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Caixin reporter: In the first quarter, there was an interesting phenomenon in mergers and acquisitions in the domestic film and w88 online casino industry. Listed companies that built machines, opened restaurants, and made fireworks began to invest heavily in film and w88 online casino companies. What do you think of this phenomenon?

Zhou Xuan: This phenomenon shows that the film and w88 online casino cultural industry is receiving great attention from the capital market, and all kinds of capital are very optimistic about the future of China's cultural industry. The capital market and film and w88 online casino companies are eager to connect, and film and w88 online casino companiesIPOThere are many difficulties in progress. At this time, mergers and acquisitions have become the choice of the capital market.

Film and w88 online casino companiesIPOThe reason for the difficulty stems from two aspects. First, the constraints of the external environment, the China Securities Regulatory Commission suspendedIPOIssue1More than a year has passed and it has just been restarted recently. A large number of companies from all walks of life planning to be listed are waiting in line to seekIPOThere is no hope for listed film and w88 online casino companies for a while. The second is the industry characteristics of film and w88 online casino companies. It is difficult for film and w88 online casino companies to achieve large-scale profits, and profits are not stable. There are thousands of film and w88 online casino companies in China, but most of them are in the1To2The status of a work released in the year. Very few companies can operate all aspects of preparation, filming, and distribution simultaneously within a year2With more than 11029_11087|More than one TV series, plus most film and w88 online casino dramas are losing money, there are very few film and w88 online casino companies that can truly form rolling scale development and sustained profitability, and it is difficult to meet the requirements of the GEMIPORequest.

The desire of capital outside the industry for the film and w88 online casino industry may ultimately result in capital’s disappointment in the film and w88 online casino industry. When listed companies in other industries such as Panda Fireworks, Hunan-Eqing, and Zhongnan Heavy Industry encountered difficulties in their main businesses, they entered the film and w88 online casino cultural industry with the mentality of completing their efforts in one battle and sought transformation of their main businesses. This approach is courageous, but the long-term strategic effect remains to be seen.

Caixin reporter: Since there are large risks, why is the market still experiencing the situation we have seen?

Zhou Xuan: Objectively speaking, senior people in the film and w88 online casino industry are still wary of the operational risks of film and w88 online casino projects, but it is even more difficult for outsiders to grasp it. In addition, the industrial environment is undergoing major changes. For example, the recent policy trend has dropped from four stars per drama to two stars per drama, and may even be one star per drama in the future. This is a huge challenge for listed companies pursuing stable growth performance. expected future2To3The competition in the film and w88 online casino industry has been fierce in the past two years. Everyone is completing their bets and striving for performance. The competition for distribution resources and good projects will become fierce. However,2To3After the annual betting period is completed and the bubble fades, who is the real master in this industry will slowly emerge.

Capital’s desire for the film and w88 online casino industry will also increase the speed of industry integration. For example, Q1 Panda Fireworks(600599.SH) Innovatively reached merger and acquisition agreements with China w88 online casino Wonderful and Dinu Media through pre-acquisition. The two companies each have to complete the bet5000Ten thousand yuan of audited net profit after tax. In addition, once the acquisition is decided, it will definitely take three years of betting. Analyzing the financial information of these two companies, it can be seen that the net profit after tax is achieved solely by relying on their own production and distribution capabilities5000It is very difficult. In fact, the acquired companies are more likely to use the channel of connecting with the capital market to integrate high-quality project resources in the industry through industry contacts in order to complete the bet. It can be expected that the popularity of the film and w88 online casino industry is far from receding, and the capital market in the future will complete mergers and acquisitions in more innovative ways.

Caixin reporter: Can you tell us specifically what kind of innovative acquisition method it is?

Zhou Xuan: For example, Alibaba acquired Cultural China and acquired a platform for future cultural business through additional capital injection. Another example is the acquisition of Gaojin Foods by Yinji Media, which is a typical case of reverse merger and backdoor listing. Hualubaina's acquisition of Blue Flame is an innovative acquisition that uses the capital market to make a small fortune.

In terms of specific details, each company has its own characteristics and embodies different strategic ideas. When Panda Fireworks acquired Huahai Times, it completely locked up and banned the persons in charge of shares held by Huahai Times, and did not give them board seats. This means that Huahai Times has objectively become a business unit of Panda Fireworks. The acquisition of Datang Brilliance by Zhongnan Heavy Industry is different,Chairman Wang HuihePEBoth obtained board seats in Zhongnan Heavy Industry. This gesture of Zhongnan Heavy Industry is more sincere, indicating that its transformation into the cultural industry is relatively complete and is a true strategic transformation.

Then how to innovate further? At present, almost all small and medium-sized film and w88 online casino companies in the industry are beginning to look for a way out. When competitors become more and more powerful, it will be difficult for small and medium-sized film and w88 online casino companies to cooperate with core resources in the industry such as famous editors, famous directors, and famous actors. Core resources don't come just by giving money, they depend on your project, your strength and your platform. In addition, the amount of money invested in a single film and w88 online casino project is increasing, and the loss of one drama may bring down the entire company. Nowadays, if there are no TV stations, websites or video websites to invest in the projects of small and medium-sized film and w88 online casino enterprises, there are30%To40%In terms of proportion, distribution channels and repayment cannot be guaranteed, and the risk is very high.

Small and medium-sized film and w88 online casino companies will find that the situation is getting more and more difficult as they go on, and they are likely to band together to keep warm in order to develop in scale. Many small and medium-sized film and w88 online casino companies now realize that the first and second rounds of release are only short-term effects on the losses and profits of a drama. What is truly valuable is the company’s long-term accumulated platform value and brand value. Brand value is the value of resources owned in the industry. Several small and medium-sized film and w88 online casino companies with strength, connections, and resources in the industry have integrated together to increase scale on the one hand, and seek standards on the other to build their own platforms. After developing their internal capabilities, they will seek opportunities to connect with the capital market. Of course, the difficulty of this approach lies in the difficulty of integration, which requires sufficient crisis awareness, cooperation spirit and standardized operating concepts.

Caixin reporter: What changes do you think will happen to the structure of the film and w88 online casino industry in the future?

Zhou Xuan: I think China’s film and w88 online casino industry is moving from the “Contact of a Hundred Schools of Thought” in the past ten years to the “Spring and Autumn Period and Warring States Period”. In about ten years, the Five Hegemons of the Spring and Autumn Period and the Seven Heroes of the Warring States Period will be formed. Listed companies such as Huayi Brothers, Hualu Baina, Enlight Media, Huace Film and w88 online casino, etc. first formed platforms, while small businesses built their own core capabilities to provide content or professional services for these platforms. The trend of specialization among small businesses will become increasingly obvious. For example, those who make pre-roll advertisements and those who specialize in war dramas. Professional small and medium-sized companies will have smoother connections with the capital market and will be easier to acquire.

In the next ten years, mergers and reorganizations in the film and w88 online casino industry will become more frequent, and acquisitions between listed companies in film and w88 online casino culture may also occur. There is still a lot of room for growth for Chinese film and w88 online casino companies, although the entire industry is currently a little overhyped. We have to see that there is a huge gap between Chinese film and w88 online casino companies and world-class film and w88 online casino companies. The simplest example is Huayi Brothers and Disney. The former’s annual sales revenue15billion yuan, the latter is450$100 million, almost2700100 million yuan.

Caixin reporter: We have contacted some film and w88 online casino companies and found that the production, marketing and Internet of film and w88 online casino products are now inseparable. What impact do you think the combination of the film and w88 online casino industry and the Internet will have on the industry?

Zhou Xuan: To put it figuratively, online platforms such as LeTV, Youku, and iQiyi have largely evolved into private TV stations that are subject to less supervision. Online platforms will become one of the main channels for people to enjoy film and w88 online casino works in the future. For younger viewers, the value of online platforms will even exceed that of TV stations. Nowadays, many young people only surf the Internet and do not watch TV. For film and w88 online casino production companies, the distribution plan must be to propose an all-media plan that integrates satellite TV, terrestrial and network resources to maximize the benefits of film and w88 online casino products. In addition, as competition becomes increasingly fierce, the distribution of film and w88 online casino works should be as far ahead of production as possible. After the script and the main creator are recognized, risks can be reduced and profits locked in through pre-sale. A good example of a TV series being sold before being auctioned is a good example.

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