Songcheng Performing Arts will increase its 4 billion yuan and gamble overseas with a bumpy future, and the market is not optimistic

Recently, Songcheng Performing Arts disclosed a fixed increase plan, raising a total of no more than 4.017 billion yuan. However, after the fixed increase plan was announced, Songcheng Performing Arts 'share price fell more than 5% that day. Some analysts believe that the decline in stock prices is actually due to the uncertainty of this fixed increase and the market is not optimistic.

Original title: Songcheng Performing Arts will increase by 4 billion yuan and gamble overseas

Recently, Songcheng Performing Arts Development Co., Ltd.(hereinafter referred to as "Songcheng Performing Arts") disclosed a fixed increase plan. The number of shares to be issued will not exceed 190 million shares, and the total amount of funds raised will not exceed 4.017 billion yuan, used to create six projects including "The Legendary Kingdom of Australia" and "Large-scale Performing Arts Women, Sky Group, Tree House Girls".

However, after the fixed increase plan was announced, Songcheng Performing Arts 'share price fell more than 5% that day. Some analysts believe that the decline in stock prices is actually due to the uncertainty of this fixed increase and the market is not optimistic. Among them, Australian projects are set to increase by 1.615 billion yuan, with a construction period of three years, with the greatest uncertainty and the largest capital consumption. In terms of Internet performing arts, the company is facing the embarrassing situation of single income. Its live performing arts business and Internet performing arts business have not yet achieved much integration and linkage.

Faced with investors 'doubts, a person from the Securities Department of Songcheng Performing Arts told reporters that the company is in the disclosure period of the first quarterly report and is not convenient to accept interviews. The details will be subject to the announcement and the content of the investor relations interactive platform. People from the company's brand department also pushed reporters to interview, saying that it was "inappropriate to answer."

The fixed increase plan of 1.6 billion yuan for overseas bets or "acclimatization"

shows that all the funds raised by Songcheng Performing Arts will be used for the "Legendary Kingdom of Australia Project", the "Songcheng Performing Arts·Expo Stage Reconstruction and Expansion Project", and "Yangshuo·Songcheng Tourism Construction Project","Zhangjiajie Eternal Love Construction Project","Performing Arts Technology Improvement and Technology Interaction Project" and "Large-scale Performing Arts Women's Tiantuan Tree House Girl Project."

Judging from the basic situation of the company's fixed-added projects, there are many fixed-added projects and the amount is large. Among them, the Legendary Kingdom Project of Australia is the first overseas theme park project of Songcheng Performing Arts. The project has a total investment of 2.021 billion yuan and is planned to use 1.615 billion yuan of raised funds; the Expo Grand Stage Reconstruction and Expansion Project is planned to invest 730 million yuan in raised funds, with a construction period of 2 years; Yangshuo Project is 561 million yuan, with a construction period of 1 year; Zhangjiajie Project is 580 million yuan, with a construction period of 1 year; Performing Arts Science and Technology Project is 312 million yuan; Tree House Girl is 219 million yuan.

Zhang Shule, a commentator on the entertainment industry, believes that the fixed increase in Songcheng Performing Arts is more like using "storytelling" performing arts scenes to increase its appeal. But in the current era of content entrepreneurship, it is not enough to have a good story shell. Most of these projects are rooted in the rich local culture. When various newly built scenes appear as a pseudo-landscape or pseudo-cultural relic, they are actually no different from the folk streets of many cities in China. Being big and unassuming will be its fatal weakness.

Regarding Australian projects, Zhang Shule also pointed out that Songcheng Performing Arts wants to use new ideas such as overseas tourism and consumption upgrades to stimulate consumers and investors. However, China's performing arts model may have problems of "acclimatization" overseas. If you are not familiar with overseas local culture as a whole and just build a city, the company will become a civil builder.

Will foreigners recognize China's performing arts culture, and how many tourists will favor the "legendary kingdom"? On the interactive investor relations platform, investors have also questioned the prospects of Australian projects. Songcheng Performing Arts replied that during the expansion process of domestic and foreign projects, the company will undergo full research and demonstration, and will choose implementation or investment projects with a consistent style and ability to control risks.

In fact, Songcheng Performing Arts has been expanding its performing arts territory through copying in other places, forming top ten performing arts shows including "Song City Eternal Love" and "Sanya Eternal Love". But this replication model has not been completely successful. The annual report shows that Songcheng Performing Arts decided to terminate the contract of Taishan Grand Theater and the Wuyishan project because the revenue of Taishan Qiangqing Theater in 2016 only accounted for 0.14% of the total revenue, and the Wuyishan project is far away from the core scenic spots and its prospects are unclear.

Zhao Xiaoma, executive director of CIC Zhuoshi Consulting, said in an interview with reporters that Songcheng Performing Arts should first strengthen its upstream basic performance capabilities, maximize IP value, and then lay out performing arts channels based on differences in cultural consumption scenarios, and at the same time target segments of the population and Regional cultural characteristics launch vertical performing arts.

Songcheng

Performing Arts '2016 annual report recently released by Song Cheng Performing Arts shows that the company achieved revenue of 2.644 billion yuan, a year-on-year increase of 56.05%, and net profit attributable to shareholders of listed companies was 902 million yuan, a year-on-year increase of 43.10%.

It is worth noting that Songcheng Performing Arts has three main business segments: live performing arts, Internet performing arts, and tourism services. In 2016, the company recorded a total revenue of 137 million yuan in the live performing arts sector, an increase of 8.40% over the same period last year; the Internet performing arts sector achieved a total revenue of 1.090 billion yuan last year, a year-on-year increase of 195.37%, accounting for the total revenue. The proportion was 41.23%, while in 2015, Internet performing arts accounted for only 21.78%.

According to the annual report, the Internet performing arts sector's revenue of 1.09 billion yuan comes from Liujianfang, a live broadcast platform it acquired in 2015. Some investors are worried that in an environment where the supervision of the live broadcast industry is becoming stricter and facing a major reshuffle, Songcheng Performing Arts relies too much on six rooms, has a single income channel, and insufficient linkage with the live performing arts business. Future revenue is risky.

"As the user needs of live broadcast platforms continue to diversify, the Liujianfang traditional show model may no longer be able to meet user needs, and the traditional show model is also inconsistent with the general trend of consumption upgrades. In addition, competition in the live broadcast platform industry is intensifying. YY and Momo provide users with diversified services in addition to live video through the ecological model of entertainment platforms and social platforms respectively, and are more customized in operating mechanisms and focus on user experience." Zhao Xiaoma pointed out that these have brought certain risks to Songcheng Performing Arts 'online performing arts.

In Zhang Shule's view, relying too much on the live broadcast platform will enter the "big gamble" mode in the midst of the major reshuffle that the live broadcast platform has already arrived and when the platform requires a large amount of capital investment, that is, either we will survive miserably or we will be eliminated directly. In either case, it will have a huge negative impact on its revenue.

In response to this question, Songcheng Performing Arts explained that Liujianfang has accumulated a large number of loyal anchors and users in its development over the past 10 years. Through strong social relationships, an ecosystem has been formed. Users are very sticky and the Retention rate is very high. Therefore, Liujianfang's traffic cost is very low, and relatively rapid growth can be achieved by relying on natural growth in traffic.

Zhao Xiaoma believes that based on the current situation, it is difficult for Songcheng Performing Arts to integrate and link the live performing arts business with the online performing arts business, because the users of Liujianfang are basically male users, and there are differences in consumer characteristics with group tours (mainly families and middle-aged women). Of the 4.017 billion yuan planned to be raised this time, 5.45% will be invested in the "Tree House Girls" project, and the company can use this group as a supplement to online UGC content.

Editor: vian