Zhonghui Film and Television conceals its gambling on Sanqi mutual entertainment and encounters another setback

on November 14, a decision of the stock transfer system exposed the truth of Zhonghui Film and Television's concealment of performance and gambling terms. On the same day, the stock transfer system issued a decision on the official website to take self-regulatory measures against Zhonghui Film and Television and related responsible subjects. This is due to the fact that the company did not disclose the relevant performance betting in time in the stock offering plan in February this year.

on November 14, a decision of the stock transfer system exposed the truth of Zhonghui Film and Television's concealment of performance and gambling terms.

on the same day, the stock transfer system issued a decision on the official website to take self-regulatory measures against Zhonghui Film and Television and related responsible parties. This is due to the fact that the company did not disclose the relevant performance betting in time in the stock offering plan in February this year.

in January this year, shortly after the company was listed on the new third board, the company planned the above additional items. However, this increase comes from the implementation of the debt-to-equity swap. By the only subscription object Suzhou Songhe growth No.2 Venture Capital Center (Limited Partnership) (Songhe Investment), with its debt of 60 million yuan to the company, it was converted into holding 4.918 million shares of the company. Cash is not involved in this increase.

Yuan Ji, chief research officer of Guangzheng Hang Seng, said that in practice, part of the bet is due to the fact that both investors and financiers did not make reasonable expectations for the future development of the enterprise when signing the bet agreement. The performance pressure on the gambling agreement may prompt the enterprise to implement a more risky business strategy, thus pushing the enterprise into a business dilemma.

on the afternoon of November 16, Zhonghui Film and Television issued an announcement confirming that it had received the decision document on self-regulation of the stock transfer system, and said that the company would submit a written commitment within five days of transfer in accordance with the requirements of the share transfer system.

< strong > conceal the terms of betting on performance < / strong >

prior to this, Zhonghui Film and Television officially listed the new third board in March this year, and the above additional financing was completed in May. After the fixed increase, the total share capital of the company is 58.6885 million shares, and the proportion of shares held by Songhe investment is 8.38%.

data show that Sun Lili was vice chairman of Tongzhou Electronics; Hou Xiaoqiang, general manager of the company, was the former CEO of Shanda Literature, and participated in the establishment of Zhonghui Film and Television, becoming the second largest shareholder of the company.

according to documents disclosed by the stock conversion system on the same day, when Zhonghui Film and Television issued shares in February this year, Sun Lili, the actual controller and chairman of the company, signed a bet agreement with Songhe Investment, that is, after the completion of the stock offering, if the net profit of the listed company in 2015 is less than 30 million yuan, Songhe Investment has the right to require Sun Lili or Sun Lili's designated institutions to buy back not less than 85% of the target shares.

after the signing of the above agreement, Sun Lili did not inform Zhonghui Film and Television, resulting in that the company did not mention the above buyback arrangements in the stock offering filing documents and relevant information disclosure documents.

in May this year, Zhonghui Film and Television was aware of the repurchase arrangement in this share offering after receiving the notice from Songhe Investment on the implementation of the above repurchase agreement, but the company still failed to fulfill the relevant information disclosure obligations.

in this regard, the stock transfer system believes that the actions of Sun Lili and Zhonghui Film and Television violated the detailed rules for the issuance of shares in the share conversion system (for trial implementation).

on the same day, Zhonghui Film and Television could not be reached for comment. According to the 2015 annual report previously disclosed by Zhonghui Film and Television, during the reporting period, Zhonghui Film and Television realized operating income of 67.1772 million yuan, an increase of 131.03% over the same period last year, and a gross profit margin of 57.83%, an increase of 12.98% over the previous period. the net profit belonging to the shareholders of the parent company was 14.4312 million yuan, an increase of 262.23% over the same period last year.

in spite of this, compared with the net profit target of 30 million yuan between the company and Songhe Investment, the company has not yet completed half of its performance tasks.

< strong > stranded by A-share listing < / strong >

in addition, Zhonghui Film and Television's original plan to list through A-share listing this year has also been stranded. On October 13, in order to ensure the smooth implementation of the reorganization, Panax Notoginseng Mutual Entertainment adjusted its major asset restructuring plan to remove the Zhonghui Film and Television acquisition plan, which was originally priced at 1.2 billion yuan.

according to the adjusted major asset restructuring plan, the 100% stake in Zhonghui Film and Television will no longer be the target of acquisition. At the same time, the upper limit of funds raised by the company has been reduced from 1.217 billion yuan to 511 million yuan.

on the same day, Zhonghui Film and Television also announced that due to changes in the market environment of the company's industry and some uncertainty, the product strategy may need to be adjusted, and after careful study by all parties involved in the transaction, it was determined that this transaction point was not the best time for acquisition, so it was decided to terminate this important matter.

according to the original reorganization plan, the net asset of Zhonghui Film and Television as of the evaluation base date is 178.8061 million yuan, the evaluation value is 1.2026377 billion yuan, the evaluation value-added rate is as high as 583.18%, and the corresponding transaction price-to-book ratio is 6.73 times.

if the A-share listing plan is successfully carried out, Zhonghui Film and Television shareholders can share the high premium in the capital market.

compared with the year before listing, when Songhe Investment provided a loan of 60 million yuan to Zhonghui Film and Television, it signed a debt-to-equity investment agreement with Sun Lili, Hou Xiaoqiang, and other important shareholders of Zhonghui Film and Television. At that time, it was agreed that Songhe Investment had the right to convert all or part of the loan into an investment in Zhonghui Film and Television within the loan period, and the proportion of shares held by Zhonghui Film and Television was calculated at a valuation of 656 million yuan. In contrast, the valuation of the company has risen rapidly by more than 80% after listing, to as high as 83.32%.

on November 16th, a person from a film and television investment agency said that since the beginning of this year, under the influence of strict regulation, a number of film and television companies' merger and acquisition plans have been derailed. In this person's view, it is mainly regulators who are sceptical about the sustainable profitability of film and television assets.

earlier, Letv Pictures announced that its plan to inject into Leeco was postponed for one year because its performance bet could not meet the standard. Earlier, for the same reason, the restructuring of Wanda cinema line has been suspended.

similarly, from the performance of Zhonghui Film and Television, it also fluctuates violently. According to the Sanqi Mutual Entertainment original reorganization plan, during the reporting period, Zhonghui Film and Television's net profit from 2014, 2015 and January to April 2016 was 3.984 million yuan, 13.819 million yuan and-1.368 million yuan respectively. The related transaction parties promised that the audited net profit after deducting non-recurrent profits and losses in 2016, 2017, 2018 and 2019 would not be less than 30 million yuan, 90 million yuan, 126 million yuan and 170 million yuan, respectively. It can be seen that the performance span of Zhonghui Film and Television before and after M & An is quite large.

as of the first half of this year, Zhonghui Film and Television still had a net loss of 5.9422 million yuan. According to the performance promise, how to realize its annual net profit of 30 million yuan is still a problem.

Edit: yvette