Domestic mergers and acquisitions, overseas dreams Huayi Brothers Capital Game Gamble

Huayi Brothers (300027) have made progress in their plans to go to sea after the "cut-and-Studio8" of investment in American companies. Huayi Brothers announced September 15 that the company intends to invest 210 million U.S. dollars in overseas business, of which 130 million U.S. dollars will be used to set up a wholly-owned subsidiary in the United States, and another 80 million U.S. dollars to its wholly-owned subsidiary in Hong Kong Huayi International investment. The figures show that Huayi's debt ratio reached 45.94% in the first quarter of this year, the highest in recent years and significantly higher than its peers. Analysis that Huayi debt to the sea is intended to expand profitability, stability of the main business performance.

Huayi's frequent frustration at sea

Huayi Brothers layout Overseas not overnight, as early as the beginning of a decade, to the film "Big Shot", "Kekexili" as an example, the two films are with the United States Columbia Film company launched. This May, Huayi Brothers and the independent distribution company of Los Angeles, Imglobal, reached a partnership agreement on the international issue of Huayi Chinese films, which began to penetrate the production and distribution of the Hollywood film market.

The way in which Huayi brothers went to sea in recent years was not even smooth. Beijing Commercial News reporter found that in 2011, Huayi Brothers had said that, through Huayi International and the legend of the United States and other investors to establish joint ventures overseas to produce films, but according to relevant reports that the plan was eventually stranded because of financing problems.

In March this year, the Huayi Brothers issued a bulletin saying that it was intended to form a "Huayi Brothers investor" together with other identified investors, and as an investor, to invest 120 million to 150 million dollars to buy a stake in the US Studio8 company. Unexpectedly, after a few months, Fosun International Limited announced that it had signed an investment agreement with the US Studio8 company on June 6 to invest in the company. Zhang Zouru, general manager of Beijing Cultural media company, despite previous investment setbacks, but the "new love" in the United States to set up a wholly owned subsidiary, on the one hand shows the Huayi brothers on the "Go out" plan, on the other hand, in the first half of this year, the transformation of the Huayi Brothers in the main business performance significantly decline, At this stage, we need to develop new profit space to stabilize the performance.

High debt comes from crazy mergers and acquisitions

Although the Huayi brothers in the United States to set up a wholly-owned subsidiary of the layout of overseas markets is a foregone conclusion, but when it comes to overseas development, Mr Tsang, who has been involved in film and television investment for many years, is not optimistic, "it seems to the outside world, Huayi Brothers to expand overseas markets, the international business for the promotion of corporate image to play a role in promoting, but for investors, As a listed company, Huayi Brothers ' debt is significantly higher than other companies in the same industry, which will affect investors ' confidence in the future development of Yu Hua brothers.

Just two weeks ago, Huayi Brothers had just issued a short-term financing voucher of 300 million yuan to repay the bank loans of the company's headquarters and its subsidiaries. According to another announcement, Huayi Brothers from the end of 2011 to the end of 2013, the three-year debt rate showed a significant upward trend, respectively, 30.68%, 48.65%, 45.12%. At the end of the first quarter of this year, Huayi Brothers ' debt ratio reached 45.94%. And the light media, China policy film two listed companies at the end of the first quarter of the debt rate of 20.17%, 21.39%.

Beijing Commercial News reporter observed that last year Huayi Brothers in the temporary end of the game, film and television after the merger, this year began to frequently spend the layout of real entertainment field. In mid-May, Huayi Brothers to 1.638 billion yuan for the price of Shenzhen Ping Shan three parcels of land; at the end of June, Huayi Brothers again issued a notice, to sell its Huayi brothers (Tianjin) Real Entertainment Co., Ltd. 49% of the shares to Beijing Huaxin Real Equity Investment Partnership, equity transfer price of 539 million yuan. After the completion of the transaction, the company holds the real entertainment 51% of the equity, huaxin real Real Entertainment to hold 49% of the equity. Industry insiders said that the high debt of Huayi Brothers is still mainly affected by its "merger addiction".

The overseas market is a double-edged sword

Objectively speaking, the current operation of overseas film and television companies is generally not ideal, and at this time is the Chinese film and television companies ' going out ' time. Sho Yongliang, executive director of Beijing Normal University's capital cultural and creative Industries Institute, for example, in the case of the acquisition of AMC in the past, the acquisition of AMC's operations at a loss before the acquisition of profit, which has provided a favorable basis for Chinese companies to expand their business overseas, " The Huayi Brothers may be able to pass on the pressure of the domestic business through their overseas business, if the overseas business can be successful to achieve profitability, at the exchange rate, can even produce more substantial profits.

In Peng, the Director of Research and Development and consulting at Le Positive media, the debt problem can be solved quickly because the current high debt of Huayi Brothers is due to frequent mergers and acquisitions and is not a business problem. And then the key to Huayi Brothers is how to set up a subsidiary to use overseas market resources. If the subsidiary is successful, it will let Huayi brothers accumulate more contacts while mastering more industry resources, and if the operation fails, this will become another business burden for Huayi Brothers.