Small partners who pay attention to internal entertainment will not be unfamiliar with Lehua Entertainment (hereinafter referred to as Lehua), its boss Du Hua is known as the "godmother of the entertainment industry", and its employees include Han Geng, Wang Yibo, Meng Meiqi, Fan Chengcheng and other well-known artists.
Now, China's largest artist management company is about to join the capital game. On March 8, according to the information on the official website of the Hong Kong Stock Exchange, Lehua Entertainment Group officially submitted a listing application to the Hong Kong Stock Exchange for listing in Hong Kong, with CITIC Construction Investment (International) Financing Co., Ltd. and China Merchants Securities International as its joint sponsors.
Founded in 2009, Lehua's business covers artist management, music IP production and operation, and pan-entertainment business, but more than 80% of its revenue source is artist management, which is often referred to as "artist management". With the development of the Qinglang movement, the talent show was stopped, and the chaos in the rice circle was hit hard, at this juncture, Lehua insisted on going public, what was its intention?
Wang Yibo alone to support Lehua?
Founded in 2009, Lehua started from artist management, and now its business covers three major business sectors: artist management, music IP production and operation, and pan-entertainment business.
According to the prospectus, Lehua's largest shareholder is du hua, founder and chairman of the board, holding 50.18%; Chinese culture holds 14.25%, Ali Pictures holds 14.25%, and ByteDance's wholly-owned subsidiary Quantum Leap holds 4.74%.
2014 was the year of Lehua's debut, the year when the Korean Wave reached its peak, and Lehua took advantage of the momentum to launch the Chinese-Korean combination UNIQ, including Wang Yibo.
Up to now, Wang Yibo's Weibo followers have exceeded 39 million. At the end of 2021, Lehua produced two digital singles, "No Feeling" and "Minecraft Code", which sold more than 17 million copies and 15 million copies respectively.
Immediately after, Lehua 'Re-enactment of the Old Trick' launched Lehua's seven sons NEXT, of which Zhu Zhengting, Fan Chengcheng and Justin (Huang Minghao) were widely known. Lehua also produced the digital album Chapter Z, which sold about 2 million copies by the end of 2021.
The successful appearance of many artists has brought Lehua a huge income. According to the prospectus, from 2019 to 2021, Lehua's artist management income reached 530 million yuan, 808 million yuan and 1.174 billion yuan, accounting for more than 84% of the total revenue. In 2021, this proportion soared to 91%.
However, young playwright Xiang Kai said in an interview with the media that Lehua's growth in recent years is mainly due to Wang Yibo's traffic, rather than the company's own content operation.
The road to listing has been tossed and turned
Du Hua, as the head of Lehua, actually had plans to impact the capital market a long time ago, but all of them ended in failure.
In 2015, Lehua was listed on the New Third Board, but was later delisted in 2018 and turned to A-share listing.
According to the official website of the China Securities Regulatory Commission, since April 2018, Lehua began to accept the listing counseling of China Merchants Securities Co., Ltd., and as of June 4, 2021, the progress report of the counseling work has been updated to the 16th issue. However, after this, the counseling was terminated and the A-share listing plan was frustrated.
In July 2021, Lehua underwent industrial and commercial changes, adding Zhejiang Dongyang Alibaba Pictures Co., Ltd. and ByteDance affiliate Beijing Quantum Leap Technology Co., Ltd. as shareholders, which was interpreted as Duhua's intention to continue to promote capitalization.
Its artists have been mired in negative controversy many times
This time, Leroy, whose registered address is in the Cayman Islands, has placed its IPO destination in Hong Kong.
According to Frost & Sullivan, Lehua Entertainment is the largest artist management company in China and one of the most well-known entertainment brands in China in terms of revenue generated by artist management in 2020.
But what is obvious is that the business of artists is really risky today.
First of all, the talent show was stopped, and the road to cultivating idols has been blocked, and Lehua started by casting stars, which is tantamount to drawing salaries from the bottom of the pot.
Secondly, it is not uncommon for artists to collapse houses, and a little carelessness is to lose everything, and Lehua itself has also been caught in the storm because of the collapse of idols.
For example, last year's "Meng Meiqi Incident", Lehua artist Meng Meiqi was exposed to "know three when three", even if the company and the company denied it, but Meng Meiqi still fell to the bottom.
Since his debut, the new traffic Huang Minghao has set up a "rich second generation" persona, nicknamed "Jia Fugui". However, according to insiders, as early as 2016, Huang Minghao's mother entered the list of untrustworthy people, and there were 4 untrustworthy incidents in 2018, as of 2020, Huang Minghao's mother owed a total of 30 million yuan, and because she had the ability to repay and refused to repay her debts, she has been officially included in the list of Lao Lai.
As for Wang Yibo, who is known as the "Prince of Lehua", from the beginning there has been controversy: some people say that his "acting skills are too poor, filming will only shoe face, angry and staring at the eyes", some people say that he "only relies on smashing resources", and some people say that "character is not good"... In short, it is "moral mismatch".
The most crucial thing is that since the second half of last year, the "Clear Action" rectification policy for the chaotic management of the rice circle has had a significant impact. Weibo canceled the celebrity super talk ranking, Douyin removed the celebrity list, and some music platforms restricted the number of albums and singles purchased by purchased users... Bottom line: The flow of food can't be eaten for too long.
In fact, Du Hua knows his company's problems better than anyone, and has long proposed to get rid of his dependence on artists, but it backfires.
However, for the future, Lehua is still full of confidence, believing that China's pan-entertainment market will continue to grow. According to Frost & Sullivan, the total market size of pan-entertainment will reach 1,334.8 billion yuan in 2025, with a compound annual growth rate of 19.1% from 2020 to 2025.
Faced with such a huge pie, how does Lehua plan to share a piece of the pie? Is it to continue to "seek wealth and wealth in insurance" and rely on traffic to get out? Or is it to manage the content of the work in a down-to-earth manner and truly achieve Du Hua's goal of "raising the film and television business to 50%"?
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