The film and television industry has experienced a round of adjustment cycle, and the stock prices of related stocks have been greatly adjusted.
However, the recent film and television industry seems to have signs of a restart: First, the summer file is hot; Second, after many years, there is a stock in the film and television industry that has appeared in the IPO.
Under the warming situation of policies, the summer file performance is better, and the industry's leading companies are listed together, does it indicate that the film and television industry is about to usher in a new boom cycle?
Earning 2.8 billion yuan in three years, Lehua Entertainment will go public in Hong Kong!
Sitting on Top Stars such as Wang Yibo, Wu Xuanyi and Huang Minghao, Lehua Entertainment successfully passed the listing hearing of the Hong Kong Stock Exchange on August 7 and will officially land on the Hong Kong market.
According to the data, Lehua Entertainment was officially listed on the New Third Board in September 2015, however, in March 2018, Lehua Culture chose to terminate its listing on the New Third Board, "in order to meet the company's business development needs and long-term strategic development planning, as well as taking into account the current low stock liquidity and higher financing costs".
The trip to the New Third Board lasted less than three years, but Lehua did not give up listing, and began to consider listing on the main board of the Shanghai Stock Exchange after delisting, and in April 2018, Lehua Entertainment accepted the listing counseling of China Merchants Securities, but the listing was finally gone.
Until March 8 this year, the application for listing in Hong Kong was officially submitted, and it once again moved towards listing.
Source: Qi cha cha
Most of the revenue comes from the artist management business
Lehua Entertainment disclosed its performance, with revenue figures of $631 million in 2019, $922 million in 2020, $1.29 billion in 2021, and revenue growth for three consecutive years from 2019 to 2021 totaling $2.8 billion, and bluntly disclosed its main sources of revenue, revealing that in 2019, 2020 and 2021 and the four months ended April 30, 2022, the revenue generated by the artist management business accounted for about 84% of the total revenue in the same period. 87.7%, 91% and 89.8%
Behind the above figures, 66 signed artists and 71 trainees who participated in the trainee program are the strength of Lehua Entertainment's artist management business, especially Han Geng and Wang Yibo, two artists with more than 30 million followers each, and more than 20 artists with more than 2 million followers, such as Fan Chengcheng, Wu Xuanyi, Zhu Zhengting, etc., which are undoubtedly the trump cards in the hands of Lehua Entertainment.
Source/Lehua Entertainment Prospectus
According to research firm Frost & Sullivan, in terms of artist management revenue in 2021, the company is the largest artist management company in China and one of the most recognized entertainment brands in China, with a market share of about 1.9%.
Lehua Entertainment also derives a small part of its revenue from other businesses in the pan-entertainment industry, including the commercial development of virtual artists, licensing of variety show models and the sale of artist-related derivatives.
Source/Lehua Entertainment Prospectus
In terms of financial data, in the first four months of 2022, Lehua Entertainment's revenue increased from 341 million yuan in the same period of 2021 to 353 million yuan; net profit decreased from 111 million yuan in the same period of 2021 to 0.81 billion yuan, and the company's gross profit margin in the first four months of 2022 reached 44.1%.
The prospectus shows that Lehua Entertainment's performance has grown rapidly in the past three years. In 2019, 2020 and 2021, the company's revenue reached RMB631 million, RMB922 million and RMB1.290 billion, respectively, with a compound annual growth rate of 43.0%; Net profit for the Year was approximately RMB119 million, RMB292 million and RMB335 million respectively, representing a CAGR of 67.6%.
The godmother of entertainment industry traffic
Source: Prospectus
In the entertainment industry, there are a few people, they have strong professional ability, high business acumen, and the hottest traffic stars at the moment are all from their hands.
Du Hua is one of them, and she and Long Dani, who created a "supergirl", and Yang Tianzhen of Yixin Entertainment, are known as the three "godmothers of the entertainment industry" in China.
Before graduating from University, Du Hua sold CDs and worked as an investigator, and after graduation, Du Hua went to work at an Internet company, but he was fired before the probationary period had passed, and he also experienced a six-month unemployment period.
In 2003, she joined 8848 E-Commerce as a PUBLIC RELATIONS Manager, a company founded by Wang Juntao, a native of Fuzhou, with shareholders including IDG, Yahoo founder Yang Zhiyuan, and Xue Manzi.
Unfortunately, after the bursting of the U.S. Internet bubble in 2000, the NASDAQ listing plan of 8848 was also aborted, and in 2005, it was completely packaged and sold to software manufacturer Suda, and Du Hua also left 8848 before this.
In 2004, Du Hua jumped to Huayou Century, the largest content provider of digital music in China at that time, but the main SP business (mobile data content service).
The 5 years in Huayou Century are also the most brilliant period of Huayou Century in the music industry. In the past five years, Huayou Century has controlled or invested in five record companies, Feile Records, Huayi Brothers Music, Birdman Art, Beijing Jinxinzi Culture and Taiwan's Seed Music, occupying more than 20% of the Chinese music market share, and has both musicians like Pang Long and Yang Chengang who have just created brainwashing divine comedies such as "Two Butterflies" and "Mouse Loves Rice", as well as Guangliang, Wu Kequn, Wen Lan and Xu Ruyun and other (at that time) popular new generation singers.
Du Hua is a cruel person, and when she gave birth to her eldest son Zhao Xiaoguo, she received a call from her boss to handle work. Du Hua replied, "Can you give me a few hours and let me give birth to the child first?" By the time she left in 2009, she was the company's marketing director and general manager of Huayou Brokerage.
The job was a foreshadowing and decisive role in her career: she began to connect with the entertainment industry and amassed entertainment industry resources.
In July 2009, Du Hua became the boss himself and founded Lehua Entertainment. After leaving Huayou Entertainment, she not only took away Li Xiaolu's record contract, but also successfully signed the record contracts of Chen Hao, Xie Na and others. Anecdotal rumors, Du Hua used 3 minutes to convince Xie Na, 5 minutes to sign Chen Hao, eloquence.
For artists, the agency contract (responsible for advertising, commercial performance, film and television) and the record contract are often separated, whether it is Li Xiaolu or Chen Hao, their more brokerage contracts are in film and television, and the record contract does not bring much revenue to Lehua.
Soon, Du Hua spent the start-up capital, her investor Yang Ning of the air network borrowed another 3 million, and Du Hua also mortgaged his own house in order to let her continue to fight.
It was not until Han Geng returned to China that Du Hua's career began to improve, and Du Hua, who had no money at that time, could only sign Han Geng in the form of equity, so Han Geng had always been a partner of Lehua.
Du Hua valued the ability that Han Geng had cultivated under the mature cultivation system. Since the establishment of the company in 2009, Duhua has been committed to making the company the Chinese version of SM. She has personally visited well-known agencies in Japan and South Korea, watched concerts, learned the mature star-making mechanism of foreign countries, and related management business.
Thanks to Han Geng's experience and contacts in South Korea, Lehua has become one of the most closely related brokerage companies in the domestic and Korean entertainment circles, opening the model of training trainees in the Korean industrial system, around 2011, Du Hua excavated a group of potential trainees at home and abroad, and received a 3-5 years of trainee training in South Korea, Wang Yibo was the first boy selected by Du Hua.
By transporting the "migrant workers to Korea" who came after him, Du Hua trained the first batch of highly professional idol artists. Three years later, the idol boy band UNIQ, composed of 5 members from China and South Korea, officially debuted, but unfortunately, the Korean restriction order made UNIQ quickly turn off the fire.
In 2016, Lehua and South Korea's Star Company jointly created the girl group "Cosmic Girl", which still uses a mixed configuration of Chinese and Korean members, mainly in South Korea, but has been tepid.
In 2018, this is the year known as the "first year of idols", and the internal entertainment love bean industry has begun to have a vigorous vitality due to the emergence of talent shows. With the popularity of programs such as "Idol Trainee" and "Creation 101", Lehua has become a leading figure in the inner entertainment Aidou company. In "Idol Trainee", there are 9 debut positions, and Lehua artists occupy 3 seats; In "Creation 101", there were a total of 11 debut positions, and Lehua artists Meng Meiqi and Wu Xuanyi directly won the championship and runner-up, and finally were able to output the "standardized idol" screened out by the powerful training system to the audience.
At the same time, Du Hua is also well versed in the power of the Internet and public opinion guidance, and Lehua has been quite successful in the company's marketing and the image shaping of Du Hua himself, so that few surfers have escaped the identity of "national producer" in recent years.
And what really makes Lehua one of the first-class is Wang Yibo. In 2019, Wang Yibo exploded with "Chen Qing Ling" and became a new top stream. He was the first idol of Lehua Entertainment to truly enter the public eye.
Prior to the IPO, Lehua Entertainment had 58 signed artists including Han Geng, Wang Yibo, Meng Meiqi, Fan Chengcheng, Huang Minghao, Wu Xuanyi, and 80 trainees who participated in the trainee program. In addition to individual artists, Lehua Entertainment has also launched UNIQ, NEXT, EVERGLOW, NAME, TEMPEST and other artist groups.
From the history of Lehua's development, it is not difficult to see that the key to the business of artist agency is to be able to win a few people. Lehua does not hesitate to spend a lot of money to select, cultivate and send young idols to the stage step by step, and then continuously replicate the past success in the mode of "old with new", grasping the essence of the most needed by the current giants.
Alibaba, Byte Platform
In August 2018, Lehua Limited won the favor of ByteDance. Du Hua also transferred 5.489 million shares in his hand to Quantum Leap. The query found that "quantum jump" is the main body of ByteDance. At that time, the transaction consideration for 5.489 million shares was $124 million, equivalent to $22.72 per share.
In November 2020, Du Hua transferred 16.5 million shares to Dongyang Ali Pictures through his holding of Shanghai Kunling for a consideration of 277.5 million yuan. Translated down, the consideration per share is 16.81 yuan.
In terms of equity structure, before the IPO, Du Huawei, founder and chairman of Lehua Entertainment, held 50.18% of the shares, Chinese Culture held 14.25%, Ali Pictures held 14.25%, and ByteDance's wholly-owned subsidiary Quantum Yuedong held 4.74%.
It is worth mentioning that Han Geng, who has an 11-year contract with Lehua Entertainment, also holds shares through OYER JOY PLUS LIMITED, holding 2.721 million shares, accounting for 2.35%.
Bona Pictures and Watch Entertainment are about to go public
Public information shows that in addition to Lehua Entertainment's hearing on the Hong Kong Stock Exchange, Lemon Film & Television has been listed on the Hong Kong stock market on August 10; Bona Pictures received approval from the Securities regulatory commission to list A shares. In addition, Encore Entertainment once again went to Hong Kong for an IPO.
The above four enterprises are all leading enterprises in the subdivision field. For example, Bona Pictures is a film group company with distribution as its core competitiveness, a whole industry chain layout, and deeply engaged in the film and television industry for many years. According to the data, Bona Pictures' annual distribution business is stable in the top three of residential distribution companies.
According to public information, Bona Pictures publicly issued about 275 million shares, accounting for 20% of the total share capital after the issuance, and intends to land on the main board of the Shenzhen market to raise 1.383 billion yuan, the issue price is 5.03 yuan / share, the issuance price is 22.99 times, and the total market value after the issuance is about 7 billion yuan.
Lemon Film and Television is the leader of TV series. According to the prospectus, Lemon Film and Television has maintained a stable state of output of high-quality content for many years, and it has a number of blockbuster dramas, and the high rating production rate is 75%, far exceeding the average level of 45.9% of the main competitors.
Lemon Film & Television is priced at HK$27.75 per share, raising a net amount of HK$322.5 million, with a total market value of about RMB8.6 billion after issuance.
Watch Entertainment is a leading online drama and online film producer and distributor in The People's Republic of China, focusing on the production, distribution and/co-investment of web dramas and online movies, as well as co-investment in cinema films. According to the Frost & Sullivan Report, in 2020, In terms of revenue generated by the production and distribution of web dramas, Watch Entertainment ranked second among many web drama companies.
From the perspective of revenue, affected by various factors, the two subdivisions of film and television and tv dramas fluctuate greatly.
Bona Pictures' revenue in 2020 fell sharply compared with 2019, and its revenue in 2021 returned to 2019 levels. The revenue of Lemon Film and Television, which specializes in TV dramas, has continued to decline. In contrast, the revenue of the main online dramas has continued to expand, rising from 135 million yuan in 2019 to 346 million yuan last year. The revenue of leading artist management company Lehua Entertainment also expanded rapidly, rising from 632 million yuan in 2019 to 1.291 billion yuan.
Source: Securities Times Data Treasure
Analysts pointed out that the special period in recent years has affected the promotion of film and television projects, and film and television drama shooting has slowed down relatively slowly, resulting in fluctuations in the performance of Bona Pictures and Lemon Meng Film and Television. At the same time, artists have stepped onto the stage of variety shows, so that Lehua Entertainment can still continue to "absorb gold" with its artists. In addition, more and more time of the audience is concentrated online, which promotes the great development of the online drama industry and benefits the entertainment.
Star shareholders gathered
According to the statistics of Securities Times data treasure, there are star artists such as Zhang Hanyu, Huang Xiaoming, Zhang Ziyi, Chen Baoguo, Han Han and other star artists in Bona Pictures. Before the IPO of Lehua Entertainment, Alibaba Pictures and ByteDance's wholly-owned subsidiary Quantum Leap held shares, and stars had Han Geng and other indirect shares; Lemon Film and Television has received investment from Tencent.
Overall, artist agency is still a lucrative business.