditional industries. For example, on December 17, Qixi Holdings issued an announcement stating that Focus Media's backdoor restructuring plan had been approved by the China Securities Regulatory Commission, which also means that Focus Media became the first listed company to delist from U.S. stocks and then enter A-shares. As soon as the announcement was made, Qixi Holdings had a daily limit on the same day.

It can be seen that behind the booming box office are countless daily limits for its copyright company. The box office of the film has become a powerful driving force for the company's stock price to rise.

The victory of the revelers

"left the square behind", and Wanda Theater Line accelerated its expansion through mergers and acquisitions

. In the first half of 2015, the domestic box office reached 20.36 billion yuan, a year-on-year increase of 48%. In the same period, Wanda Theater's box office was 2.85 billion yuan, a year-on-year increase of 43.3%; the number of movie-goers was 64.77 million, a year-on-year increase of 37.5%; and the market share was 14%. It can be seen that the box office growth rate of Wanda Cinema has lagged behind the national box office, and its market share is declining.

The reason is that Wanda Cinema's model is that wherever there is Wanda Plaza, there will be Wanda Cinema, but the growth rate of theaters cannot keep up with the explosive growth that China films are experiencing, and the box office is rising to a higher level every year. In order not to let its own advantages become a burden, Wanda Theater Line must speed up its pace to "shake off" Wanda Plaza and go to all parts of the country to race for horses. In the 2015 mid-year report, Wanda Cinema Line has made it clear that it will continue to expand the company's scale through self-development and external mergers and acquisitions and maintain continued growth in the company's revenue and profits.

So, Wanda Cinema continued to start and fall in 2015. On June 25, Wanda Cinema Line acquired 100% equity of Hoyts Group for 2.25 billion yuan; on June 26, Wanda Cinema Line issued an additional 100% equity of Muwei Fashion, the acquisition target, and 100% equity of 15 companies including Chongqing Shimao Cinema Management Co., Ltd. held by Shimao Cinema Investment and Development Co., Ltd., with a total capital of 2.2 billion yuan; On August 31, 2015, Wanda Cinema Line acquired a 20% stake in Shiguang. com through strategic investment.

It can be seen from the share price of Wanda Cinema Line that during the whole year of 2015, Wanda Cinema Line's share price ended with a growth of 400%. A series of mergers and acquisitions in the film and television industry have brought considerable benefits to Wanda.

The

2014 semi-annual report of Baocheng Co., Ltd., a good medicine in the entertainment industry, showed that the company achieved operating income of 67.8471 million yuan in the first half of the year, and net profit was only 40,900 yuan, down 81.24% and 98.35% year-on-year respectively. There is no doubt that the downturn in the entire steel industry has brought great difficulties to Baocheng.

On January 12, 2015, Baocheng Co., Ltd. will increase 2.4 billion yuan to acquire Taole Network and Zhonglian Transmission Baocheng Co., Ltd. The acquired Zhonglian Transmission is a comprehensive professional film and television company integrating film and television investment, production and distribution. Zhonglian Transmission has produced and co-produced the film and television works of the "Tiny Times" series. In 2013 and January to November 2014, China United Transmission's net profit was 6.4181 million yuan and 29.2975 million yuan respectively. Baocheng Co., Ltd. said that in the future, China United Transmission will create a high-quality film and television series based on Taole Network's game products that have a good player base and reputation.

With this fixed increase and change of business, the performance and performance expectations of the target company have given investors hope. At the same time, some actions demonstrated Baocheng's determination to switch to Quancheng Entertainment.

It can be seen from the picture that when Baocheng shares switched to Quanentertainment, the type of entertainment industry brought Baocheng's stock price a rapid rise.

BAT stirs up the film and television industry and acquires

film companies that will work for BAT has become a major theme in the film and television industry. Alibaba acquired Culture China, iQiyi and Huace Film and Television jointly established iQiyi Pictures, and Youku Tudou established Heyi Pictures... BAT, which has strong funds, has a strong layout in the content field. Nowadays, Internet companies are increasingly inclined to develop into the "digital cultural industry". In the future, the boundary between Internet companies and the cultural industry will become increasingly blurred.

Different from horizontal mergers and acquisitions of film and television companies in other industries, the Internet will intervene more deeply, change and even subvert the models and rules of the game of the film and television industry. The film circle is a closed loop, with directors, producers and actors flowing almost within small circles. But the characteristics of the Internet are "decentralization" and "borderless". From the current point of view, BAT's intervention has brought subversion to film production, marketing, distribution, screening and other aspects.

In the production process, BAT's intervention broke the elite circle of the film and television industry through crowdfunding. Ali's "Entertainment Treasure" and Baidu's "Baifa Youxian" both have crowdfunding shadows, which means that before the movie has even been filmed, a large number of movie investors have become loyal fans and audiences, spontaneously promoting the movie and bringing family and friends to watch the movie you invest in together.

As far as the screening process is concerned, the "social function" of theaters continues to be prominent. Driven by online ticketing systems such as Meituan Cat's Eye, Guevara, Sales Network, WeChat movie tickets, and Taobao movie tickets, O2O marketing models continue to be innovated. Take the film "Best Life for a Coquettish Woman" as an example. It launched an online marketing model to combine logical thinking, call a duck and other WeChat accounts for fan interaction, which promoted the box office of the film to a certain extent. In addition,"bullet screen", a new way to watch movies in the mobile Internet era, is also popular among post-90s audiences.

Buyers of Bona Film's recent return to A-shares can be seen as "exciting". Bona Film disclosed its "buyer lineup": Alibaba, Tencent, CITIC Securities, Fosun International, Red Shirts, Softbank Saifu, and Yu Dong, founder of Bona Film. These big buyers formed a "luxury group", including Jack Ma, Ma Huateng, Guo Guangchang, Shen Nanpeng, Yan Yan and many other big shots.

Yu Dong was the first "big guy" in China film industry to be wary of BAT. However, during the privatization process of Bona, Yu Dong finally invited Ali and Tencent to become his investors. According to the plan, Alibaba Pictures will invest US$86 million and eventually hold a 10% stake in Bona, while Tencent's companies will hold approximately 7%.

It can be seen that BAT, which has huge traffic, user base and a large amount of capital, will be a new and powerful player in the film and television industry. They will continue to use their funds and advantages to acquire a large number of film and television companies, so as to continuously expand their own ecosystem and form a more complete ecological closed loop.

The film and television industry's lost

path where will the film and television industry be in the future? Faced with sufficient capital mergers and acquisitions from Internet giants such as BAT, what should film and television companies do? Only by developing their core capabilities: film production capabilities, distribution capabilities, and theater management capabilities can film and television companies continue to survive the wave of mergers and acquisitions and restructuring.

This article is reproduced from Weixin Official Accounts: New Third Board Think Tank Micro Signal: xsbzhiku

Editor: kong