Huayi Brothers "to film" Sample: Capital is the key to transformation

Before investing heavily in overseas markets, Huayi Brothers (300027,sz) 's domestic "go-to-film" strategy has steadily advanced, and its advocacy of film and television entertainment, real entertainment and Internet entertainment three major business layout. Chang, Chief knowledge officer and senior economist at Huamei consultancy, believes that the assets of Huayi Brothers will be the main factor to test their success if they are to build a culture city with heavy assets.

Data show that, as of the end of the first half of this year, Huayi Brothers short-term loans and long-term loans of nearly 1.5 billion yuan, asset-liability ratio of more than 40%, light media (300251,sz), Huayi Film (300133,SZ) and other peers of the asset-liability ratio of about 20%.

The logic of "going to the movies"

This year, Huayi Brothers ' "Go to film" strategy has been steadily advancing. A recent move is, August 14, Huayi Brothers subsidiary Huayi Interactive Entertainment to sell its 20% stake in the Yao-Lai Studios, is expected to benefit about 254 million yuan.

"At present, the film listed companies have to build a whole industry chain, but downstream to go more easily, Huayi Brothers is a light asset model, the development of cinemas more difficult." "Beijing University Cultural Industry Research Institute deputy Dean Chen Shao to the daily economic news reporter bluntly, obviously has the" heavy assets "characteristics of the theater breeding period is longer, at least 1-2 years, if the lack of brand effect is difficult to form a large-scale effect, this or Huayi brothers do not want to run too much theater reasons.

The daily economic news reporter noted that Huayi brothers in the first half of the film and derivatives, television dramas and derivatives and artists brokerage their related businesses fell year-on-year, including film and derivative business year-on-year decline of nearly 70%, Huayi Brothers explanation is affected by the film schedule.

"There is no major film release after January this year is the main reason for the decline of the domestic film and television giant movie business." Peng, director of Media Research and development, said.

Huayi Brothers 2014.5 Annual report shows that the second half of the company has 5 films released, is now in post-production, but individual films are still in the examination and negotiation. The latest news suggests that some of the film's release time may be postponed to 2015, which means that Huayi Brothers ' movie box office has been hard to make a big difference this year. Zhaoke, the film critic, believes that Huayi brothers have not yet been able to get out of the "big year" dilemma.

Huayi's strategy of "going to the movies" Another noteworthy move is that Ming, a former CFO of the company, no longer serves as the chief executive of the Internet Entertainment Group, and is responsible for the operations of the Games, mobile-side new project investments, and remains as deputy general manager.

Analysys International analyst Huang said, Ming has been playing the Huayi Brothers capital operation "strategist" role, a lot of investment in the game has a direct relationship with the sale of Yao-lai film city is the same. Huayi Brothers Securities Representative Zhang Yijun revealed that Ming in charge of the Internet Entertainment business group, indicating that the Internet strategy to rise to the height of board members.

As part of the implementation of the Internet Entertainment Strategy, May 17, Huayi Brothers successfully silverside technology into the consolidated statement, this is after the share of the palm of the Technology (300315,SZ), Huayi Brothers in the game in the field of another "pawn." Analysys International analyst Shillon and other industry insiders revealed that Huayi brothers are currently with some hand tour companies to carry out mergers and acquisitions negotiations.

Layout fan Economy

May 30, Huayi Brothers issued a notice, brothers and Sisters (Tianjin) Cultural Information Consulting Partnership (hereinafter referred to as brothers and sisters Company) to the Huayi Brothers New media company to invest 30 million yuan in the additional funds to obtain the latter 42.86% of the equity.

"The implementation of this transaction is conducive to further expand the company's new media business, more effective to attract talent, broaden the company's Internet entertainment and fan economic business." Said Huayi Brothers.

Huayi Brothers New Media company is a wholly-owned subsidiary of Huayi Brothers, founded in 2011, the scope of business covers advertising, the second category of value-added telecommunications business information services business, sales of computers, etc., 2013 net profit of more than 9 million yuan.

"Daily economic news" reporter inquires about the basic information of enterprises found that brother and sister companies to pay the amount of 30 million yuan, the legal representative for Dingqi, the scope of business is cultural information consulting, corporate information planning and advertising, the opening date of May 23, 2014, It is only a week before the announcement of the new media company of the Huayi Brothers.

It is noteworthy that Dingqi is also the financial director of Huayi Brothers, the brothers and sisters in the company to invest 300,000 Yuan, Ming is a limited partner of brothers and sisters Company, the contribution of 24.8 million yuan.

At the end of August, Huayi Brothers and Tencent announced that the O2O Entertainment social platform "star Shadow Alliance" platform was officially released.

"Star Shadow Alliance's profit model is mainly three kinds: one is for some user privileges and props to pay; the second is to be implanted in the Star Alliance platform some based on the quality of entertainment IP (intellectual property) and the concept of star Powder interactive pay game; the third is to do some e-commerce attempts. Zhang June to the daily economic news reporter said that the investment and the split, currently not disclosed.

Zhaoke, the future social platform trend is "socialization" and "personalized", but the Star alliance with stars and entertainment, and the domestic star culture has not formed, the fan economy is not stable.

Speeding up the development of film and TV peripheral industries

In the steady development of films, TV dramas, artists brokerage and game Four business, Huayi Brothers also actively expand the film surrounding business. May 13, 2011, Huayi Brothers announced plans to adopt a subsidiary of Beijing Huayi and Shenzhen Ping Mountain City Investment and other investors in Shenzhen to jointly develop the "Shenzhen Cultural Town" project, the project is mainly used to build film and television creative industrial base, including studios and other ancillary facilities.

Since May this year, Huayi Brothers announced two times, through the wholly-owned subsidiary Real Entertainment to Shenzhen cultural City to increase the capital of 40 million yuan, a total of 80 million yuan. At present, the real entertainment holding Shenzhen Cultural City equity ratio of 40%.

"By opening up new business areas to further improve the industrial chain, can effectively improve the company's earnings." Huayi Brothers said in the announcement.

May 16 This year, the Shenzhen cultural city to more than 1.6 billion yuan in Shenzhen Ping Shan new District, two industrial land and a commercial office space, the main project will be the development of film and television programme shooting, theme tourism, expected to start before the end of the year.

"Ping Shan is still in the early stages of development, to develop cultural industry there is a way to go, the project profitability remains to be tested." In addition, Huayi Brothers brand can support the cultural city project construction is also a problem. Chang admits.

In addition, Huayi Brothers also participate in the investment of Shanghai Jiading "Huayi Brothers Cultural City", Suzhou "Huayi Brothers film City" and Haikou "Mission Hills, Huayi and Feng Xiaogang" film commune through brand authorization and equity participation in the form of the project, Suzhou Project is still in the construction process, Hainan project has been partially completed and external sales.

Some people in the industry said that Shenzhen cultural city in the specific products accounted for, there is a reference to the Shanghai jiading Huayi Brothers Cultural City project possible. That is, the residential and hotel apartments accounted for more than 60%~70%, the theme of the Business Street (film, Entertainment), creative office, boutique hotels and exhibitions, etc. accounted for 30%~40%.

"Many of the domestic theme parks and cultural properties are sold through the form of property sales, rather than the role of the brand, rather than the urban economic development and planning and design results." "Chang said.

Higher debt rate than peers

At the same time of large-scale foreign investment and mergers and acquisitions, Huayi Brothers can not afford to ignore the financial situation.

Data show that as of June 30 this year, Huayi Brothers monetary funds for 1.4 billion yuan, but short-term loans and long-term borrowings amounted to 1.488 billion yuan, and the year-on-year increase of 31.06% and 22.04% respectively. And the company set up a U.S. subsidiary and the increase of HUAYI international still need more than 1.2 billion yuan. At present, the company's assets and liabilities ratio has exceeded 40%, light media, Huayi film and television in about 20%.

But the road to mergers and acquisitions seems to have just begun. Huayi Brothers said in the announcement, will increase the investment of film and television industry and continue to carry out equity investment, the company is expected to invest about 5.191 billion yuan in 2014-2016 years, 2014-2015 years, the company invested 2.65 billion yuan TV, mergers and acquisitions 1.4 billion yuan investment.

"If the plan is not approved, the strategic transformation of Huayi Brothers will be greatly affected." "CIC consultant culture industry researcher Shen Yanjie.

and Chen Shao and other industry people are more worried about is that the capital market occupies the financing advantage of the film and television giants, how to invest in mergers and acquisitions, taking into account the task of developing domestic films.

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Reporter observation

The fan economy will eventually "not economy" domestic movies take what PK import film

Every journalist Dong Laixiangkan from Beijing

Public data show that as of October 12, the domestic film box office amounted to 23.2 billion yuan, more than last year, and as of October 15, the Import film box office of about 9.4 billion yuan, which means that the first half lose to import film, domestic film regain market initiative.

However, in addition to 2013, since 2010, the domestic Film Market championship has been won by the import film, and the single piece of the box office accounted for 10%, 2010 "Avatar" box office accounted for up to 24%.

"The import quota increases to 34, the domestic film has formed a big impact." "In fact, many of the imported films have not been synchronized with the overseas market, and once they are in sync, domestic films will be under greater pressure," said Zhaoke.

Le Zheng Media Research and development director Peng that the reason for the protection of domestic tablets, some of the slow release of imports, one reason is that the domestic film has not been industrialized and large-scale, the content of the homogenization is more serious, can not withstand the "indiscriminate bombing" of the import film.

"From the enterprise point of view, a lot of film creation by individuals or small groups, the second is the domestic film and television enterprises, the degree of specialization is uneven; third, many enterprises have their own sense of conservative, professional aesthetic lack of the concept of film production. "The film critic Liang to the daily economic news reporter bluntly, the domestic film and television enterprises the most fundamental problem is the lack of professionalism and standardization."

Zhaoke added that the current domestic film has a strange phenomenon is "not applauded," for example, "Small Time" series of films, this is because the narrative, the characters and the theme of the story is too simple, the value-oriented different from people, photography, clothing, special effects and other technical aspects of relatively low-level, this and film giants rely too much on the fan economy, Heavy marketing, not heavy content production.

Those interviewed said that the future import quotas will only increase, and not rule out the possibility of a complete release of 5-10 years.

"It's the golden age for homemade movies to catch up with imported films, because the two or three line and the following City audience's shadow demand is releasing, may take several years, once the small town's video crowd matures, relies on the fan economy support the domestic movie to be able to find the market, if then imports the massive influx, the domestic movie may encounter the bigger impact. "Peng and other industry insiders said.

Beijing century Jia Xiao Technology Co., Ltd. Senior economic advisor Ziqing bluntly, the original intention of the movie giant to enter the capital market, should be to use the capital advantage for Toupai more movie and TV play service, carry on the whole industry chain layout also not to be impossible, but should pay attention to choose the opportunity and the strength, in the film production still cannot scale and industrialization premise, Investing heavily in upstream and downstream mergers and acquisitions may be "putting the cart before the horse", although gains in investment can benefit shareholders, but may lose the golden age of domestic films catching up.