Huayi received 35 times premium from Zhejiang Changsheng: Want to make up for the shortcomings of TV dramas

Huayi Brothers announced plans to buy a 70 per cent stake in Zhejiang Changsheng, owned by Zhang Guoli, for 252 million yuan. Industry insiders believe that the company hopes to recover from the sharp decline in the TV series business. The reporter noticed that at present, Zhang Guoli's studio is actually operated by & ldquo; Beijing National Changsheng & rdquo;, but its relationship with Zhejiang Changsheng is not disclosed in the announcement. It is not known whether Zhang Guosheng will take Zhejiang Changsheng as the only TV drama creator in the future. It is worth noting that Zhejiang Changsheng was established only three months ago, and the transaction premium of up to 35 times is also far higher than that of the previous Great Wall Film and TV backdoor listing.

< strong > 250 million acquires 70% equity interest in Zhejiang Changsheng < / strong >

yesterday, Huayi Brothers announced that in order to strengthen the development of TV series business, it plans to buy a 70% stake in Zhejiang Changsheng Film and Television production Company (hereinafter referred to as Zhejiang Changsheng) under famous artist Zhang Guoguo for 252 million yuan. At the same time, the acquiree will also buy shares held by Wang Zhongjun and Wang Zhonglei, the actual controllers of Huayi Brothers, for 216 million yuan and lock them up for three years.

according to Dongyang Bureau of Industry and Commerce, Zhejiang Changsheng was established on May 23, 2013, with a registered capital of 10 million yuan and legal representative Zhang Guoli. At present, Nanjing Hongli Xingheng Culture Communication Co., Ltd. (hereinafter referred to as Hongli Xingheng) holds a 90% stake, and Nanjing Jiamu Culture Communication Co., Ltd. (hereinafter referred to as Jiamu Culture) holds a 10% stake.

data from Nanjing Bureau of Industry and Commerce show that Hongli Xingheng was established on May 8 this year, and its legal representative is Zhang Guoli, while Jiamu Culture was established this year by, and its legal representative is Ma Baohua. The reporter learned that Ma Baohua has served as the producer of many films starring Zhang Guoli, and is also the legal representative of Beijing National Changsheng Film and Television Culture Communication Co., Ltd. (hereinafter referred to as Beijing National Changsheng) under Zhang Guoli.

& ldquo; Zhang Guoli is a national first-class actor and director. This acquisition actually means the formal marriage of Zhang Guoli and Huayi Brothers. & A media industry analyst at rdquo; told reporters.

the reporter found that there are still a lot of undisclosed information about this acquisition of Huayi Brothers.

Sina Entertainment data shows that at present, Zhang Guoli's studio is actually operated by & ldquo; Beijing National Changsheng & rdquo;. It was founded in 1996, and over the past 17 years, it has created more than 20 pieces, such as "personal visit to Kangxi", "Iron Tooth Copper teeth Ji Xiaolan", "Buyi magistrate" and so on, totaling more than 600 episodes of excellent TV series. However, when the listed company acquired Zhejiang Changsheng, it did not disclose its relationship with Beijing National Changsheng, and the announcement did not elaborate on whether Zhang Guoyi would take Zhejiang Changsheng as the only TV drama creator in the future.

in this regard, the reporter contacted the securities department of Huayi Brothers, and the phone was not answered as of press time. Subsequently, the reporter contacted Ms. Shao of the National Changsheng propaganda Department in Beijing through various channels and was told that she was at the scene of the press conference, and the other party asked to contact again later. The reporter verified again before the release, but her phone was not answered.

< strong > want to make up for the deficiency of TV series < / strong >

& ldquo; the implementation of this project is the need of the company to strengthen the development of TV drama business, helps the company to improve the ability of TV drama production and distribution, and plays a positive role and influence on the development of TV drama business. By strengthening the TV drama business, the company can effectively improve the company's revenue and improve the company's core competitiveness. & rdquo; in the announcement, Huayi Brothers so explained the reasons for the acquisition of Zhejiang Changsheng.

Huayi Brothers China News showed that due to the reduction of two new TV dramas issued in the first half of the year and five TV dramas that realized revenue, the company's TV series business revenue dropped by 37.06% compared with the same period last year, and the proportion of revenue also dropped to 11.57% from 30.61% in the same period last year. In this regard, Yang Yang, an analyst at Yien Consulting, pointed out that Huayi TV series business and film business are far apart, especially in the past two years, few well-known dramas have been produced, and the influence of dramas in the industry has declined. Huayi TV series is a deficiency in the whole company's business system.

it is worth mentioning that the semi-annual report shows that the gross profit margin of Huayi Brothers TV series business fell 33.7 percentage points year-on-year to 13.7%, far below the industry average. In the same period, the gross profit margins of similar businesses of Huatze Film and Television, Warsaw Bainer and New Culture were 48.70%, 56.16% and 37.75%, respectively.

judging from the TV series shooting and distribution plans that Huayi Brothers has made for the second half of the year, only "feelings of the past" and "my son is a wonderful work" have been turned on, and it is uncertain whether they will be released within this year. The remaining eight films are scheduled for release in 2014 at the earliest.

& ldquo; Changsheng Film and Television will have Wu Xiubo's "Locust Tree blossoms" this year, and TV dramas such as "Love is the most Beautiful" co-starring Zhang Guoli and Jiang Wenli will be released this year, which is expected to contribute more revenue this year. & rdquo; Shenyin Wanguo media industry analyst pointed out. Huayi announcement also shows that in addition to the above-mentioned TV series that have already been filmed, Zhejiang Changsheng also plans to launch about 400 high-quality TV dramas in the next five years.

In addition, the reporter learned that before the listing of Huayi Brothers, Zhang Guoli almost became a shareholder, and this cooperation can be regarded as a continuation of ldquo; & rdquo;.

after Feng Xiaogang co-shot "Mobile phone" with Zhang Guoguo in 2004, Feng's first contract with Huayi Brothers expired, and Feng and Zhang joined hands to set up a company, according to China Weekly. Later, Huayi Brothers recruited Feng Xiaogang before going public. At the same time, he also talked with Zhang Guogang about joining for a year and a half, and said that ldquo; holds a higher stake than Feng Xiaogang & rdquo;, but in the end Zhang Guogang chose to give up because of too much pressure on ldquo; production & rdquo;.

< strong > the premium rate is much higher than that of similar acquisitions < / strong >

data show that at present, Changsheng in Zhejiang has total assets of 10 million yuan and total liabilities of 0 yuan, while its 70% equity is valued at 252 million yuan, corresponding to a 100% equity valuation of 360 million yuan. On this basis, Huayi Brothers' acquisition premium is as high as 35 times. The reporter learned that A shares have two recent acquisitions for TV drama production companies, and their premium levels are far lower than the above-mentioned acquisitions of Huayi Brothers.

data show that last week, China Television Media announced plans to reorganize Jin Yingma, which was founded in 1993 as a professional film and television production company integrating planning, production, publicity and distribution. Its main business covers film and television dramas, artist agents, and so on. It has produced high-quality TV dramas such as "Dazhaimen" and "Home, Nth Power". From 2011 to 2012, the company as an executive producer or exclusive set of TV dramas reached 148 episodes and 160 episodes respectively. The deal is priced at 1 billion yuan, a premium of only three times.

A month ago, Great Wall Film and Television also planned to land A-shares through Jiangsu Hongbao. Most of the TV series produced by the former were broadcast on satellite TV or CCTV in the first round, and they worked closely with Hunan Satellite TV. He has produced a number of boutique works such as "the Secret History of Princess Taiping", "Heroes of the Sui and Tang dynasties 2" and "Hero Fang Shiyu". In 2011-2012, he produced an average of six boutique dramas, with 269 episodes and 283 episodes respectively. In this restructuring, Great Wall Pictures' book assets of 600m yuan are estimated at 2.2 billion yuan, at a premium of only three times.

Why is Huayi Brothers willing to pay such a high price? According to some analysts, 70% of the core resources of TV dramas or film and television companies are externalized, and the acquisition of a film and television company does not have access to the core resources of directors, editors and actors, which is also the reason why many listed companies are unwilling to choose to acquire film and television companies. In this regard, Peng Kan, director of R & D and consulting of Lezheng Media, believes that the core of this acquisition lies in Zhang Guoli. Huayi major shareholder and Zhang Guoguo can be regarded as old acquaintances. Zhang Liguo has been involved in many Huayi film projects before, and Huayi wants to cooperate with Zhang Guoli through this deal.

Yang Yang, an analyst at Yien Consulting, believes that after the acquisition of a company owned by well-known director and actor Zhang Gui, Zhang Guo himself will have a certain say in Huayi Brothers'TV series business in the future. Zhang Guoli has a strong personal brand in the film and television circle, which is very rich in resources, and its contracted artists will also form resource reciprocity with Huayi, which will undoubtedly benefit Huayi.

however, an industry insider who spoke on condition of anonymity told reporters that at present, the competition in Chinese TV dramas is becoming increasingly fierce. Although Zhang Guoli continues to produce works, since the release of "Golden Marriage" in 2007, Zhang Guoli has been short of popular TV dramas. The acquired company basically operates around Zhang Guoli, and the company will not be doing very well.