Film And Television Listed Companies "Save Themselves": Selling Houses, Offering Additional Shares, Changing Owners "Content Is King" Or Causing Online Channel Changes

"Summer is coming, and winter is not over yet." Some people describe the current film and television industry in this way.

On June 10, the official micro blog of Bona Pictures Group released a message of deep sorrow. Huang Wei, vice president and senior filmmaker of Bona Pictures, died in the early morning of June 10 at the age of 52.

Although it is unclear whether this is related to the industry situation, this news has triggered people's feelings about the long suspension of cinemas.

"It's time to consider the resumption of work and production of the cinema." On June 10, director Jia Zhangke said through microblog. "The level II emergency response to major public health emergencies in Beijing has been downgraded to level III, and most of the country's businesses have opened up. Some film companies lose 1 million yuan a day, and 1 million theater practitioners need to survive."

From the perspective of listed companies in the film and television industry, when the epidemic led to the suspension of cinemas, the performance of the first quarter suffered collective losses, cash flow was under pressure, and the performance of the second quarter was not optimistic.

In the face of difficulties, major shareholders sell real estate and listed companies make up and change owners through additional issuance and bond issuance, all of which become means of self rescue. With the long-term shutdown of cinemas, the ecology of the film and television industry is also changing.

Self rescue

On June 5, according to media reports, Wang Zhongjun, chairman of Huayi Brothers (300027.SZ), sold the Fuhui Haoting in the middle of Hong Kong held by him for 220 million Hong Kong dollars.

Although it is not clear for the time being whether this move is intended to transfuse blood to listed companies, it is an indisputable fact that Huayi Brothers, once brilliant, has lost money for two consecutive years.

In 2018, Huayi Brothers suffered the first loss of 1.093 billion yuan, down 231.97% year on year. In 2019, Huayi Brothers suffered a loss of 3.96 billion yuan, with a year-on-year decline of 262.32% in net profit; The net cash flow from operating activities was 90.356 million yuan, down 84.48% year on year. Affected by the epidemic, the first quarter report showed that Huayi Brothers continued to lose 143 million yuan in the first quarter.

According to relevant regulations, if the company has suffered losses for three consecutive years, the GEM listed company will be delisted directly. This means that if we can't turn losses into profits this year, we will be delisting.

The epidemic has worsened the situation of the entire film and television industry. Rescuing companies in danger and replenishing working capital is undoubtedly the top priority of Huayi Brothers.

In addition to the move of selling houses, Huayi Brothers also tried to ease the pressure of cash flow by introducing star battle investment through regular increase "blood supplement".

It had previously issued a plan for non-public issuance of A-shares, and planned to issue no more than 824 million shares in total at 2.78 yuan per share, and raise no more than 2.29 billion yuan in total, which would be used to supplement working capital and repay loans after deducting the issuance costs. The war investors introduced include Ali Pictures, Tencent, Sunshine Life, Xiangshan Dacheng Tianxia, the listed company Yuyuan Shares of Fosun, Minghe Group, Xintai Life, Sanli Economic Holdings and Shandong Jingda.

In fact, under the epidemic situation, the cash flow of the film and television industry is tight, and fixed growth has become an important means of replenishment.

In addition to Huayi Brothers, Wanda Films, Jiecheng Shares, Contemporary Oriental and other film and television companies have also released refinancing plans, all aimed at repaying bank loans and replenishing working capital.

In addition, "change of ownership" has also become one of the options. For example, Tangde Film and Television has sold itself to Zhejiang Radio and Television.

In 2019, Tangde Film lost 107 million yuan. In the first quarter of this year, affected by the epidemic, the company continued to lose 26.9348 million yuan.

The "change of ownership" announcement disclosed that the share transfer of Tangde Film and Television is conducive to giving full play to the mechanism advantages of the integration and development of state-owned capital and private capital. Both parties agreed to actively promote the introduction of strategic investors to the company, and Dongyang Finance and Dongyang Juwen agreed to assist Tangde Film and Television to increase the financing of no less than 200 million yuan after the transaction delivery, and choose the opportunity to promote the injection of high-quality assets that can enhance the company's core competitiveness into the company in accordance with regulations.

In fact, state-owned capital has become an important force in the capital that helps film and television companies.

The 21st Century Economic Report found that since this year, three A-share film and television companies have "married" state-owned assets. In addition to Tang De, there are Huayi Brothers and Beijing culture.

At the end of April, when Huayi Brothers announced that it planned to raise 2.29 billion yuan, Shandong Jingda Technology Industry Development Co., Ltd., a state-owned investment, also appeared in the list of fixed increase. The previous February, Beijing Wenke Investment Consulting Co., Ltd. with the background of state-owned capital announced to become its largest shareholder in Beijing Culture.

Ecological change

Since January 24, cinemas have been closed for more than 100 days, which makes the production, distribution and screening of the film and television industry chain suffering.

"Of course, the most direct pressure is on the cinema itself. They have the part of physical maintenance, and there will be pressure on both the rent and other fixed costs. The pressure on the upstream producers is also great, they have not started, and some projects have been put on hold after being approved, which is also a huge cost, and it is still unknown when they can be shown. The distribution part in the middle basically has no room to cook. The upstream, midstream and downstream have a great impact. " Wei Pengju, Dean of the Institute of Culture and Economics, Central University of Finance and Economics, said.

The first quarterly report shows that the suspension of cinemas has hit cinemas listed companies hard. Wanda Film lost 600 million yuan in the first quarter, down 249.75% year on year. In addition, many hospital line listed companies, including Jinyi Film and Television, Huayi Brothers and Happy Blue Ocean, all suffered substantial losses in the first quarter of this year.

At the same time, the industry clearing is already in progress.

On May 27, the China Film Association released the Research Report on the Living Conditions of Cinemas, which showed that the total box office in the first quarter of this year was 2.238 billion yuan, down 88% year on year. Of the 187 cinemas interviewed, as many as 42% thought they were at risk of "closing their doors".

The date for the most critical restart of the film and television industry has not yet been finalized.

However, after such a long pause, can the consumption of the film and television industry return to the pre epidemic level? How will the film and television industry respond?

In this regard, Wei Pengju believes that there is a willingness to consume, but in the short term, people may face the pressure of high-quality content supply. The content of some early films has been released on the Internet, which means losses to cinemas. At present, the recovery of viewing is not clear, and it is not a good time for some blockbusters to be released.

In addition, under the influence of the epidemic, people may lack the ability to consume movies. "It is suggested that cinemas can carry out diversified operational adjustments, such as increasing click screening, playing old movies, opening small private rooms, adopting a low price strategy of" exchanging price for volume ", etc., and also try to use the offline space of cinemas and e-commerce live broadcast to do some integration." Wei Pengju said.

The epidemic has also made the industry more aware of the ecological changes.

"The film industry will become more and more 'impure'. Traditionally, film is the art of showing on the big screen. But later, the content of films may be done according to the standards of the big screen, but it will become more and more online. If cinemas want to survive, their businesses may become more and more diversified, and they will layout towards some non film formats," said Wei Pengju.

"The light capitalization of the entire cultural industry should be the general direction and trend, and the cultural industry should still do the content, which is always the core. And this epidemic also shows that the content should be relatively more self adjustable. Essentially, what everyone needs is not the cinema, but the content provided by the cinema." Wei Pengju said.

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