China Television Entertainment plans to raise 900 million yuan to launch many film and television works such as Douluo Mainland within two years

China Television Entertainment Investment Group disclosed in advance the IPO prospectus on the website of the China Securities Regulatory Commission and plans to raise RMB 900 million on the GEM, mainly to supplement the working capital of film, television and drama.

China Television Entertainment Investment Group disclosed in advance the IPO prospectus on the website of the China Securities Regulatory Commission and plans to raise RMB 900 million on the GEM, mainly to supplement the working capital of film and television dramas. The company will invest in the filming of "Deng Lijun" and "Douluo Mainland" in the next two years.

The issuance of 40 million shares raised 900 million yuan to supplement the operating capital of the film and television drama

. The prospectus shows that there are 12 sponsors in this public offering, including two legal persons: Hailong Investment and Wanda Investment, Cultural Industry Fund, New Vision, Xingle Investment, Hillhouse Tiancheng, China Vision Vision, Mien Investment, Wanrong Wenfu, and three natural persons: Wang Chen, Zhao Yi and Wang Hao.

Before this issuance, the company's total share capital was 120 million shares. The number of shares planned for initial public offering to the public this time was 40 million shares, accounting for 25% of the total share capital after the issuance. It is planned to raise 900 million yuan to supplement the film and television drama business working capital projects, including IP copyright purchase, human resources, film and television drama production and other aspects.

It is mainly engaged in investment and production of film and television products, with three-year revenue of 1.944 billion yuan

. China Television Entertainment was established in 2005. Its main business is investment, production, distribution and derivative business of TV dramas and films. The main profit model is to complete TV dramas and film works through planning, investing, shooting, and production, and obtain income such as distribution and box office distribution by signing distribution contracts with TV stations, online video websites, movie theaters and other companies. In addition to film and television dramas, the company also engages in a small number of artist brokerage and related services. Representative works include "To Youth" and "Ordinary World".

Among the three main businesses of TV series, movies, and film and television series derivatives, the TV drama business has the highest gross profit margin and the greatest impact on the company.

Profit data

According to corporate financial reports, China Television Entertainment's revenue during the three years 2014-2016 was 150 million yuan, 571 million yuan and 1.223 billion yuan respectively, and its net profit was 17.0102 million yuan,-120 million yuan and 30.2795 million yuan respectively. Among them, the gross profit margins of the TV drama business were 34.78%, 32.76% and 57.47%, respectively, showing an upward trend.

In terms of fluctuations in financial data and performance in the past three years

, the prospectus stated that the main reason for the loss in 2015 was that the box office situation of the films "New Step by Step" and "The Third Love" did not meet expectations and the investment costs were not recovered. The company's profit growth in 2016 was mainly due to the good performance of the TV series "To Youth". During the period, the gross profit of the TV series business accounted for 72.46%.

Employee structure

In addition, the gross profit margin of the film, television and drama derivative business is relatively high, mainly due to the small number of artist managers in the company and the low total salary.

In the next two years, it will invest 1.13 billion yuan to invest in the filming of large IP works such as "Teresa Teng" and "Speed 5cm per second"

. The prospectus states that China Television Entertainment already has certain resource accumulation and mature production, sales and operation models in the film and television drama industry. In order to promote continued growth in performance and reduce risks, the company will make efforts on TV dramas in the future, follow the high-quality route, and focus on transforming high-quality scarce IP into high-quality film and television works.

TV series plan

According to the plan, China Television Entertainment will launch 6 TV series including "The Flowers Bloomed That Year","Gone with the Wind","Teresa Teng","Bonfire on the Moon","Express Little Qiao","The Stirring Thirty" and many other films such as "5 cm per second","Shanghai Fortress","Ah Li","Douluo Continent", and "Dragon" in the next two years.

Among them, the planned investment in TV dramas is 709 million yuan, and the planned investment in films is 423 million yuan, totaling 1.132 billion yuan.

China Television Entertainment said that in the future, the company will actively increase the number of film and television dramas it produces while ensuring the quality of film and television dramas, thereby spreading the risk that the marketability of a single film and television drama will not meet expectations, leading to fluctuations in the company's performance, a sharp decline or even losses.

Editor: jessica