China Film Corporation's listing surged 44% at the beginning, and was suspended in seconds, raising more than 4 billion yuan, making it the largest IPO in the film and television industry

After 12 years, the "Big Brother" of China films has finally been launched. Yesterday, China Film Corporation successfully entered the A-share market and was officially listed on the Shanghai Stock Exchange. On its first day of listing yesterday, the opening price of China films was 10.70 yuan, and finally closed at 12.84 yuan, an increase of 43.95%, with a total market value of 24 billion yuan.

Original title: It has been 12 years since the A-share A-share China films can return to being the boss

, and the "big brother" of China films has finally been listed. Yesterday, China Film Corporation (hereinafter referred to as "China Film") successfully entered the A-share market and was officially listed on the Shanghai Stock Exchange. The company's stock is simply referred to as China Film (N China Film), the stock code is 600977, and the initial public offering does not exceed 467 million shares, and the issue price is 8.92 yuan/share. On its first day of listing yesterday, the opening price of China films was 10.70 yuan, and finally closed at 12.84 yuan, an increase of 43.95%, with a total market value of 24 billion yuan.

In recent years, thanks to the sustained and rapid growth of the national economy and the country's strong support for the cultural industry, the film industry has been in a period of active growth, attracting active injection of various social capital and promoting the rapid development of the film and television industry. There is no doubt that the film and television industry is a pillar sunrise industry for future economic development, and this industry still has much room for growth. Against this background, as the "vanguard" of China's film industry, China Film Corporation, which adheres to the "China Film Spirit" built by generations of filmmakers, has taken an important step towards landing in the capital market and has become the first truly "film group listed in the entire industry chain" in the domestic A-share market so far. Yesterday, Zhang Hongsen, director of the Film Bureau of the State Administration of Press, Publication, Radio, Film and Television, La Peikang, chairman of China Film Corporation, directors Huang Jianxin and Feng Xiaoning, actors Gong Li, Wang Xueqi, Huang Xiaoming, Ning Jing and others gathered on the beach. Zhang Yimou, Chen Kaige, Jiang Wen, Feng Xiaogang and others sent videos to congratulate the stock issuance of "China Films".

It is reported that the funds raised after the listing of China Films will serve the company's strategic development plan, including supplementing working capital for the film and television drama business, investment in digital cinema, digital screening promotion, and purchasing pre-film advertising operation rights for cinemas. The implementation of these projects will not only ensure the company's good development trend, but also further increase the company's market share and drive the steady progress and sustainable development of the domestic film industry.

According to previously disclosed information, the funds raised exceeded 4 billion yuan, making it the largest initial public offering in China's entertainment industry to date. Well-known filmmaker Gao Jun believes that the successful listing of China Film is not only a major breakthrough in the standardization of China's film industry, but is also expected to set off a "listing craze" for state-owned film and television companies.

It is reported that following the footsteps of China Film Co., Ltd., affiliated to Jiangsu Radio and Television, and Shanghai Film Co., Ltd.(Shanghai Film Co., Ltd.), backed by Shanghai Film Group, issued A shares on July 26 and July 28. Among them, Happy Blue Ocean launched a listing subscription on the GEM of the Shenzhen Stock Exchange, and plans to issue 77.63 million new shares at an issue price of 6.62 yuan/share, raising approximately 500 million yuan. Shanghai Film Co., Ltd. is listed on the Shanghai Stock Exchange and plans to publicly issue no more than 93.5 million shares and raise approximately 968 million yuan.

In the past 12 years, the "ambition" of "Chinese Film"

has changed its status. Currently, the domestic film production industry is dominated by private companies. Whether China Film can regain its leading position through listing is still unclear, but judging from the change of its stock name from the original "China Film Shares" to "China Film", it is not difficult to see China Film's ambition to return to the top of the industry. The industry also believes that from April this year to the summer vacation, the box office dropped significantly month-on-month, making the film industry very worried. Everyone is very concerned about whether China Film Corporation can become a turning point in the China film market after its listing, revitalize the China film market, and embark on the path of rapid growth again. The US media also believes that the listing of China Film Corporation will reduce its reliance on Hollywood blockbusters.

La Peikang, chairman of China Film Co., Ltd., said yesterday that in recent years, China Film Co., Ltd. has attached great importance to the development of the four major business segments of film and television production, film distribution, film screening and film and television services, and the layout of the entire industry chain has achieved remarkable results. With this A-share listing, China Film Co., Ltd. will achieve a strong alliance between state-owned enterprises and the capital market, open a new era for state-owned film groups, and strive to launch two more film and television masterpieces with both benefits.

As early as 2004, China Film Group, the parent company of China Film Corporation, had a listing plan and wanted to integrate high-quality assets to list in Hong Kong. However, due to relevant policy adjustments, the listing plan had to be suspended. Around 2008, China Film Group had great hopes of becoming the "No. 1 domestic film stock", but it was eventually removed by Huayi Brothers, which went public in 2009. In 2010, China Film Corporation was established with a registered capital of 1.4 billion yuan. It was established by China Film Group in conjunction with seven other strategic investors. China Film Group accounted for 93% of the shares, and the other seven companies each accounted for 1% of the shares. News of "listing" continued to spread since then, but it was not until yesterday that "China Films" was finally officially listed on the Shanghai Stock Exchange.

Industry analysis

how "China films" use the capital market to break through?

Yesterday,"China Film" was officially listed on the Shanghai Stock Exchange. On the first day of listing, China films rose 43.95%, with a total market value of 24 billion yuan, driving the entire media sector to strengthen. But will this be a flash in the pan? Where is the future appreciation space for "China Films"? As the absolute "big brother" of China's film industry, how will China Film Corporation use the capital market to break through?

Advantage

The distribution of imported films is the biggest advantage.

According to the prospectus of "China Films", the company has led or participated in the distribution of 790 domestic films and 223 imported films in the past three years, with a market share of 58.27%. Among them, domestic films achieved a box office of approximately 32.742 billion yuan, accounting for 58.41% of the country's total box office of domestic films during the same period.

Distribution is the biggest advantage of "China films," especially the distribution of imported films. Since China Film Company and Huaxia Company are the only two companies in China that have the right to distribute imported films, if imported films enter China,"China Films" will inevitably participate in the distribution. In the past three years,"China Films" has dominated or participated in the distribution of 223 imported films, achieving box office of 22.892 billion yuan, accounting for 58.07% of the total box office of imported films nationwide during the same period. In 2013, 2014 and 2015, the proportion of distribution revenue from imported films was 36.50%, 46.59% and 43.86%, respectively, and the proportion of gross profit was 23.20%, 33.77% and 37.17% respectively.

The prospectus shows that in terms of domestic films, most "China films" adopt the joint distribution, agency distribution, and assisted distribution model. Co-released films include "Monster Hunt,""Lost in Hong Kong,""To Our Lost Youth" and many other films. And like Huayi Brothers, Light Media, etc., most of the advantages of film and television drama companies are mainly in the production process.

Predicting

that there is a large upside for the stock price

. Regarding the listing of "China Films", a research report released by Industrial Securities stated that the company has channel advantages and intra-system advantages. First, under the protection of policies, the imported film distribution market is monopolized; secondly, the actual controller is the State Administration of Radio, Film and Television, which brings advantages within the system. The film and television industry has the characteristics of high policy barriers, and the State Administration of Radio, Film and Television implements comprehensive review and control. The company's growth in the radio and television system allows the company to familiarize itself with the operating rules of the system and reduce policy and operational risks; in addition, the resource appeal of the "China Film" brand for 65 years. The company's issue price is significantly lower than the average valuation level of the film and television drama industry for the same period, and there is a large room for upside in the stock price.

Breakthrough

mergers and acquisitions may become a catalyst for the growth of China films

. The prospectus shows that as of the end of 2015, the total assets of "China Films" reached 10.891 billion yuan, and the net assets reached 4.794 billion yuan. Judging from the prospectus,"China Films" are not among the best in the industry in terms of asset size or profitability. Its asset scale is not as good as that of Wanda Cinema and Huayi Brothers, which have heavy asset models, and its operating income is also quite different from Wanda Cinema.

Wanda Cinema Line, Huayi Brothers and Enlight Media were not large at the beginning of their listings, but they expanded rapidly with the help of the capital market. So, how will "China Films" after listing use the capital market to break through?

An analyst at CITIC Securities who has long been concerned about cultural media said that compared with the frequent mergers and acquisitions in the capital market such as Wanda Cinema Line, Huayi Brothers and Enlight Media in recent years, due to the mechanism,"China Films" is almost unknown. After listing, there will be greater room for operation in terms of business investment, content production and other aspects. Whether it is cooperation through mergers and acquisitions or equity, it is difficult for "China films" before listing.

Relying on China Film, a brand built for decades, it is an expectation in the film and television media field in China to seek a breakthrough in the capital market and build a film group that can compete with Hollywood. In addition, after China Film Corporation's listing, it will make great improvements in information disclosure and corporate governance, which will undoubtedly benefit the mainland film market. This was reflected in the strengthening of the film and television media sector that day.

Cultural Narration of

China Films, Money doesn't mean everything.

In 1999, China Film Group had just been established. At that time, Yu Dong was still a grassroots business leader of China Film Corporation. He would call the bosses of various provincial and municipal distribution companies every day to distribute a domestic film, begging his grandparents to tell him that to release a commercial film with good box office prospects, he often had to add a theme film without "money scenes."

At that time, in the eyes of teachers in the Department of Management of the Beijing Film Academy, there was no real theater system in China, only running film lines; China's film market was still in its infancy. The huge China film market was only supported by New Year films and imported blockbusters.

The irregular film market and the backward management of film companies all caused the production and distribution of China films to fall into a bottleneck at that time. The new generation of filmmakers and the older generation of China filmmakers have created a "generation gap" not only in terms of film art concepts, but also in terms of film operation concepts. How to break through was a huge problem that tested the new generation of film market people at that time.

At that time, money was not everything for this swaddling "baby". Without money was indeed impossible. Because without a benign and scientific film market system, it is impossible to ensure the production and circulation of excellent films, which ultimately leads to the stagnation of the entire film industry.

A few years later, Yu Dong has become the boss of Bona Films, which is listed in the United States, and China Film Group has also entered A shares through China Film Corporation. It is no longer new for capital to enter the China film industry, but has China films really established a scientific modern management system, and has the three major links of film production, distribution and screening been unimpeded? Are we really following the rules of the market?

The influx of capital will surely bring an influx of new people in the China film market, which will inevitably have an impact on the original power-behind the capital game is game, and behind the game is innovation: innovation in concepts, innovation in art and innovation in technology. Only by innovation can China films survive for a long time, and a small "ticket replacement" will not cause filmmakers to be dejected and panicked. But in the face of such a wave of innovation brought by capital, are China filmmakers ready again?

Everything will wait and see.

Editor: yvette