The "explosive manufacturing machine" has once again broken into Hong Kong stocks.
Author | High distant mountains
Edit | High Rock
Source | Mustang Finance
2016's "Little Parting", 2019's "Little Joy" and 2021's "Little Shed", these "small" series of TV series, are all around the parent-child story between parents and children. In addition to winning many awards in the industry, these works have also received praise and attention from the public.
The 2020 hit drama "Thirty Only", from the perspective of three thirty-year-old women, tells the heavy pressure encountered by urban women at the important age node of thirty years old, which has aroused strong resonance from a large number of viewers.
The producer behind these TV series, Lemon Meng Film and Television, has the name of "explosive manufacturing machine" on the Network.
However, the film and television company, which has only been established for six years, has some twists and turns on the road to capitalization. On April 8, Lemon Pictures submitted the Prospectus to the Hong Kong Stock Exchange for the second time.
This is the third time that Lemon Pictures has impacted the capital market in a year and a half. In January 2021, Lemon Film & Television launched the A-share listing plan, was terminated at the end of June, and then changed its route to Hong Kong stocks, and broke into the Hong Kong Stock Exchange in September of the same year, but the Prospectus became invalid on March 29, 2022.
Released 17 drama series, 71.4% boutique rate
There are many blockbuster dramas in Lemon Meng Film and Television. Since its inception, Lemon Film and Television has produced and released a total of 17 dramas. He has cooperated with many A-list stars and actors, including Huang Lei, Sun Honglei, Jiang Shuying, Gulinazha, Yang Mi, Haiqing, Lu Han, Guan Xiaotong, Liu Haoran, Song Zu'er and so on.
In February 2016, the first TV series of Lemon Meng Film and Television, "Lonely Empty Garden Spring Evening", was broadcast, starring Liu Kaiwei, Zheng Shuang and other actors. At the time of broadcasting, Zheng Shuang had not yet "rolled over", Liu Kaiwei had not yet read the "Luminous Script", but still could not stop the word of mouth to hit the street, this first TV series of Lemon Meng Film and Television scored only 5 points on Douban, and there were also viewers in the comment area who expressed dissatisfaction with the actor's acting skills and plot.
However, this is not the only drama of Lemon Film and Television in 2016. In May 2016, the company also produced "Mr. Good" starring Sun Honglei and Jiang Shuying. As soon as the drama was broadcast, it was well received by the audience, and the Douban score reached 7.1 points. In August of the same year, "Little Parting" starring Huang Lei and Haiqing was a classic, becoming a family drama with a high national popularity, obtaining a Douban score of 8 points, and the company's popularity rose rapidly.
During this period, the company also gained the favor of investment institutions. In March 2016, Lemon Film and Television received financing of 500 million yuan from Hony Investment, Tencent Investment, Mango Cultural and Creative Fund, Fusi Capital and Lingze Assets.
In 2017, Lemon Meng Film and Television only produced "Choosing Heaven" starring Lu Han and Gulinaza, but the drama did not go out of the circle, with a rating of only 4.1 points. Fortunately, the company does not seem to have been greatly affected by the rating of the show.
In March 2018, the company officially announced the completion of a series C financing of hundreds of millions of yuan. This round of investors includes institutions such as Hanfu Capital, Wuniu Holdings and Qianyi Capital, and the old shareholders Tencent and Hony Capital continue to support.
Source: Aiqicha
At the same time, after the company completed the C round of financing, Zhou Yuan, executive vice president of Lemon Film and Television, revealed in an interview with 21st Century Business Herald that Lemon Film and Television may start IPO preparations in 2018, and the company has achieved profitability from 2015 to 2017, and the profit growth rate is considerable.
After that, the company produced "There Are Trees in the South" and "Fu Shao", starring Chen Weiting, Bai Baihe, Yang Mi, Ruan Jingtian and other stars. However, the ratings of these two dramas are not high, "There Are Trees in the South" is 5.3 points, and "Fu Sha" is 4.7 points, and since then Lemon Meng Film and Television has not received financing.
In 2019, Lemon Film and Television produced three TV series, including "Little Joy", "Kyushu Muyi" and "Full-time Master". The company reached a new peak with "Little Joy", with a rating of 8.4 points, and the ratings of the other two dramas were 6 points and 7.4 points, respectively.
The next few works are the best works brought by Lemon Meng Film and Television in recent years, and they are also the dark horses of the summer file in 2020 - "Twenty Not Confused" and "Thirty Only", the same female group portrait, the same realistic theme, these two dramas ranked in the top three in the single-day popularity list of Cat's Eye dramas.
Before the two dramas were popular, the company's "Fox Hunting" score was not low, 7 points.
Among them, "Little Farewell", "Little Joy", "Little Shedd", "Thirty Only" and "Twenty Not Confused" received more than 19.3 billion views during the premiere of the online video platform, and the annual ratings of TV channels exceeded 1% in the same period.
Source: Prospectus
According to Frost & Sullivan, premium content is a recognized term in the industry and refers to a premium/top-notch series with one or more of the following characteristics: an experienced cast, a seasoned production team, significant production investment, considerable broadcast licensing fees, and excellent ratings/views performance. "Boutique rate" refers to the proportion of the number of boutique episodes to the total number of episodes broadcast by each company in a year.
"From 2018 to 2020, five of the seven series we have aired are boutique series, with a boutique rate of about 71.4%, far exceeding the average boutique rate of about 40.8% of the top five competitors in the same period by revenue." Lemon Meng Film and Television said in the "Prospectus".
In addition to TV dramas, Lemon Film and Television has also been involved in the film field, and its main film "Mr. Monster" was launched in 2018, and due to the longer film chain, the film was not screened until August 2020.
Zhou Yuan, vice president of the company, once said that although in the development of the series, Lemon Meng emphasized that from the early copyright to the development and production to the marketing and distribution are hands-on, but the film because of the longer chain, so it emphasizes cooperation with external excellent companies to integrate resources and diversify investment risks.
Three-year revenue of 4.4 billion
Both revenue and net profit declined
With so many blockbuster dramas, how much money can Lemon Film and Television make a year?
From 2019 to 2021, the revenue of Lemon Film and Television was 1.794 billion yuan, 1.426 billion yuan and 1.249 billion yuan, and the net profit was 80.398 million yuan, 62.545 million yuan and 60.913 million yuan, respectively, and the revenue and net profit both declined. According to the international market research institute "Frost & Sullivan", according to the revenue of 2018, 2019 and 2020 for three consecutive years, Lemon Film and Television ranked among the top five.
Source: Prospectus
It is worth noting that Tencent contributes a lot of revenue of more than one billion yuan per year.
From 2019 to 2021, the revenue of Lemon Film and Television from Tencent Group was RMB79.9 million, RMB467 million and RMB211 million, accounting for about 4.5%, 32.7% and 16.9% of the total revenue respectively.
In the Prospectus, Tencent Group is its largest customer in 2020, the third largest customer in 2021 and the fifth largest customer in 2019, respectively. If the business relationship with Tencent Group cannot be maintained, its business, financial condition and operating results may be materially and adversely affected.
In 2015, Lemon Film & Television officially announced the introduction of Tencent Group as a strategic investor. Prior to the IPO, Tencent Group held a 19.78% stake in the company through Tencent Mobility.
In addition to relying on head customers, it is crucial that a film and television company can continue to output good works.
In 2021, the revenue from the marketing of lemon film and television content was 110 million yuan, nearly double that of 65.96 million yuan in 2020. Mainly because the "Xiao Shede" and "Xiao MinJia" broadcast in 2021 are deeply loved by the audience, the number of brands promoted in the series has increased from 37 in 2020 to 61 in 2021.
According to the "Prospectus", there are currently two episodes in the production/post-production of Lemon Meng Film and Television, including "Coward" and "Twenty Not Confused II".
Source: Prospectus
The production of dramas requires a lot of funds, and the asset-liability ratio of Lemon Meng Film and Television is also relatively high. From 2018 to 2020 and the first half of 2021, the asset-liability ratio of Lemon Film and Television reached 131.39%, 130.18%, 137.04% and 125.93% respectively. In the same industry, for example, the debt ratio of the veteran film and television company Huace Film and Television was 45.62%, 46.26%, 32.6% and 29.97% respectively in the same period.
It is also worth noting that there are some tax-related issues. In October 2018, Fan Bingbing was fined 884 million yuan for tax-related issues, causing a major shock in the entertainment industry. Countless star artists and film and television companies have quickly paid back taxes, and Lemon Film and Television is no exception.
"We conducted a tax compliance self-inspection of our business between 2016 and 2018 and may require the payment of several additional taxes for the period 2016 to 2018. In 2019, all outstanding taxes of approximately RMB77 million were paid in full. Lemon Meng Film and Television said.
The founder worked at SMG, "bundling" Huang Lei
Being able to create a variety of blockbuster dramas is inseparable from the experience and network resources of the founders behind Lemon Meng Film and Television.
In March 2014, Su Xiao left Shanghai Oriental Media Group Co., Ltd. ("SMG"), where he had been working for 9 years, to become the founder and president of Lemon Film and Television, the actual controller of the company, holding 19.76% of the shares. He once served as the deputy director of Oriental Satellite TV, the director of the Film and Television Drama Center, and the CEO of Shangshi Pictures.
Also starting a business with Su Xiao are Chen Fei, a former SMG colleague, and Xu Xiaoou, the producer of the TV series "There Are Trees in the South", "Little Farewell", "Snail Residence", "Dulala Promotion", "The Biography of Zhen Huan", "Growing Up" and "Floating Sinking", and the planner of the TV series "Cliff", which holds 9.17% of the shares respectively.
As the company's two popular TV series "Little Joy" and "Little Parting", actor Huang Lei also held a certain proportion of the company's shares through Shanghai Fruit Investment Management Center (Limited Partnership) and Beijing Manfu Culture Communication Co., Ltd. in 2017.
Among them, the actual controller of Shanghai Fruit Investment Management Center (Limited Partnership) is Su Xiao, the founder of Lemon Meng Film and Television, Huang Lei holds 14.89% of the shares in the company, and the actual controller of Beijing Manfu Culture Communication Co., Ltd. is Huang Lei, holding 90% of the shares.
After the exposure of the 2021 episode list of Lemon Meng Film and Television, the original team of "Little Joy" will reunite to shoot the sequel "Little Joy 2022", which also means that Huang Lei will star in the film again.
Straw Bear Entertainment (2125. HK), is also one of the film and television companies and star deeply bound companies, of which Wu Qilong is one of the founders of Straw Bear, and its long-term partner Liu Xiaofeng is the actual controller and largest shareholder of Straw Bear, holding 58.41%; iQiyi holds 19.57% of the shares, which is the second largest shareholder; film stars Liu Shishi (Liu Shishi's original name) and Zhao Liying hold 14.8% and 0.79% of the shares respectively.
On January 15, 2021, straw bears rose at the opening of the day of listing, all the way up, during which the highest increase reached 83.67%, and finally closed at a price of 10.8 Hong Kong dollars per share. However, under the influence of the epidemic, the stock prices of film and television companies are generally depressed. As of April 12, Straw Bear's share price has fallen to HK$3.61 per share, with a total market capitalization of HK$2.5 billion. After more than a year of listing, its market value has shrunk by more than 60%, falling below the issue price of HK$5.88 per share.
Zhu Meiyin, a Hong Kong stock analyst at Zero One Research Institute, said that domestic entertainment companies such as Litian Pictures (9958.HK), Xinshi Culture (1740.HK), etc., whether it is the secondary market level or the performance level, are very crossed, in the case of the downturn in Hong Kong stocks in the past two years, they still lost the market, and breaks are the norm. First, the epidemic has repeatedly affected business progress, and secondly, the domestic supervision of the cultural entertainment industry has become stricter, and traditional entertainment has also been affected by the effect of short videos and Internet celebrities.
For film and television companies, stars are naturally the core resources of the company, and film and television companies become shareholders in order to "bundle" star resources. But star holdings have pros and cons for businesses. Some insiders said that once the star shareholders sell after the ban is lifted, it will have a great impact on the company's stock price and affect the confidence of investors.
Can Lemon Film and Television, which frequently produces explosive dramas, continue to output good products? Can the capital market once again stand out? Welcome to leave a message to discuss.