Happiness Blue Ocean will launch a listing application on the GEM on the 26th. Wu Xiubo's worth is expected to exceed 100 million yuan

Happiness Blue Ocean Film and Television Culture Group Co., Ltd. will launch a listing application on the GEM of the Shenzhen Stock Exchange on July 26. Happiness Blue Ocean plans to issue 77.63 million new shares this time, accounting for 25.0011% of the total share capital after issuance. The initial offline issuance number is 46.6 million shares, accounting for 60.03% of the total issuance this time; the initial online issuance number is 31.03 million shares, accounting for 39.97% of the total issuance this time, and there is no transfer of old shares.

Original title: The inventory of Happy Blue Ocean TV dramas continues to grow Wu Xiubo waits to count the money

Happy Blue Ocean Film and Television Culture Group Co., Ltd.(hereinafter referred to as "Happy Blue Ocean") will launch its listing and subscription on the GEM of the Shenzhen Stock Exchange on July 26, 2016. Happiness Blue Ocean plans to issue 77.63 million new shares this time, accounting for 25.0011% of the total share capital after issuance. The initial offline issuance number is 46.6 million shares, accounting for 60.03% of the total issuance this time; the initial online issuance number is 31.03 million shares, accounting for 39.97% of the total issuance this time, and there is no transfer of old shares. The stock code is 300528, the issue price (estimated) is 6.62 yuan/share, and the sponsor institution is China International Capital Corporation.

According to reports, Jiangsu Radio and Television directly holds 65.7% of the shares of Xingfu Lanhai and has a direct and indirect shareholding ratio of 74%. It is the controlling shareholder of the company. Jiangsu Radio and Television has been ranked as the largest customer in Blue Ocean of Happiness for three years. Happiness Blue Ocean admitted in its prospectus that a large amount of related sales of TV dramas is one of the risks. Well-known actor Wu Xiubo holds 2% of the company's shares and is the sixth largest shareholder. It is estimated that Wu Xiubo's worth is expected to exceed 100 million yuan with the successful listing of Happy Blue Ocean.

According to the latest prospectus, during the reporting period, the company's accounts receivable balances at each period were relatively large. The company's accounts receivable balances at the end of September 2015, the end of 2014, the end of 2013 and the end of 2012 were 392 million yuan, 371 million yuan, 447 million yuan and 253 million yuan respectively, accounting for 39.17%, 42.93%, 59.47% and 38.50% of the company's operating income for each period.

In addition, preferential tax policies and government subsidies have also greatly enhanced the performance of Happy Blue Ocean. From January to September 2015, 2014, 2013 and 2012, the amounts of preferential income tax policies and government subsidies were 16.5742 million yuan, 54.0199 million yuan, 58.2558 million yuan and 41.4581 million yuan. The impact ratios of the two incentives on net profit (excluding the impact of income tax) were 23.70%, 63.64%, 48.59% and 40.00%.

The reporter sent an interview letter to the Xingfu Lanhai Board of Directors Office on the above-mentioned related issues, but no reply was received as of press time.

Backed by Jiangsu Radio and Television stars taking shares in advance

, it is reported that Happy Blue Ocean is mainly engaged in the investment, production and distribution of TV dramas and the entire film industry chain business. Among them, the entire film industry chain business includes two sub-businesses: film investment, production and distribution; and the operation of movie theaters and studios. The company's revenue mainly comes from the sales of TV drama rights and studio operations.

At present, Jiangsu Radio and Television directly holds 65.70% of the company's shares and is the controlling shareholder. As a state-owned film and television company, Happy Blue Ocean has previously led the production of many TV series such as "The Path of Life in the World is the Changes" and "The Boss's Happy Life", and has also participated in the investment of "Nanjing! Films such as Nanjing, Let the Bullets Fly, October Besieged City, and Yangtze River No. 7 have four film subsidiaries. "White Fireworks" is its first film as its main investor, with 60% of the investment ratio of Happiness Blue Ocean as the main investor, and the other two enjoy film copyright income in proportion to their equity.

The company conducted a round of financing in September 2011, and China Film Group, Cornerstone Capital and other funds strategically invested in the shares. Wu Xiubo and Zou Jingzhi also entered the company at a price of 9.67 yuan/share at that time. Wu Xiubo subscribed for 4.66 million shares of the company at a price of 45.0384 million yuan, of which 5.0384 million yuan was self-owned funds and 40 million yuan was loans. Zou Jingzhi became its shareholder with 9.0077 million yuan.

Wu Xiubo holds 2% of the company's shares and is the sixth largest shareholder. Gold-medal screenwriter Zou Jingzhi is also among its shareholders, holding 0.40% of the shares.

According to reports, with the IPO of film and television companies, the value of star screenwriters and directors often skyrocketed overnight due to their status as shareholders. Recently, Hairun Film and Television announced that it plans to go public with a shell A-share company, and actor Sun Li holds more than 2 million original shares of Hairun Film and Television, accounting for 2.6% of the total share capital of 77.58 million shares. Once Hairun went public, Sun Li's value doubled.

If Blue Ocean Happiness is successfully listed, Wu Xiubo's worth is expected to exceed 100 million.

According to the prospectus, the company plans to land on the GEM, issue 77.63 million shares, and raise funds of 1.1 billion yuan, which is intended to be used to supplement the working capital projects of the film and television drama business and movie studio investment projects.

The amount of TV dramas in stock has increased year by year. The gross profit margin of studios screening is higher than that of peers.

"Announcement on the Review Results of the 100th Meeting of the GEM Development and Audit Committee in 2015" shows that the Issuance Supervision Department of the China Securities Regulatory Commission asked the following questions about the listing of Happiness Blue Ocean:

The proportion of the issuer's TV drama investment, production and distribution business in revenue continued to decrease. During the reporting period, this business accounted for 67.23%, 49.53%, 26.28% and 14.24% of the issuer's operating income respectively. The issuer explained that the "one drama, two stars" broadcast model that has been officially implemented since January 1, 2015 is expected to have a certain impact on the issuer's sales revenue of a single TV series due to the reduction of the maximum sales volume of satellite TV in the first round. During the reporting period, the amount of TV dramas in the issuer's inventory increased year by year, to 84.696 million yuan, 91.7824 million yuan, 197.6928 million yuan, and 207.3621 million yuan respectively. Ask the issuer representative to: (1) While the proportion of the issuer's TV drama investment, production and distribution business in revenue continues to decrease, affected by policies and there is a ceiling in TV drama distribution, explain the rationality of the issuer's continued growth in the inventory of TV dramas;(2) Combined with the time when the distribution license was obtained for the main inventory TV dramas at the end of the period, the carry-over income and costs, explain the inventory impairment test and preparation for the uncarry-over costs;(3) Explain the after-season sales of the TV series "Fighting Devils in the Mountains","Behind the Beauty","In the Silent","Taking the No. 88 Bus Home", and "Ship in the Gulf of Aden", and explain the carry-over of the cost of TV series completed in 24 months such as "Being a Mom" among the inventory items. The recommendation representative is requested to express verification opinions on the above issues.

Litian Rongjin holds 10.00% of the issuer's equity and is the issuer's major shareholder. The prospectus disclosed that Litian Rongjin Zhang Xiang's ID number is 34040319831009XXXX. Zhang Xiang established Litian Rongjin in 2009 with a registered capital of 100 million yuan, of which Zhang Xiang contributed 50 million yuan. The recommendation representative is requested to further explain the verification of the shares held by Litian Rongjin and the source of funds of Zhang Xiang, the actual controller of Litian Rongjin.

From January to September 2015, 2014, 2013 and 2012, the gross profit margins of the issuer's studio screening business were 59.60%, 60.29%, 61.37% and 62.40% respectively, which were higher than comparable companies in the same industry. The issuer's representative is requested to further explain the reasons by comparing indicators such as single-screen box office revenue and single-screen box office costs with comparable companies. Please ask the recommendation representative to explain the verification status.

The properties of the issuer's studio business are mainly rented. As of the end of the reporting period, among the 49 controlled studios that the issuer has opened, one Shuyang Studios is owned by its own property, and the remaining 48 properties are leased. The lease period is relatively long, generally about 15 years. According to the "House Rental Contract" signed by the issuer and the lessor, the two parties will usually agree on a certain rent-free period for studio decoration and market cultivation. The rent-free period is generally 6 months. The issuer adopted the accounting treatment method of "not recognizing the rental expenses of the studio during the rent-free period, and calculating and withdrawing the rental expenses based on the standards agreed in the house lease contract after the rent-free period." The issuer's representative is requested to further explain whether the rent treatment during the rent-free period complies with the relevant provisions of "Accounting Standards for Business Enterprises Interpretation No. 1" and the corresponding amount. Please ask the recommendation representative to explain the verification status.

The issuer signed the "Agreement on Leasing and Trademark Licensing of IMAX Theater System" and "Amendment Agreement 1" with IMAX China (Hong Kong) Co., Ltd. and Amex (Shanghai) Multimedia Technology Co., Ltd., requesting the issuer to explain in accordance with the agreement and the relevant terms of "Accounting Standard for Business Enterprises No. 21-Leasing":(1) the amount data of assets and liabilities involved in the above agreements and businesses during the reporting period;(2) whether these transactions are a financial leasing business;(3) Whether the issuer's actual accounting treatment is appropriate.

There are large-scale related transactions with major shareholders

. According to reports, compared with A-share private film and television drama companies, the state-owned assets of Happy Blue Ocean located in Nanjing, Jiangsu Province attract attention.

The prospectus shows that Jiangsu Province Radio and Television Group (hereinafter referred to as "Jiangsu Radio and Television") Co., Ltd. directly holds 65.7% of the shares of Happy Blue Ocean, and has a direct and indirect shareholding ratio of 74%. It is the controlling shareholder of the company.

In 2005, it was funded by Jiangsu Radio and Television. When it was established, the publisher was mainly engaged in the advertising agency business of Jiangsu Variety Channel and Jiangsu Film and Television Channel affiliated to Jiangsu Radio and Television. In December 2007, Jiangsu Radio and Television increased the capital of the issuer with the assets related to the film and television drama production business. After the capital increase was completed, the issuer's main business was changed to TV drama production and distribution business. Starting from January, 2010, the issuer will no longer engage in advertising agency business.

Jiangsu Radio and Television has been ranked as the largest customer in Blue Ocean of Happiness for three years. From 2011 to 2013, Jiangsu Radio and Television spent 49.2 million yuan, 90.64 million yuan and 105 million yuan respectively on purchasing Happy Blue Ocean TV dramas, accounting for 13.95%, 13.77% and 14.29% of Happy Blue Ocean's operating income respectively. If calculated based on the total revenue of TV dramas in the same period, the proportions were as high as 24.68%, 20.48% and 28.17%. As of the end of last year, Jiangsu Radio and Television had arrears in accounts receivable of 63.55 million yuan.

The prospectus frankly stated that the large amount of related sales of TV dramas is one of the risks.

An industry analyst analyzed to reporters that having channel resources is a double-edged sword that can ensure that the TV series produced will not worry about sales. However, it is also difficult for the market to judge the level of the company's film and television production business and whether it can compete with fully market-oriented private companies. In addition, it is not ruled out that some related transactions will be brought in to ensure pre-listing performance and improve valuation.

Large accounts receivable balance

According to the Economic Information Daily, during the reporting period, the company's accounts receivable balance at each end of the period was relatively large, with a maximum of nearly 60%. The company's accounts receivable balances at the end of 2013, 2012 and 2011 were 447 million yuan, 253 million yuan and 73.4547 million yuan respectively, accounting for 59.47%, 38.50% and 21.33% of the company's operating income for each period.

The prospectus shows that the company's accounts receivable balance at the end of the reporting period was relatively large, mainly due to the large balance of accounts receivable from the company's TV drama business. At the end of 2013, 2012 and 2011, the balance of accounts receivable from the company's TV drama business accounted for the company's accounts receivable balance. The ratios of accounts receivable balances were 95.95%, 92.79% and 90.74%, respectively.

Industry insiders said that the balance of accounts receivable for Happy Blue Ocean Film and Television's TV drama business is large, which is due to the characteristics of the film and television drama production industry.

According to the latest prospectus, during the reporting period, the company's accounts receivable balances at each period were relatively large. The company's accounts receivable balances at the end of September 2015, the end of 2014, the end of 2013 and the end of 2012 were 392 million yuan, 371 million yuan, 447 million yuan and 253 million yuan respectively, accounting for 39.17%, 42.93%, 59.47% and 38.50% of the company's operating income for each period.

At the end of September 2015, the end of 2014, the end of 2013 and the end of 2012, the balance of accounts receivable of the company's TV drama business accounted for 79.66%, 91.04%, 95.95% and 92.79% respectively. The company stated that the large balance of accounts receivable in the TV drama business is due to the characteristics of the film and television drama production industry in which the company is located.

In addition, at the end of September 2015, the end of 2014, the end of 2013 and the end of 2012, the company's inventory book balances were 308 million yuan, 384 million yuan, 344 million yuan and 217 million yuan respectively. At the end of September 2015, compared with the end of 2014, the book balance of inventories decreased by 75.7337 million yuan, a decrease of 19.72%, mainly due to the carry-over cost of TV drama products and the decrease in the production of new TV dramas. At the end of 2014, compared with the end of 2013, the book balance of inventories increased by 40.2417 million yuan, an increase of 11.70%; at the end of 2013, compared with the end of 2012, the book balance of inventories increased by 127.0343 million yuan, a year-on-year increase of 58.59%, mainly due to the increase in the number of TV dramas filmed in 2013 and 2012.

The prospectus shows that at the end of the reporting period, the amount of inventories was large, mainly inventories related to the TV drama business. If the TV drama cannot be sold, there will be a risk of making provision for impairment.

Relying on government subsidies and tax incentives,

Happy Blue Ocean belongs to the cultural industry. Therefore, the company enjoys a number of preferential tax policies and government subsidies. These subsidies together add a lot to the performance of Happy Blue Ocean.

The prospectus shows that from January to September 2015, 2014, 2013 and 2012, the amount of income tax incentives enjoyed by the issuer was 14.3352 million yuan, 28.4398 million yuan, 44.8941 million yuan and 34.642 million yuan. The impact ratios of the income tax preferential policies on the issuer's net profit were 20.78%, 33.88%, 39.31% and 33.77% respectively. From January to September 2015, 2014, 2013 and 2012, the amount of government subsidies enjoyed by the company was 2.239 million yuan, 25.5801 million yuan, 13.3617 million yuan and 6.8161 million yuan. The impact ratios of government subsidies on net profit (excluding the impact of income tax) were 2.92%, 29.75%, 10.48% and 6.36% respectively.

From January to September 2015, 2014, 2013 and 2012, the amounts of preferential income tax policies and government subsidies were 16.5742 million yuan, 54.0199 million yuan, 58.2558 million yuan and 41.4581 million yuan. The impact ratios of the two incentives on net profit (excluding the impact of income tax) were 23.70%, 63.64%, 48.59% and 40.00%.

The prospectus reminds that after the above preferential policies expire, if they are not extended or the country does not introduce new preferential policies, it will have a greater impact on the company's profits.

Editor: yvette