Less than 70% of the performance commitments of 100 mergers and acquisitions have been achieved, and the popularity of film and television mergers and acquisitions has turned cold

According to data, last year alone, there were nearly 100 mergers and acquisitions in the film and television category, involving an amount of more than 50 billion yuan. However, data as of the first half of this year shows that the stock trend of relevant companies has decreased by 10% year-on-year, and many mergers and acquisitions have been rejected by the regulatory authorities, which seems to show signs of cooling.

Original title: Performance commitments are achieved with different performance commitments. The popularity of film and television mergers and acquisitions has turned cold

and booming, and its demise has also disappeared.

The film and television mergers and acquisitions that began in 2013 finally reached its peak in 2015 after two years of vigorous development. According to wind information data, last year alone, there were nearly 100 mergers and acquisitions in the film and television category, involving an amount of more than 50 billion yuan.

However, data as of the first half of this year shows that the stock trend of relevant companies has decreased by 10% year-on-year, and many mergers and acquisitions have been rejected by the regulatory authorities, which seems to show signs of cooling.

Looking back at the existing film and television mergers and acquisitions, the reporter sorted out and found that in the past, film and television companies that acquired at high premium could achieve less than 70% of the targets when making relevant performance commitments.

In this regard, Analysys Film analyst Huang Guofeng said that the frequent occurrence of film and television mergers and acquisitions has, on the one hand, brought appreciation of market value management to listed companies, and on the other hand, spawned capital bubbles."After the regulatory authorities deliberately tighten, relevant behaviors will turn cold in the future."

Performance commitments achieved less than 70%.

While domestic movie box office records hit record highs, the capital market's favor for film and television companies has become increasingly emotional. This sentiment eventually transformed into "purchasing power" and opened the door for listed companies to purchase film and television assets.

At the end of January last year, Huangshi Group, which is mainly engaged in dairy products, issued a merger announcement stating that the company plans to acquire Beijing Shengshi Jiaoyang Cultural Communication Co., Ltd.(hereinafter referred to as "Shengshi Jiaoyang") at a price of 780 million yuan. % equity, with a value-added rate of 237.99%.

In fact, the "marriage" between Huangshi Group and Shengshi Jiaoyang is only the tip of the iceberg in the 2015 film and television M & A case. According to wind data, throughout 2015, there were nearly 100 mergers and acquisitions of film and television assets by A-share listed companies, involving an amount of more than 50 billion yuan. Among these acquisitions, there are not only external mergers and acquisitions of listed film and television companies, but also cross-border acquisitions by many "laymen".

It is worth noting that when Huangshi Group acquired Shengshi Jiaoyang, the latter also made a commitment that the net profit attributable to shareholders of the parent company after deduction of non-profit from 2015 to 2017 should not be less than 75 million yuan, 90 million yuan and 108 million yuan respectively. Finally, in last year's annual report released by Huangshi Group, Shengshi Jiaoyang completed its first-year performance commitment with a net profit of 77 million yuan.

However, not all film and television M & A targets have fulfilled the performance commitments they have made, and Lugang Culture's acquisition of Tianyi Film and Television is one of them. In June last year, Lugang Culture acquired a 51% stake in Tianyi Film and Television for 217 million yuan. The latter then made that the audited net profit from 2015 to 2017 would be no less than 25 million yuan, 55 million yuan, and 85 million yuan respectively. Performance commitment. However, just as Lugang Culture planned to acquire the remaining 49% stake in Tianyi Film and Television, it finally "aborted" because its net profit for the first half of the year was less than 5 million yuan and did not reach 10% of the promised amount.

According to incomplete statistics from the reporter, among the nearly 100 film and television mergers and acquisitions last year, the probability of achieving performance commitments was less than 70%.

Huang Guofeng said that with the frequent occurrence of such mergers and acquisitions, the capital bubble is indeed increasing and thus has a negative impact on the industry.

"2015 was a major year for film and television mergers and acquisitions, but the frequent number of mergers and acquisitions cases has also brought some topics worthy of attention, such as how to control capital bubbles and performance commitment completion rates, and how listed companies face market value management. Possible impairment of goodwill in the future." Huang Guofeng said.

Film and television mergers and acquisitions are cooling

down After a year of explosive growth, film and television mergers and acquisitions have an inflection point in 2016 and have a trend of turning cold.

In addition to the above-mentioned termination of the acquisition of the remaining 49% shares of Tianyi Film and Television by Lugang Culture, there were many cases in which listed companies terminated film and television mergers and acquisitions in the first half of this year. Among them, Storm Group (300431.SZ) terminated the acquisition of Jiangsu Daocao Bear Film Co., Ltd.(hereinafter referred to as "Caocao Bear") and Tangde Film and Television terminated the acquisition of Wuxi Aimei Shen Film and Television Culture Co., Ltd.(hereinafter referred to as "Aimei Shen") attracted the most attention.

Previously, Storm Group and Tangde Film and Television announced that they planned to acquire certain equity interests in Straw Bear and Aimei respectively. Although the transaction methods are slightly different, the characteristics of the targets are quite similar. Among them, Straw Bear was founded by movie star Wu Qilong, and also has artists Liu Shishi under it, and Aimei God is a film and television company founded by Fan Bingbing only last year.

Previously, a listed company executive told reporters that the main factors considered in terminating the acquisition of the target company were the increasingly fierce public opinion and the change in attitude of the regulatory authorities.

In May this year, market rumors were rumored that regulators intended to tighten four types of mergers and acquisitions, including film and television, and games, which were verified in many subsequent cases of listed companies being rejected.

Huang Guofeng believes that the explosive growth of film and television mergers and acquisitions was related to the general environment and the company's own market value management. He said that previous macro policies encouraged the development of the cultural industry, coupled with the continued high growth of the box office of movies, allowed the market to see the huge development prospects in this area. Therefore, by participating in the film and television industry, listed companies can achieve dual growth in their own performance and market value through mergers and acquisitions of relevant companies.

"But investing in the film and television industry does not mean that you can make a steady profit. For example, if you want to make a movie, the income must be at least three to four times the cost." Huang Guofeng said,"This is because the commercialization cost of domestic films is very high and the profit model is relatively simple. Most of them rely on box office revenue, which is different from foreign countries and may have peripheral development and sales."

Shen Meng, executive director of Xiangsong Capital, said that the high incidence of film and television mergers and acquisitions has brought a huge bubble to the valuation of the industry, and was even called a "star cash machine" by the outside world.

"The intention of the regulatory authorities to deliberately tighten is not to be stuck, but to strictly review the rationality of valuation, performance and growth, which means whether the target itself has a long-term stable production team, whether it has sufficient working capital, performance The rationality of the commitment and the rationality of the valuation, etc." Shen Meng explained.

Relevant data shows that the average ratio of goodwill to total assets in the film and television industry reached 24.2% in 2015, an increase of 145 times in the past five years. This means that as the ratio of goodwill to total assets rises significantly, industry risks are also accumulating rapidly. At the same time, as the performance betting period enters the second half, the probability that the performance will fall short of expectations will increase significantly, and the risk of goodwill impairment will gradually be exposed.

On this basis, both Huang Guofeng and Shen Meng said that film and television mergers and acquisitions will surely decrease in the future."This is not only a change in regulatory thinking, but also a time for the industry to adjust spontaneously."

Editor: Nancy