Huawei plans to 1.3 billion merger and acquisition of the two companies to invest 800 million in film and TV series project film and tourism coordinated development

it is reported that in 2015, Huawei started and completed the comprehensive acquisition of Zhejiang Neverland Star Park, and the company has excellent ability and experience in planning, creating, producing and issuing film and television products. Up to now, the company has invested, produced and distributed a number of TV dramas. Among them, romantic TV dramas such as "Qianshan Twilight Snow", "Ruyi", "the most Beautiful time", "Golden Marriage", "the Man catching the Rainbow", "just like you", "the empty and lonely spring scenery in the courtyard is about to die" and other romantic TV dramas are loved by many young people. The number of hits on the network of the masterpiece "Qianshan Twilight Snow" exceeded 1.6 billion, "Jinyu Liangyuan" exceeded 3 billion, and "I like you" exceeded 4 billion. The popular TV series "Qianshan Twilight Snow", "Ruyi", "the most Beautiful time" and "just like you" ranked first in the ratings at the same time. "Golden Marriage" launched at 8: 00 in Taiwan on August 12, 2015. The TV series, which won excellent reputation when it premiered in the mainland, has also won praise from Taiwan audiences. In order to further promote the integrated development of the company's film and television, online drama, games and animation business, the company has formulated a series of related innovation systems, creating favorable institutional conditions for further introduction and training of senior film and television talents.

Huawei Company said that through the implementation of this project, it can increase the output and market share of the company's high-quality film and television works, play a certain role in promoting the development of the company's related business, and is an important measure to realize the company's development strategy. Complying with the development trend of the cultural industry and rapidly improving the scale and level of film and television business, the company continues to operate and create content IP, which is the core resource for the company's development, and financial strength is one of the important guarantees for the introduction, creation and development of content IP, especially for the investment scale and quality of film and television works.

with the integration of the Internet and the cultural industry, the increase of cultural consumption demand of people, especially young people, the increase of the number of cinemas and screen screens, and the support and encouragement of national policies, the film and television industry will usher in a new round of opportunities for sustained growth in the future. In order to cope with the changes in the competition pattern of the industry and give full play to its own advantages, the company needs to vigorously increase the output of high-quality film and television works on the basis of the existing scale, and reflect the needs of contemporary society for the development of cultural products by creating high-quality film and television works. grasp the development trend of the industry, so as to further enhance the company's market competitiveness and improve the company's market share in the film and television industry.

< strong > Game Industry layout: movie Game Collaborative Development IP Resource sharing < / strong >

according to Huawei shares, the company will use the proposed shares and pay cash to purchase the 100% equity interest in Zongyi and YouLetong, with transaction consideration of 860 million yuan and 450 million yuan respectively, of which 30% is cash consideration totaling 390 million yuan. The total consideration of the shares is 920 million yuan, which is paid by 36.35 million shares issued at 25.19 yuan per share. At the same time, a gambling agreement has been added to the deal, which promises that the net profit in 2016,2017 and 2018 will not be less than 66 million yuan, 82.5 million yuan and 103.2 million yuan respectively. You Letong also promised that the net profit in 2016,2017 and 2018 would not be less than 36 million yuan, 46.8 million yuan and 58.5 million yuan respectively.

according to the plan, Palm Entertainment World is mainly engaged in the research, development and operation of online games and mobile games. At present, it has launched a number of mobile phone games and web game products one after another, and it is currently researching or testing six game products, of which it plans to launch 2 game products in January 2016, 1-2 game products in the first quarter of 2016, and access to well-known IP resources such as "Ghost blowing Lamps". Related game products are in the stage of research and development.

after the completion of this transaction, the following synergy will be produced on the basis of the stable development of the original business of both sides:

(1) Game issuance and operation: the first wave of wholly-owned subsidiaries of listed companies is mainly engaged in the production, development, operation and promotion of mobile online games, with strong domestic distribution and operation capabilities, but the R & D capability is relatively weak. The target of this transaction is to entertain the world with strong R & D capabilities and overseas market issuance capabilities. After the completion of this transaction, the existing game section of the listed company has formed a good complementarity with the entertainment world. At the same time, the game operation and promotion that first spread to the entertainment world is mainly online display promotion, and Letong mainly adopts the push screen promotion of offline business. After the completion of this transaction, it enriches the promotion mode of game marketing, realizes the sharing of online and offline promotion channels and customer resources, realizes the first wave, entertainment and Letong cooperation, and maximizes commercial value.

(2) Game product research and development: after the completion of this transaction, the listed company and the original game research and development team will remain independent in terms of organizational structure, but in terms of mutual assistance and cooperation in their respective game product development technologies, it will be carried out under the coordination of the Group Integration Management Department. Thus, the listed companies and the entertainment world can make use of each other's existing successful game modes and numerical setting systems that have been verified by the market, and give full play to their respective development advantages in specific fields. and then shorten the game development time, improve the quality of game products, and ensure the success rate of the game.

(3) sharing of IP resources: with the emphasis on intellectual property protection in the game field, the cost of obtaining high-quality IP resources has become a major cost in game research and development. With the rising price of high-quality IP resources, on the one hand, R & D enterprises need strong financial support to obtain IP, on the other hand, companies that have access to IP need to make full use of IP to maximize the value of high-quality IP. By virtue of its listing platform, listed companies have strong financial strength and the ability to obtain more high-quality IP, so as to support the development of subsidiaries in listed companies. At the same time, the first wave of listed companies acquired during the reporting period and Zhejiang Neverland Star Park Film and Television Culture Co., Ltd. are cultural enterprises operating with high-quality IP, and the listed companies already have a wealth of high-quality IP. After the completion of this transaction, the listed company will hand over the high-quality IP to the target company that matches the R & D direction to develop and operate, which can maximize the value of high-quality IP and improve the ecological chain of IP cultural operation industry of listed companies. Improve the market competitiveness of listed companies.

data show that Letong is mainly engaged in mobile Internet advertising and marketing services, mainly aimed at the promotion and marketing of mobile game products. At present, it has provided thousands of successful promotions for various types of mobile game products. Every year, it provides promotion, payment, data and other closed-loop services for hundreds of millions of games. According to the performance commitment, the opposite party, Shi Xiaohua and Li Na, promised that the amount of net profit realized by Letong in 2016,2017 and 2018 (the amount of net profit is based on the net profit attributable to the shareholders of the parent company after deducting non-recurrent profits and losses) is not less than 36 million yuan, 46.8 million yuan and 58.5 million yuan, respectively.

Palm Entertainment World was founded in September 2013, is a mobile game research and development, operation company, has developed more than 30 games since its establishment There are mainly "Nordic Goddess", "Tribal Legend 2", "Spring and Autumn Warriors", "Da Ji is coming", "Bug fighting", "Alloy Fighter", "angry Battle of the Pacific", "Love Hyun Dance", "collapse Cartoon King", "War 3D of the Devil God", "Love Lianmeng every Day", "Chariot", "Steam era", "Ghost blowing Lamps to touch Golden School Lieutenant", "Sword Spirit unparalleled" and so on. With the further intensification of market competition in online games and mobile games, the development strategy has been re-established in the second half of 2015, which has been transformed into a game R & D and operation strategy based on "shadow games interaction, intensive cultivation and focus on fine products".

after the completion of this transaction, Palm Entertainment and Leitong will become wholly owned subsidiaries of the listed company. Listed companies will complement each other with their advantages on the basis of maintaining the independent operation of the target company, and the two sides will achieve better cooperation in development strategy, follow-up game product research and development, high-quality IP resources and distribution channels. Prior to this, Huawei also acquired the first wave and Zhejiang Dream Star Park Film and Television Culture Co., Ltd. The first wave is also mobile game research and development, operating companies, mainly in the domestic market, while the entertainment world in addition to research and development, in the overseas market also has a better distribution capacity, can complement the first wave. Zhejiang Dream Star Park Film and Television Culture Co., Ltd. is rich in IP resources, the combination of a number of companies, can achieve mobile games IP, research and development, operation, promotion of a complete industrial chain.

Huawei shares said that through nearly three years of development, the company has accumulated relatively rich experience in the development of the Internet culture industry, has formed a game, film and television and animation "troika" to drive the company's pattern and development of the industrial layout, has and is forming a group of teams with strong professional ability, active creative thinking and management, and has formulated a series of management systems suitable for the development of the cultural industry. In the past year, the company's film, television and game revenue has exceeded 2% of the company's total revenue, making a significant contribution to the revenue of the main business. At the same time, the film and television business, as an important engine of the company's future development, can further promote the growth of games, animation and related derivative products through the synergy of film and game interaction. Through this acquisition, the company's high-quality IP will be further enriched, the industrial layout of the company's multi-connected entertainment will be expanded, and the company will develop into an integrated and diversified Internet culture company.