On the evening of January 29, Wanda Films (002739. SZ) issued an announcement, and after deliberation and approval at relevant meetings, Chen Xi and Gong Qiao were elected as non-independent directors of the sixth board of directors of the company, and Chen Xi was elected as the chairman and president of Wanda Film.
Source: Company announcement
According to the data, Chen Xi (stage name: Chen Zhixi) is a well-known producer in Chinese mainland, with a deep background in film and television production, and has handled many successful cases, such as "Thai Glory" and "Pancake Man". In 2015, Chen Xi joined Ruyi Pictures as president, and since then, he has successively invested in the production of high-quality films such as "Warm", "Keep You Safe", "Walking on the Moon Alone", "Hello, Li Huanying" and so on. According to the statistics of Maoyan Professional Edition, as of January 29, the box office of movies produced and produced by Chen Zhixi has exceeded 10 billion yuan.
Source: Maoyan Professional Edition, data as of January 30, 2024
Another non-independent director candidate, Gong Yu, has rich experience in the game industry, having held core management positions in the game business in companies such as Guangyu Games, Shanda Games, Qihoo 360, and Chinese Online, and is currently the general manager of Beijing Ruyi Jingxiu Network Technology Co., Ltd.
In December 2023, China Confucianism (00136. After acquiring 49% of Wanda Investment's equity through Shanghai Ruyi Film and Television Production Co., Ltd., Ke Liming, chairman of the board of directors, acquired the remaining 51% equity of Wanda Investment through Shanghai Ruyi Investment Management Co., Ltd., becoming the actual controlling shareholder of Wanda Film. With Chen Zhixi and Gong Qiao, two Confucian cadres, entering the board of directors, and Confucianism officially taking over Wanda Film, the dust has settled on the high-profile acquisition of the domestic film industry, and Wanda Film has entered a new stage of development. China Ruyi, the leading film and television streaming media in the Hong Kong stock market, and Wanda Film, a private film company in the A-share market, officially merged, becoming a rare "film and television aircraft carrier" in the whole industry chain of China's film and television entertainment industry, integrating production, distribution, cinemas, streaming media, derivatives and games, with a total market value of nearly 50 billion yuan.
Industry insiders believe that China Ruyi and Wanda Film, as the head cinema company and head content company in China respectively, have a lot of imagination and are expected to accelerate the synergy of upstream and downstream businesses and provide new momentum for the new round of development of the film and television industry.
The synergistic effect highlights the "Ruyi + Wanda Film" to open up the upstream and downstream industrial chain of the film and television industry
Wanda Film is a leading cinema investor and operator in China, ranking first in China in terms of box office, moviegoers and market share for 14 consecutive years. As of September 30, 2023, Wanda Film has a total of 877 theaters in operation with 7,338 screens. According to the data of the first three quarters, Wanda Film has a cumulative market share of 16.5%, which is worthy of the name of the largest cinema chain in the country.
Since its establishment, the production team of Ruyi Pictures has invested in the production of hundreds of film and television works, and has won many awards such as the Feitian Award, the Golden Eagle Award, and the Magnolia Award, and has participated in the investment and production of well-known film and television dramas such as "Langya Bang", "No War in Beiping" and "Old Tavern", which will be listed in 2020 and delivered two high-quality works with a double harvest at the box office and word of mouth the following year. "Send You a Little Red Flower" became the top ticket for New Year's Day in 2021, and then the Spring Festival file "Hello, Li Huanying" topped the box office list of the Spring Festival in the same year, receiving a super high box office of 5.413 billion, creating a new record for domestic comedies. In the past 5 years, 13 movies have been produced by Chinese Confucianism, 10 of which have stabilized at more than 7 points on Douban, and the yield rate is close to 80%.
Source: Chinese Confucianism
Analysts pointed out that with the ability of Ruyi to produce and integrate upstream and downstream, coupled with Wanda Film's strong cinema distribution and screening terminal cinema resources, the new combination of "Ruyi + Wanda Film" will complete the integration of the entire industry chain of the film industry from content development to publicity and screening, as well as subsequent IP derivatives development.
The longest Spring Festival file in history is coming, "Confucianism + Wanda Movie" occupies half of the Spring Festival file
In 2023, the film market will fully recover. Chinese Confucianism has many theatrical films released throughout the year, such as "Keep You Safe", "Exchange Life", "Warm" and "Disappearing Her". Recently, the film "The Annual Meeting Can't Stop" participated by Ruyi Pictures has become a dark horse on New Year's Day, and as of January 29, the box office has exceeded 1.1 billion yuan.
As an important support for the box office of movies throughout the year, the Spring Festival stalls have attracted much attention from the market. There will be a total of 8 days for the Spring Festival in 2024, which is longer than in previous years, and it is also known as "the longest Spring Festival stall in history".
Judging from the production information of the 2024 Spring Festival movies, "Ruyi + Wanda Movie" occupies 4 of the 8 movies that have been scheduled for the 2024 Spring Festival - Zhang Yimou's "Article 20" (produced by Confucianism and jointly distributed by Wuzhou), Jia Ling's "Hot and Hot" (co-produced by Confucian), Han Han's "Flying Life 2" (produced by Confucian) and the cartoon "Bear Infested: Reversing Time and Space" (produced by Wanda and Confucian). Ruyi won all the investments in the 4 head films of the Spring Festival, and behind each of the films invested by Ruyi, there is a joint distribution of Wuzhou under Wanda Films.
Source: Chinese Confucianism
It is worth noting that the costume detective drama "The Case of Tang Di Gong" produced by Ruyi has been set for the CCTV Spring Festival and will be broadcast on January 31. "White Snake: Floating Life" produced by Ruyi is scheduled for the summer and will be released on Qixi Festival this year. In addition, the film and television works to be broadcast by Ruyi Pictures also include the war epic blockbuster "Reinforcements Arrive Tomorrow", the boutique drama "My Altay" starring Ma Yili, Zhou Yiyi, and Yu Shi, the Republic of China drama "Bright Road" starring Wang Yibo and Li Qin, the juvenile crime theme "Prosecutor and Juvenile" starring Zhang Xiaofei, and Pan Yueming starring in the suspense theme "Confession in the Night".
A number of brokerages are optimistic about the company's future development and is expected to achieve long-term steady growth
In view of the new combination of Ruyi and Wanda Films, a number of brokerages have released positive tracking or comment research reports, expressing their expectations for the future operation and market performance of both parties.
Source: Brokerage Research Report
A recent research report by Guotai Junan Securities believes that the strong alliance between Confucianism and Wanda Film Advantage is expected to achieve strong control over the film industry chain. Especially in the context of split distribution, the company is expected to gain a first-mover advantage by building a distinctive cinema brand based on a large number of theaters through differentiated layout.
At the same time, Guotai Junan Securities said that it expects China Ruyi's acquisition of Wanda Film to produce significant synergies at two levels. First of all, with the industry resources accumulated by Wanda Film in content production, the quality and return on investment of China Ruyi's film production in the future is expected to be greatly improved. Secondly, Wanda Film has the largest cinema assets in the country, creating a strong moat and competitive advantage for China Ruyi in the film production and distribution business.
Huaan Securities believes that Wanda Film, as the largest film investor in the country, has a leading market share and a stable position in the industry. The change of the actual controller of the company and the introduction of new directors with experience in film, television and games will continue to release operating leverage.
Northeast Securities pointed out in the research report that after the completion of the replacement of the actual controller, Wanda Film will combine the resource advantages and business layout of shareholders to achieve resource sharing and complementary advantages, and actively play the synergy between upstream and downstream businesses, which is expected to further enhance the company's competitive advantage.