Author | Dong Chailing
Edit | Li Hongmei
Source | The world of Fengyun Capital
In 1997, Lu Jinbo was active in various literary forums under the pseudonym "Li Xunhuan", publishing works such as "Lost in Love on the Internet" and "Edge Game", becoming a representative of the first generation of Online literary writers. At that time, he was called the "Troika of Online Literature" together with Ning Caishen and Xing Yusen, and was known as the originator of the domestic Internet literature industry.
In September 2000, Lu Jinbo joined the online literature website "Under the Banyan Tree". Until 2002, the international media giant Bertelsmann took over "Under the Banyan Tree", the founder William Zhu left, and Lu Jinbo bid farewell to the identity of "Li Xunhuan" and began to transform from a writer to a businessman.
In 2005, Lu Jinbo bought the rights to Han Han and Baby Anne and made it a bestseller. With the gradual expansion of the lineup of contracted writers, Lu Jinbo created a huge publishing kingdom and tested the waters of the film and television industry.
The former "Li Xunhuan" has now become the actual controller of the fruit and wheat culture, can he lead the latter to continue to pursue his dreams in the capital market?
On November 25th, Guomai Culture (full name: Guomai Culture Media Co., Ltd.) made its debut on the ChiNext board. The company plans to raise 350 million yuan for the construction of the copyright library.
The main business of Guomai Culture includes book planning and distribution, digital content business, IP derivative and operation. The prospectus shows that the company's performance has shown an upward trend in the past three years. In 2017, the company achieved revenue of 243 million yuan, which increased to 305 million yuan in 2018 and further increased to 384 million yuan in 2019. Net profit increased from 29.3182 million yuan in 2017 to 59.2158 million yuan in 2019.
(Image source: Prospectus)
However, in 2020, the book sales revenue of Guomai Culture has fallen sharply, resulting in a significant decline in the company's revenue. In the first three quarters of 2020, the revenue of Guomai Culture was 227 million yuan, down 10.96% year-on-year; the net profit attributable to the parent company was 0.24 billion yuan, down 17.86% in the same period.
Although the performance did not meet expectations, the news of the listing of Guomai Culture still stirred up a lot of splashes. This company specializing in book publishing has a "star-studded" shareholder list. Among the company's top 15 shareholders, Matrix Partners, Bona Pictures and PwC Tianqin are prominently listed.
In addition, many well-known writers such as Han Han, Yi Zhongtian, Zhang Haochen, Li Jihong and other well-known writers or their relatives appeared in the list of shareholders. If Guomai Culture is successfully listed, many institutional and individual investors behind it will usher in a capital feast.
The actual controller, Lu Jinbo, holds 32% of the shares and is worth nearly 340 million yuan
From literature to business, Lu Jinbo's entrepreneurial path is closely linked to the fruit and wheat culture.
The establishment of fruit and wheat culture dates back to 2012. At that time, Lu Jinbo and Han Han's mother Zhou Qiaorong jointly founded Guomai Culture, with a registered capital of 3 million yuan, of which Lu Jinbo held 90.00% of the shares and Zhou Qiaorong held 10%.
In the 8 years since its establishment, Guomai Culture has obtained multiple rounds of financing with a scale of more than 300 million yuan, and investors include Bona Pictures, IDG Capital, Huagai Capital, Qianshi Venture Capital and Jingwei China.
In addition to the blessing of star institutions, Guomai culture has also attracted a number of writers to directly or indirectly hold shares. Gomak Partnership is a shareholding platform composed of Gomak employees and co-writers, including Lu Jinbo, a total of 29 partners, ranking the sixth largest shareholder, with a shareholding ratio of 7.01%.
Zhou Qiaorong, once the second largest shareholder, after two equity transfers, the shareholding ratio dropped to 4.53%, and is currently the eighth largest shareholder. Among them, the first transfer was on March 22, 2017, when Zhou Qiaorong transferred his 0.24% equity in Guomai Culture to AsaiShi Venture Capital. The second time was on December 2, 2018, Zhou Qiaorong transferred her 1.5% stake to Zhejiang Media. Zhou Qiaorong also received a return of 28.5 million yuan from these two transactions.
The prospectus shows that after the public offering, Lu Jinbo holds 24.47% of the shares of Guomai Culture. At that time, how much will its value be?
For issues such as the valuation of the company, Fengyun Capital contacted Guomai Culture, but as of press time, it has not received a reply from the other party.
Fengyun Capital circle noted that previously some market participants calculated that according to the company's issuance of 18.01 million shares accounting for 25% and raising 350 million yuan, the market value of Mai Culture will reach 1.4 billion yuan after the listing.
If the listing valuation is 1.4 billion yuan, the founder Lu Jinbo's net worth will reach 343 million yuan.
Tencent, Jingwei China, and Bona Pictures shared hundreds of millions of yuan
Fruit and wheat culture has become the "darling of capital" since its birth. As the listing process progresses, the helmsmen behind it surface one by one.
According to the prospectus, Jingwei Chuangda holds 8.75% of the equity of Guomai Culture after the issuance, ranking the second largest shareholder. Based on the listing valuation of $1.4 billion, The value of Matrix's holdings is approximately $120 million.
Fengyun Capital noted that Matrix Partners was initiated by Matrix Partners China and Hangzhou Industrial Development Investment Fund, with Cao Guoxiong, chairman of Puhua Capital, and Shen Qinhua, founder of Puhua Capital, sitting in the seat, with the shareholding ratios of 11.25% and 3.5% respectively.
It is worth noting that the largest investor of Matrix Partners is Shenzhen Century Triumph Technology Co., Ltd., with a shareholding ratio of 25.00%. The four major shareholders of Shenzhen Century Triumph Technology Co., Ltd. are the main founders of Tencent, of which Ma Huateng holds 54.29% of the company's shares, Zhang Zhidong holds 22.86%, and Chen Yidan and Xu Chenye each hold 11.43%.
Bona Pictures is the third largest shareholder of Guomai Culture, holding 6.94% of its shares after its release. If calculated based on the valuation of Guomai Culture of 1.4 billion yuan, the shareholding value of Bona Pictures is about 97 million yuan.
The intersection of Bona Pictures and Guomai culture is not only financial investment, but also prompts Guomai culture to extend its tentacles to the film and television industry. During the reporting period, Guomai Culture participated in the investment in Han Han's films "Riding the Wind and Waves" and "Flying Life", with a total investment income of about 20 million yuan. Han Han is also one of the shareholders of Bona Pictures, with a shareholding ratio of 0.06%.
In addition, Puhua Tianqin, the fourth largest shareholder, holds 6.65% of the equity after the issuance of Guomai Culture. The managing partner of PwC is Zhejiang PwC Equity Investment Management Co., Ltd., and Wu Yihui, managing partner of PwC Capital, holds a 5.2% stake in PwC. Based on the valuation of Guomai Culture of 1.4 billion yuan, the shareholding value of PwC Ishik is about 93 million yuan.
Feng Tang, Yi Zhongtian, Zhang Haochen, behind the blessing of many star shareholders
As a shareholding platform for Guomai Cultural employees and cooperative writers, Guomai Partnership has gathered well-known scholars and writers such as Yi Zhongtian, Zhang Haochen, Li Jihong, etc., which can be described as a luxurious lineup. Based on the purchase of copyrights from contracted writers, Guomai Culture's book planning and distribution business has flourished and quickly gained a foothold in the domestic market.
In the field of copyright books, Guomai Culture 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 and many other writers and scholars. As of the end of June 2020, Yi Zhongtian's "History of China" series, Cai Chongda's "Skin Bag", Zhang Haochen's "I am only one you away from the world", Han Han's "Life I Understand" and other book products have sold more than one million copies, and Li Jihong's translation of "The Little Prince" has sold more than 3.7 million copies.
For some best-selling authors, working with Guomai Culture is not only a business partnership, but also a deeper bundle of interests. Guomai Culture's direct or indirect shareholding writers include Han Han, Yi Zhongtian, Zhang Haochen, Li Jihong, Huang Shan and Feng Tang, of which Han Han's mother Zhou Qiaorong holds 4.53%, Yi Zhongtian holds 0.19%, Zhang Haochen holds 0.2%, Li Jihong holds 0.28%, and Feng Tang's spouse Huangshan holds 0.19%.
Based on the valuation of Guomai Culture of 1.4 billion yuan, the value of the equity held by the above shareholders is about 63 million yuan, 2.6 million yuan, 2.7 million yuan, 3.9 million yuan and 2.6 million yuan respectively. Together, they will share this feast of wealth.
Which books have you read about Fruit and Wheat Culture? What are your thoughts on the listing of Guomai Culture? Feel free to leave a message and express your opinion.