This year seems to be a big year for IP operators, but unlike the situation of a single reading group in the online text market, the publishing content industry is still in the dispute between the three countries.
Previously, reader culture and motie group have been listed, and this time another fruit and wheat culture has also rushed to the GEM.
On July 21, after the last round of inquiries and replies, the listing status of Guomai Culture Media Co., Ltd. (hereinafter referred to as "Guomai Culture") on the ChiNext Board became effective, and the IPO was approved by the China Securities Regulatory Commission and officially entered the listing track. Guomai plans to raise 350 million yuan through this listing, all of which will be used for the construction of the copyright library.
<h2>The online writer is from Lu Jinbo's publishing and entrepreneurship road</h2>
The founder of Guomai culture is Lu Jinbo, one of the originators of online literature.
Lu Jinbo was born in October 1975 in Pingdingshan, Henan Province, and studied economics at Northwest University. He loved to read since he was a child, thinking that he could work in literature in the future, but the reality was not as he wished, and he could only do new work that had nothing to do with words, and contact his favorite words after work.
Around 2000, Lu Jinbo wrote short stories for two years under the pen name "Li Xunhuan", until around 2000, the concept of online literature was officially launched, and "Li Xunhuan" became a representative of the first generation of Online literature writers, and also the first batch of literary lovers to benefit from the Internet era.
In September 2000, Lu Jinbo officially joined the "Banyan Tree", which had a major impact on his life development. He is the editor-in-chief of Shanghai Banyan Tree Computer Co., Ltd.
Just two months before Lu Jinbo officially settled under the banyan tree, one of his works suddenly became popular on the Internet, which also made "Li Xunhuan" a well-known online writer.
This work is his famous work - "Lost in the Internet Love", is a romance novel created by Lu Jinbo after being influenced by The Leper Cai, which gives a new way of interpreting the love story, full of humorous atmosphere in the Internet chat room, so that modern people can refreshingly taste the authenticity and pure love that exhausts the skin and cleanses the desire.
With the popularity of the work, the pen name of Li Xunhuan also lingers in the hearts of thousands of readers, and he continues to work hard, successively creating many works such as "Edge Game" and "Flying", writing love in a critical way, but the style of the work is witty and humorous, full of joyful colors.
In this regard, the name of Li Xunhuan was red in the fledgling network literary circle, and together with Ning Caishen and Xing Yusen, he was called the "three carriages" of online literature.
In 2002, the boss under the banyan tree will be Li Xunhuan and other well-known authors and the website together packaged and sold, the new Boss of Germany took over the Banyan Tree, the former boss Zhu William officially announced his departure, may have been affected by the "acquisition storm", this "IT circle earthquake" also affected the network circle, Li Xunhuan to bid farewell to the "powder thank you" officially announced the closure, since then away from the identity of literary youth.
He said that his "interest is no longer in writing, and he hopes to turn to behind-the-scenes operations", and since then there has been no writer Li Xunhuan in the world, only the publisher Lu Jinbo.
In February of the same year, Lu Jinbo moved from town to the suburbs and began his publishing career.
About Lu Jinbo's story, in addition to the "three carriages", he is probably the first to see the potential of the current well-known writer & director Han Han.
Lu Jinbo first bought out the publishing rights of Han Han's "A City", and then successively published Han Han's "His Country" and "Glory Day", as of 2014, Lu Jinbo had published a total of 18 books by Han Han and paid Han Han more than 40 million royalties.
Since then, Lu Jinbo has also successively discovered Annie Baby, Guo Ni and other people, and successfully signed the blockbuster Wang Shuo.
As of 2007, Lu Jinbo already has a number of partners such as Han Han, Annie Baby, Guo Ni, Wang Shuo, Rao Xueman and so on. He signed super big names such as Feng Tang and Yi Zhongtian many years later.
Around 2010, Lu Jinbo once made headlines on the entertainment page because of the scandal with entertainment star Zhao Ziqi, and after the two got married, they slowly faded out of various media and focused on the operation of guomai culture.
In 2018, Guomai Culture Media Co., Ltd., founded by Lu Jinbo, received two rounds of financing led by Bona Pictures and IDG Capital. Han Han, Yi Zhongtian, Feng Tang and others have all become shareholders through the increase of capital and employee shareholding platform.
As of the IPO, the prospectus of Guomai Culture shows that Lu Jinbo directly holds 32.62% of the equity, in addition to holding part of the company's equity through Guomai Partnership, so it is regarded as the actual controller of the company.
Among them, Guomai Partnership is a shareholding platform for Guomai Culture employees and cooperative writers, and the important shareholders are Yi Zhongtian, Huang Shan (Feng Tang's spouse), Zhang Haochen, Li Jihong and other well-known scholars and writers.
In addition, the shareholders also include head companies or well-known institutions such as Bona Pictures, Jingtianweidi and Qianshi Investment, of which Bona Pictures holds 9.25% of the shares, ranking in the top three shareholders.
<h4>The proportion of children's books and yards continues to increase, and fruit and wheat rank high in many sub-categories</h4>
The current main business of Guomai Culture includes book planning and distribution, digital content business, IP derivatives and operations, etc., mainly providing cultural products in various carrier forms with books as the main body.
In recent years, "Fruit and Wheat Classics" has launched a series of best-selling books such as "The Little Prince", "Six Notes of Floating Life", "The Weakness of Human Nature", "The Book of Poetry", "The Old Man and the Sea", "The Moon and Sixpence", "Chao Hua Xi Shi", "Human Disqualification", "Cthulhu Myth", "The Great Gatsby", "I Am a Cat", "Walden", "Chrysanthemum and the Knife", "The Crowd of Rabble", "O Henry's Selected Short Stories", "Inferiority and Transcendence", "Dream of the Red Chamber", "Red and Black", "The Advantages of Human Nature" and so on. By the end of 2020, book products such as "The Little Prince", "Six Notes of Floating Life", and "The Weakness of Human Nature" have sold more than one million copies.
In the field of copyright books, the company has established long-term and stable cooperative relations with many writers and scholars such as Yi Zhongtian, Yang Hongying, Han Han, Cai Chongda, Zhang Haochen, Yan Geling, Feng Tang, Dai Jianye, Li Xiaoyi, Xiong Liang, Qingshan, Robert McKee, Rao Xueman, Yang Lan, Frederick Buckman, Uncle Kai and many other writers and scholars, forming a strong competitive barrier in the industry.
The data disclosed in the prospectus shows that from the perspective of the retail market, according to the retail monitoring data of open-volume information, in recent years, thanks to the continuous increase in the retail scale of books such as children's, social sciences, literature and art, the overall retail scale of the book market has increased significantly, and the scale of the national book retail market in 2019 reached 102.27 billion yuan, an increase of 14.43% over 2018, and has maintained a double-digit growth rate since 2014.
In 2020, the size of the national book retail market fell to 97.08 billion yuan, down 5.08% from 2019.
In 2020, the sales of children's, social science, teaching and auxiliary textbooks, and literature and art books will occupy the top four market shares, accounting for about 85.95% of the total book sales. Under the background of the upgrading of domestic consumption structure, the continuous increase in family education expenditure has brought huge market demand, and the scale of the children's book market has grown rapidly, and has developed into a subdivision that has contributed greatly to the growth of the book market in recent years. From 2010 to 2020, the market share of the children's category jumped from 13.50% to 28.31% in 2020, accounting for more than a quarter of the entire market share, and surpassed the social science category to become the largest market segment since 2016.
In 2020, due to the impact of the new crown epidemic, the decline in offline (physical store) sales codes was more obvious, with sales codes falling by 20.36 billion yuan, down 33.8% from 2019; online (online store) channel sales codes were 76.72 billion yuan, an increase of 7.27% over 2019, and online channels accounted for about 79% of the total retail sales yards.
In the prospectus, Guomai cited the ranking data of private book companies with open-book information, showing that its mayang share ranked first in the subcategory of classical Chinese literature, fifth in the picture book category (Comic Reader Mo Tie is the top three), fourth in the history category (first in the reader ranking), and second in the children's literature category (Yutian Hanfeng first).
<h2>Revenue declined slightly, with major copyright income writers holding shares</h2>
The main business income of Guomai Culture has three parts, namely book planning and distribution business, digital content business and IP derivative and operation business.
From 2018 to 2020, the operating income achieved by Guomai Culture was 305 million yuan, 384 million yuan and 355 million yuan respectively, and in 2020, due to the reduction of offline code ocean, the revenue declined slightly.
The three-year net profit was 46.32 million yuan, 51.8 million yuan and 40.47 million yuan, respectively.
Among them, the income of book planning and distribution business was 277 million yuan, 357 million yuan and 336 million yuan respectively, accounting for 94.58%, 96.44% and 96.48% of the main business income, respectively, constituting the main source of income from the main business.
Digital content business and IP derivative and operation business account for a small proportion of the main business income, accounting for about 5% of the total main business income, and the income from IP derivative and operation has been reduced to more than 1 million.
The book planning and distribution business consists of two parts: the sales revenue of public books and the sales revenue of copyright books.
a. Public edition books: mainly refers to works whose copyright has passed the protection period or voluntarily abandoned, and are no longer subject to copyright protection restrictions;
b. Copyright books: mainly refers to works whose copyright is still protected by law, and the use of the work requires the payment of copyright fees.
The top five cumulative sales of public edition books planned and issued by the company include "The Little Prince" and "Six Notes of Floating Life".
The company's copyright books are divided into three categories according to categories: literature and art, children's and social sciences. From 2017 to 2020, the income of copyright books was 119 million yuan, 152 million yuan, 212 million yuan and 84 million yuan respectively, accounting for 55.1%, 54.93%, 59.36% and 61.81% of the book planning and distribution revenue.
The top five copyright books are mainly works by Yi Zhongtian, Cai Chongda, Han Han and others.
According to the copyright income divided by the author, Yi Zhongtian, Zhang Haochen, Cai Chongda and others are ranked in the top three, bringing more than 10 million yuan of income to the company.
On the cost side, the cost of books mainly consists of procurement costs, copyright costs and planning costs, of which copyright costs are the special cost expenditures of copyright books.
In terms of copyright acquisition, Guomai Culture has established cooperative relations with well-known writers and scholars such as Yi Zhongtian, Yang Hongying, Han Han, Yan Geling, Rao Xueman, Yang Lan, and Kai Shu, and overseas copyright has established cooperative relations with well-known overseas copyright agencies such as Boda, Big Apple, and Guanglei.
From 2017 to 2020, the copyright costs of Guomai Culture were 0.32 billion yuan, 0.37 billion yuan, 0.55 billion yuan and 0.22 billion yuan respectively, accounting for about 30% of the cost of book planning and distribution business.
In terms of profitability, the gross profit margin of Guomai is slightly lower than that of the new classic, but higher than that of the reader culture, which is 48%, 49% and 47% in 2018-2020, respectively.
Among them, the gross profit margin of copyright books is lower than that of public edition books, of which the gross profit of Feng Tang's series of books is the lowest. Han Han, Yi Zhongtian, Feng Tang, etc. are all shareholding writers.
Feng Tang's 8 buyout books have seen a decrease in sales since 2019, but it is still necessary to share the relatively fixed copyright costs, so the unit copyright cost increased from 9.30 yuan in 2018 to 21.64 yuan in 2020, an increase of 132.67% month-on-month, resulting in a further decline in gross profit margin.
<h2>The income of the main shareholding writers has declined, and IP is the key? </h2>
From the prospectus point of view, the gross profit margin of copyright books is not only significantly lower than the gross profit margin of public books, and most writers have also shown a downward trend, in contrast to the gross profit margin of public books has been maintained at 55% and above, which is also the main profit point of Guomai culture in recent years, but from the perspective of revenue proportion, the proportion of public books is also declining.
For Guomai whose income depends on copyright books, because the copyright bibliographers who mainly operate have shares, once their production or sales decline, it will have a relatively large negative impact on the revenue and profitability of Guomai, which is one of the main dilemmas facing the company at present, and it is also similar to the profit model of film and television companies.
The digital content business and IP operation business are not developing very well at present, and at the time of the rapid expansion of the IP operation market, the ip operation revenue + digital content revenue of Guomai Culture accounts for less than 5%, and the IP copyright operation income has also declined significantly in 2020.
Taking the reader culture as an example, the digital content revenue of the reader accounts for about 12%, and the copyright operating income has also reached the level of tens of millions, and there has been a sharp rise in 2020.
This is undoubtedly an important means of income expansion + risk resistance.
In addition, if Lu Jinbo relies on using his background in online literature to dig up new IPs and writers, it will not only be beneficial to the company's long-term revenue growth, but also the new IP he has mined will also bring higher gross profit margins to the company and help Guomai make more money.
However, in the field of IP operation, Guomai Culture has participated in five film projects so far, three of which are Han Han's films.
There is also a film based on the novel of Feng Tang, a shareholder of Guomai Culture, "Everything Grows", and the theatrical film "Never Expected" that participated with Bona Pictures. Han Han's "After Forever", "Riding the Wind and Waves" and "Flying Life" won 630 million, 1.049 billion yuan and 1.703 billion yuan at the box office respectively.
But reflected in the income of the fruit and wheat, this part is pitifully small.
If you want to continue to get a piece of the market, on the one hand, fully excavate online texts to find new authors in the future, on the other hand, make these IP films and televisions, and continue to expand digital content + copyright operations is an imperative thing for Guomai culture.
The fundraising of Guomai Culture will also be used for the construction of the copyright library.
But in this way, it may create a conflict between existing shareholding writers and the expansion of new copyrights.
Success is also Xiao He and defeat is also Xiao He may not be a nonsense.
Judging from the current situation, fruit and wheat culture still has a long way to go.
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