Wang Zhongjun: the movie and pitcher tour show just opened.

Why does the first share of gem soar? 1414 days after listing, Huayi Brothers finally became the company with the highest market capitalization on gem with 37.5 billion yuan. Not only in the film market, Huayi Brothers continued its focus style, but also was interpreted as a miracle in the capital market. Mdash;— 's share price soared from 14.8 yuan at the beginning of the year to 63.85 yuan on Sept. 10, an increase of more than 330%.

< strong > Huayi Brothers, why are they soaring? < / strong >

the gem opened in 2009, and Huayi Brothers, No. 27, ranked at the top of the list with an average earnings per share growth rate of 27% in its three full fiscal years. In fact, of the 36 companies listed on the stock market that year, only 12 achieved continuous growth in 2010, 2011 and 2012.

even Wang Zhongjun, the head of Huayi Brothers, was surprised to learn that ldquo;C36” had only 12 companies with continuous growth. However, in an exclusive interview with the "Talent" reporter, Wang Zhongjun said that in terms of Huayi Brothers' performance over the past three years, & ldquo; has achieved a passing grade and strives to maintain an average growth rate of 30 per cent over the past five years. & rdquo;

of course, Huayi Brothers is not the only one in the Chinese film industry. Light Media, which is also listed on the gem, Great Wall Film and Television, which is backed by Jiangsu Hongbao, Boehner Pictures listed on Nasdaq, and China Film Group and Pentium, which have yet to be listed, are all rivals of Huayi Brothers.

& ldquo; although Huayi currently has competitors in individual business, on the whole, no one can pose a threat to Huayi as a whole. & rdquo; Wang Zhongjun told the "Talent" reporter that after years of accumulation, Huayi has reached this stage and is worthy of the title of the first stock in the cultural industry.

& the listing of ldquo; brings Huayi almost all positive energy, and listing is the beginning of Huayi's second venture. & three years after rdquo; went public, Huayi Brothers made movies, mergers and acquisitions and pitcher games. Wang Zhongjun said he had just started.

perhaps, Wang Zhongjun's self-confidence is not without reason, at least Jack Ma and Ma Huateng believed it, otherwise they would not have paid out real money. & ldquo; Jack Ma and Ma Huateng are both shareholders of the company. Although they have also given some support to Huayi, we have never had cooperation between companies, and there will be real chemical reactions in the future. & rdquo;

it seems that all this is just the curtain that the drama has just begun.

< strong > making movies with high gross margin is the norm < / strong >

The gross profit margin of

66.75% makes it impossible to underestimate the entertainment industry. In 2012, the gross profit margins of Huayi Brothers films and derivatives were 48.42%, 33.06% and 35.3%, respectively. It jumped a lot in the first half of this year.

& ldquo; high gross margin will be the norm. & rdquo; Wang Zhongjun said that this is the imagination of Chinese film companies. Ldquo; Chinese movies broke out in recent years. If you want to win at the box office, you should hit the level of 200 million US dollars. The Tangshan earthquake 670 million was 100 million US dollars, but it doubled in two or three years. & rdquo;

investors are more concerned about the volatility of Huayi Brothers' performance changes than the sustainability of high gross margins. Huayi Brothers' earnings per share grew steadily at more than 35 per cent in 2010-2011, but only 17.65 per cent last year, and jumped to 294.12 per cent in the first half of this year.

Huayi Brothers' earnings growth in the first half of the year is largely due to the fact that the film Journey to the West has achieved much better than expected at the box office. In the second half of the year, "Dragon King, God of Di Renjie" directed by Tsui Hark and "Private customized" by Feng Xiaogang will be released on National Day and Chinese New year, and "Dragon King" directed by Tsui Hark in September. It is said that the film will show the innovation of the blockbuster. It is widely predicted that Huayi will still be the big winner in the second half of the year.

there is no doubt that the buttocks of the audience determine the performance of the film company. A top-grossing film may drive up the gross profit and boost the performance, otherwise it may cause the film company to decline rapidly. Who can 100% take the pulse of the prospective audience?

also because of the great flexibility of performance, it is difficult for the capital market shame to make a reasonable valuation of Huayi Brothers.

& the reason why ldquo; has the characteristics of the industry, the film and television industry itself has such fluctuations. However, Huayi is expanding the film list through a series of measures such as entering English films and signing animation film brands, so as to calm the fluctuations caused by the narrow film list. & rdquo; Wang Zhongjun responded to the "talented" reporter in this way.

< strong > enter English movies? Go to Hollywood to grab a meal? < / strong >

it is written in black and white in the "Memorandum of understanding between China and the United States on the settlement of WTO Film-related issues": in 2016, the Chinese mainland market will be fully opened to Hollywood. To paraphrase what football commentators often say about Chinese football: there is not much time left for Chinese movies.

Wang Zhongjun disagrees. He believes that this cannot be called the impact on Chinese films, but should be called the mutual infiltration of Chinese and foreign films, and the way of infiltration-ldquo; must be more co-production. In terms of distribution, for the Chinese market, foreign film companies will have a demand for domestic distributors, while for the international market, Huayi certainly needs to cooperate with Hollywood distributors. No matter whether the Chinese film market is open or not, English films will certainly become a main direction of Huayi in the future. & rdquo;

< strong > cinema is not the main force, but steady < / strong >

Huayi Film still sits in the high chair of Huayi's largest business in the first half of this year, but unexpectedly, Huayi's cinema revenue has quietly climbed to the second place.

In fact, this trend has been on the horizon since Huayi intervened in cinema business in 2010. Over the past three years, Huayi's revenue in the cinema line has increased year by year, and the growth rate has been more than 50%. At the same time, Huayi's cost investment in the cinema line has also risen year after year, with an increase exceeding revenue, using this kind of investment at all costs to return to the second place. Does this mean that Huayi will greatly expand the cinema market in the future?

Wang Zhongjun gave a negative answer to this. He believes that Huayi Development Theater chain is only based on the overall layout of the business, which is relatively stable in the future, but this is not the main development direction of Huayi. After all, Huayi is mainly a content manufacturer of film and television.

of course, many people will guess whether Huayi's entry into the cinema line will incur hostility from the original cinema line, thus affecting Huayi's film production in these cinema chains. & ldquo; this does not matter, mainly depends on the quality of the film itself, good content is the key, if the film is poor, Huayi does not enter the cinema, others will not arrange the film. & rdquo; Wang once again stressed the importance of content production.

Wang Zhongjun's steady attitude towards cinema development can also be seen from the development speed of Huayi cinema chain. Huayi has only opened 15 cinemas in more than three years, that is, an average increase of no more than 5 per year. This speed is really not fast for Huayi.

although Wang Zhongjun did not put cinema development as a top priority, Huayi Brothers is not lazy about this business. Huayi announced that Huayi invested RMB 210 million in Jiangsu Yaolai Cinema Management Co., Ltd., through its subsidiary Huayi Brothers (Tianjin) Interactive Entertainment Co., Ltd., this acquisition enabled Huayi to acquire a 20% stake in Jiangsu Yaolai.

so for Wang Zhongjun's steady strategy, perhaps we should understand that this is Huayi cinema moving forward in a low profile.

< strong > the plot of M & An is like making a movie < / strong >

A merger and acquisition made investors find out again & the reduction of ldquo; holdings & the old debt of rdquo;. Perhaps Wang Zhongjun himself did not expect to become a storm star in the capital market again.

Huayi Brothers announced on September 2nd that it plans to spend 252 million yuan on the equity transfer price to acquire Nanjing Hongli Xingheng Culture Communication Co., Ltd. And Nanjing Jiamu Culture Communication Co., Ltd., a total of 70% of Zhejiang Changsheng Film and Television production Co., Ltd. (hereinafter referred to as Zhejiang Changsheng). At the same time, Hongli Xing Heng intends to use Zhejiang Huayi to pay part of its equity transfer to buy the shares of Huayi Brothers Media Co., Ltd. Held by Wang Zhongjun and Wang Zhonglei, the actual controllers of the company.

what is eye-catching is that Zhejiang Changsheng is a company actually controlled by film and television actor and well-known director Zhang Guoguo, which can be said to be a company specially set up for the cooperation between Huayi and Zhang Guoli. Zhang Guoguo installed all his production and distribution business into this newly established company, thus forming an effective legal subject. # p# subtitle # e#

but does Zhejiang often appreciate this price?

some investors question: based on Zhejiang Changsheng's registered capital of 10 million, Huayi Brothers is equivalent to buying at a premium of 35 times. Compared with Huayi's total profit of 240 million in 2012, investors ridiculed the conclusion that Wang Zhongjun was a good friend of ldquo; China and the major shareholder of rdquo;, ignored the interests of medium and small investors.

& the ldquo; price-to-earnings ratio cannot be calculated using registered capital. & rdquo; Wang Zhongjun obviously disagrees with this doubt, telling Talent: at present, the valuation of similar TV series production companies in the market is generally about 12 times, while the valuation offered by Huayi is in line with the market situation. & ldquo; this transaction is based on a comprehensive consideration of the expected net profit of Zhejiang Changsheng in 2013 and Zhang Guoguo's brand effect, and the transaction price is reasonable after negotiation between the two parties. & rdquo;

another controversial point among investors is the 152 million yuan equity transfer price paid by Zhejiang Huayi to the regulatory account jointly provided by Hongli Xingheng and Zhejiang Huayi. The money in the regulatory account can only be used for Hongli Xingheng to buy shares in Huayi Brothers held by Wang Zhongjun and Wang Zhonglei, the actual controllers of Zhejiang Huayi. Hongli Xingheng agreed to lock up its purchase of ldquo; Huayi Brothers stock & rdquo; held by Wang Zhongjun and Wang Zhonglei for three years.

this gives people the impression that the company's money for mergers and acquisitions has gone into the personal pockets of major shareholders Wang Zhongjun and Wang Zhonglei after this transaction. As a result, some market participants have come to the conclusion that this is obviously reducing their holdings in disguise and hollowing out listed companies, so they have even more determined that the premium of Changsheng in Zhejiang is too high.

however, on September 10, Huayi Brothers issued an announcement: in order to avoid public misunderstanding, Chairman Wang Zhongjun submitted a motion to the board of directors on September 3, 2013 to amend the relevant contents of the Investment Cooperation Agreement.

The main content of the

motion is as follows: Hongli Xingheng agrees to use the equity transfer of RMB 152 million paid by Zhejiang Huayi to buy directly from the secondary market within three months from the date of payment to the designated regulatory account & ldquo; Huayi Brothers shares & rdquo;, instead of specifying to buy & ldquo; Huayi Brothers shares & rdquo; held by Wang Zhongjun and Wang Zhonglei, the actual controllers of the company. At the same time, the three-year agreement to buy stocks remains unchanged.

in this way, the disguised reduction of holdings does not exist. In fact, there is no change in essence between the original agreement and the revised agreement. It's just a psychological comfort for medium and small investors. No matter where Hong Li Xing Heng buys it, as long as major shareholders such as Wang Zhongjun want to reduce their holdings, they can always find channels.

and Wang Zhongjun also made it clear: & the transfer of shares in ldquo; is mainly to tie down Zhang Guo & rdquo;, the whole deal is actually a process of cash plus options to buy Zhang Guoli and his production team.

Zhang Guoguo also told Yingcai that the purchase price of ldquo; is not high, and someone has offered a higher price than this. For Huayi, this acquisition should be said to be reasonable. & rdquo; at the same time, Zhang Guoguo said his arrival will certainly improve Huayi's TV series performance.

has been on the market for three years, but compared with being in full swing in movies, Huayi Brothers is less than satisfactory in TV dramas. TV series maintained a growth rate of more than 10 percent in 2010 and 2011, but there was a negative growth in 2012 and a sharp decline of 37.06 percent in the first half of 2013.

In fact, in the relevant announcement on the acquisition of Zhejiang Changsheng, special reference was made to the guarantee of Hongli Xingheng and Zhang Guoli: the performance commitment period is 5 years, in which the net profit target for 2013 is Zhejiang Changsheng's audited net profit after tax of not less than 30 million yuan, and the after-tax net profit target for the remaining years will be increased proportionally on the basis of the net profit target promised in 2013.

in a certain year during the performance commitment period, Zhejiang Changsheng's audited net profit after tax is lower than the net profit target for that year, then Hongli Xingheng and Zhang Guo agree to supplement Zhejiang Huayi in cash to ensure that the sum of Zhejiang Huayi's profit dividend from Zhejiang Changsheng in that year and cash compensation from Honglixingheng and Zhang Guoli is not lower than the expected net profit target of Zhejiang Changsheng in that year & times 70% preferrdquotation;.

therefore, no matter from the perspective of capital market or business development, Huayi Brothers' mergers and acquisitions of Zhejiang Changsheng are very smart.

< strong > playing mobile games has long been lurking < / strong >

Huayi Brothers & ldquo; plays & rdquo; mobile games, which is a happy thing for everyone.

another important reason for Huayi Brothers' excellent performance in the first half of the year is the reduction of investment income from palm technology. Profits from mobile games seem to inspire Huayi's enthusiasm for mobile games, and on July 23, Huayi Brothers issued a preliminary announcement for the acquisition of a 50.88% stake in Yinhan Technology. Subsequently, the company's share price rose, rising 45% in four days, and investors were delighted.

the above equity transaction price is about 672 million yuan, and the company is required to issue about 7.6069 million shares to the Yinhan selling shareholders, with an average offering price of 29.43 yuan and a cash payment of about 448 million yuan.

the main business of Yinhan Technology is the R & D and operation of mobile online games. Over the past decade, we have produced many kinds of game products, such as "Sword Heart of Heaven and Earth", "Fantasy Journey to the West", "Fantasy Wulin", "Journey to the West Online" and "Dream Journey to the West" and so on. At present, however, the company's main source of revenue is the game time Hunter. Data show that from January to June 2013, the average number of monthly active users of the game reached 2.8707 million.

due to Huayi's success in mobile games, mobile games are hot in the capital market, and a lot of capital is chasing manufacturers of mobile games at all costs.

with regard to this phenomenon, Wang Zhongjun believes that this cannot be called a kind of fever, this is what the media say, investors must not feel hot, otherwise he will not invest. As far as Huayi is concerned, the layout of mobile games was three years ago, and the industry was certainly not hot at that time. Now the capital is gathered here, which shows that this industry is a good industry, so it is right for Huayi to continue to invest.

as to whether the price is too high, Wang Zhongjun told the "Talent" reporter that, for example, the "time hunter" of Yinhan Technology had revenue of only 40 million at the time of acquisition, and the figure rose to more than 60 million after a month or two.

Wang Zhongjun admitted that as a film company, the development of games and tourist towns at that time were all derivative products of movies, but with the development of the market, the game industry, especially Internet games and mobile games, will become a new profit growth point in the future. And in the future, it will not be ruled out that TV and movies will be made into games, so as to expand the externality of film and television.