Crossover Pictures plans to list Shanghai Film Co., Ltd. on the New Third Board as its second largest shareholder

Recently, Chongqing Crossover Film Co., Ltd., the largest local cinema in Chongqing, released a draft listing specification application and plans to list the New Third Board. It is understood that Shanghai Film Co., Ltd.(hereinafter referred to as Shanghai Film Co., Ltd.) increased its capital to Cross-Border Cinema by 45 million yuan last year, becoming its second largest shareholder. At present, Cross-border Pictures, which has obtained film distribution qualifications, plans to expand the number of theaters to 25 within two years and expand nationwide. It also plans to enter film production in the future.

Zhang Zhi, who started selling home appliances, plays movies across borders, and his theaters will enter the capital market. Recently, Chongqing Crossover Film Co., Ltd.(hereinafter referred to as Crossover Film), the largest local cinema in Chongqing, released a draft listing specification application and plans to be listed on the New Third Board. It is understood that Shanghai Film Co., Ltd.(hereinafter referred to as Shanghai Film Co., Ltd.) increased its capital to Cross-Border Cinema by 45 million yuan last year, becoming its second largest shareholder. At present, Cross-border Pictures, which has obtained film distribution qualifications, plans to expand the number of theaters to 25 within two years and expand nationwide. It also plans to enter film production in the future.

The film market is developing rapidly, and theater competition has become white-hot. The reporter's investigation learned that several major cinema giants stationed in Chongqing have made efforts in the capital market to build cinemas in Chongqing, striving to get a more piece of the pie.

The

listing statement shows that Crossover Pictures was established on January 5, 2011 and was restructured into a joint-stock limited company on March 30 this year with a registered capital of 27.042857 million yuan. Its main business is film screening and related commodity sales. The residence is located in 5-4, Building 2, No. 16 Qixia Road, Northern New District. The host brokerage firm is Southwest Securities. In 2015, Crossover Pictures achieved revenue of 89.89 million yuan, net profit of 7.43 million yuan, and earnings per share of 0.35 yuan; in 2014, revenue of 35.91 million yuan, and net profit of-1.09 million yuan.

The actual controller of Crossover Pictures is the legal representative Zhang Zhi, who holds 64.23% of the shares. Zhang Zhi is 53 years old. He graduated from Southwestern University of Finance and Economics in June 2012, majoring in capital operation with an EMBA degree. From October 1999 to present, he has served as executive director of Lingzhi Industrial Co., Ltd. in Wushan County; in January 2011, he founded Crossover Film. It is worth mentioning that in August 2015, Shanghai Film Co., Ltd. invested 45 million yuan to increase the capital of Crossover Pictures, of which 8.112,857 million yuan was registered capital and 36.887,143 million yuan was capital reserve, equivalent to 5.55 yuan per yuan of registered capital. The registered capital of Crossover Pictures also increased from 18.93 million yuan to 27.042857 million yuan, with Shanghai Film Company shares accounting for 30%, becoming its second largest shareholder.

According to informed sources, Shanghai Film Co., Ltd. is optimistic about the management and mechanism of Crossover Pictures. It originally planned to hold a stake in Crossover Pictures, but after negotiation, it changed to a shareholding. Shanghai Film Co., Ltd. also fully trusts the management team of Crossover Pictures and only sends two directors to the board of directors and does not participate in the daily operation and management of the company.

Selling home appliances to showing movies crosses the border. Boss plays "crossing the border"

In fact, Zhang Zhi's entry into the film industry is also a "crossing the border". Zhang Zhi introduced that at the age of 30, he left a state-owned enterprise and began to engage in home appliance sales. After more than ten years of hard work, he became the general agent of Haier Electric in Chongqing.

In 2008, Zhang Zhi discovered that although he had already occupied a place in the industry, home appliance sales had hit the ceiling due to the ubiquitous offline retail terminals of Suning and Gome.

In 2009, a friend of Zhang Zhi who joined a theater line told him that a theater in Yubei was seeking transfer, but his theater line did not fancy the theater. Compared with home appliance agencies, movie theater projects do not need advance funds, no credit sales, no logistics, no warehousing, no after-sales, and still have a gross profit of about 50%. In addition, the "home appliances going to the countryside" policy was relatively well implemented. Zhang Zhi had spare money, so he entered the theater industry.

It is reported that the movie theater that Zhang Zhi took over had a turnover of 8.9 million yuan in the first year and achieved profits. The turnover of the second year was 11 million yuan and the turnover of the third year was 14 million yuan. With a good start in his first cinema, Zhang Zhi expanded rapidly and invested in four cinemas in Beibei, Yongchuan, Wushan and Pi County, Sichuan. In 2011, he founded Crossover Films. Cross-border Pictures now has 11 theaters, including 9 theaters in Chongqing. Statistics from Yien.com show that Crossover Pictures has ranked among the top four cinema market in Chongqing and is also the largest cinema in Chongqing.

According to the plan, Cross-Border Pictures plans to expand the number of theaters to 25 within two years and expand nationwide.

Promoting expansion and upgrading brand theaters are targeting the capital market

and directly financing through the capital market, which is undoubtedly a good way to support the expansion of theaters. Zhang Zhi admits that leveraging the capital market can not only standardize corporate governance, but also promote the development and growth of enterprises.

In fact, taking advantage of the capital market, many colleagues in Crossover Pictures are actively planning. Recently, the reporter's investigation learned that among the top eight cinemas in Chongqing, except for the market leader UME Cinema Group in Hong Kong and Chongqing Jiayu Studios, which have not yet made a clear statement, the remaining six have landed or are planning to land in the capital market.

For example, Xingmei International Studios has long been included under Hong Kong stock Xingmei Holdings (00198.HK). Poly Culture (03636.HK), the parent company of Poly Wanhe Studios, was listed on the main board of Hong Kong on March 6, 2014, raising HK$2.567 billion. Wanda Cinema was listed on the Shenzhen Stock Exchange's Small and Medium-sized Board on January 22, 2015, becoming the first cinema company to register A-shares, raising 1.281 billion yuan. The Dadi Theater Line from Guangdong will be listed on the New Third Board on April 25 this year. Guangzhou Jinyi Film and Television Media Co., Ltd., where Chongqing Jinyi Studios is located, is also planning to list A-shares. However, it did not make a good move and was cancelled by the China Securities Regulatory Commission on November 28, 2014.

Fan Chaozhong, director of China International Capital Certified Public Accountants, analyzed that the benefits of entering the capital market are well known. They can obtain convenient financing channels and greatly enhance brand awareness.

Market expansion Cinema giant Chongqing is

racing around the country. Like the whole country, the Chongqing film market has shown explosive growth. In 2015, our city screened a total of 1.77 million films, with 37.69 million viewers, and a total box office of 1.25 billion yuan, an increase of 34.97%, 41.31%, and 41.96% respectively compared with 2014. In 2011, there were only 490,000 movie screenings in our city, with 12.535 million viewers and box office revenue of 400 million yuan.

Yesterday, He Hongyuan, director of the Film Department of the Chongqing City Cultural Commission, analyzed that one of the reasons for the continuous growth of urban movie box office in our city is the expansion of theaters, which has promoted balanced and rapid growth of box office.

According to reports, in 2014, our city achieved full coverage of county-level cinemas. In 2015, districts and counties added 17 cinemas. The strength of the remote suburban screening market has increased. District and county cinemas contributed 39.35% of the city's total box office. As of the end of December 2015, there were 161 regular film theaters in the city, with 1052 screens, and a screen coverage rate of 30,400 people per block, which is 31.38% higher than the national average of 1 block per 44,300 people.

According to the city's "Thirteenth Five-Year Plan", 50 new cinemas will be added, and the total number of screens at the end of the period will reach 1,200 to 1,500.

At present, our city's major cinema giants are also racing around, striving to gain a share of the fast-developing film market.

Fang Yuan, the boss of Chongqing's cinema market, told reporters that this year plans to open new stores in Nan 'an District and Dazu District respectively, but the specific locations are not convenient to disclose because many colleagues are staring at them, and often wherever they go, there are colleagues next to them. He Yingbin, manager of the business department of Poly Wanhe Studios, said that eight cinemas will be opened this year, 3 to 4 of which will be in Chongqing, and the Jiaochangkou branch of Poly Studios will open in May this year. Huang Kaiping, the relevant person in charge of Wanda Studios in Chongqing, said that he is optimistic about the Chongqing market, but the store opening plan needs to be uniformly released by the headquarters of the listed company and is not convenient to disclose it.

Tian Ying, a professor at Chongqing Normal University, believes that since cinemas are fully competitive industries and rely on market regulation, and the rental period of cinemas is generally 15 years, it is very important for the location of cinemas, and various factors such as radiation power and consumption power must be fully considered. In addition, we must not only look at the present, but also look at the future, prepare for rainy days, and think about the transformation and upgrading after the dividend period of rapid development of the film market.

Reporter: In an era when capital is king, Cross-border Films is developing so fast. What are the main competitive advantages?

Zhang Zhi: We mainly promote the quality of theaters, which is for movie enthusiasts. For example, Chongqing currently has 11 IMAX (Giant Screen Film) screens, and there are 4 across the border. In the competition of movie theaters, the trend of homogenization will become more and more obvious, so we must also strive to make differentiation. At present, our cinemas in Jiangbeizui, Automobile Expo, and Shiqiaopu are difficult to be replaced by opponents within a radius of 5 kilometers.

Reporter: What is the current funding situation? Can it support rapid expansion? What is the national layout?

Zhang Zhi: Yes, our investments are divided into our own funds, bank loans, etc. In addition, we will also participate in funds. After the listing of the New Third Board, we will also carry out targeted capital increase and equity financing. We are optimistic about the first-tier cities in Beijing, Guangzhou and Shenzhen. Currently, there are 6 cinemas in Guangdong, and the Guangzhou Giant Screen Cinema will open within the year.

Reporter: Film producers are the production chain, distributors are the general agents, theaters are wholesalers, and cinemas are retailers. What is the strategic plan for the future of crossing the border?

Zhang Zhi: In addition to expanding its share of film screenings in the future, Crossborder Films will also extend upstream of the industrial chain. The company has now obtained film distribution qualifications and with the support of Shanghai Film Co., Ltd., will actively participate in the film distribution business in Southwest China in the future. In addition, the company also plans to get involved in film production to form a complete business chain.

Editor: vian