Chinese Entertainment: Starting from 1996

Chapter 525 Merger
The foundation left by Golden Harvest is indeed quite solid, not only in terms of its distribution channels throughout Asia, but also in terms of a number of fixed assets.

The 1980s and 1990s were the peak period for Golden Harvest, which was also the craziest period for Hong Kong real estate.

At that time, the ambitious Zou Wenhuai was no longer satisfied with the film industry, and took advantage of Golden Harvest to enter the real estate industry.

In fact, at that time, many people in the Hong Kong film industry were attracted by Hong Kong's crazy real estate industry, and then they plunged into the real estate industry with the money they earned from hard work in filming.

But many Hong Kong stars have little education and are at a loss when deceived, so there were many news reports at that time about which stars went bankrupt and were in debt due to investments.

Typical examples are Ishida, one of the three giants of New First City, and the fat cat Zheng Zeshi. The former even ignored New First City in order to be able to focus on real estate.

You should know that among the Seven Monsters of Xinyi City, he has shares in the company, and only he, Mecca and Huang Baiming have shares, and they are called the Three Giants of Xinyi City.

At that time, New Town was at its peak, but Ishida gradually withdrew from New Town and even quit the film industry, and began to pursue his dream in the real estate industry.

But the real estate industry is not something a small-time tycoon like him can play in, and in the end he was cheated and almost went bankrupt.

Fat Cat was similar, but he did not enter the real estate industry directly. Instead, he invested in real estate stocks, and then was taken advantage of by someone. Not only did he invest all his fortune, but he also owed more than 20 million.

His wealth was not as rich as Ishida's, so his house was taken away. If it weren't for the help of his friends in the circle, his family would have almost been homeless.

After that, he kept working hard on filming to pay off his debts, and it took him more than ten years to pay off all his debts.

So, Hong Kong real estate is the cake of those big guys, and ordinary people are not qualified to have a seat at the table. Those who blindly rush in, except for a few lucky ones, almost all become materials for making cakes.

However, not all Hong Kong filmmakers are fools. Some of them are self-aware and know that they cannot get involved, so they choose to buy the property directly.

The net worth of these people almost all increased greatly later, like Zhou Runfa's naked donation incident which became a hot topic in later generations. Most of his net worth of more than 6 billion yuan was built up by real estate.

Otherwise, even if he continued to act in movies for his whole life and took on many endorsements, it would be difficult for him to have such a high net worth.

When it comes to Zou Wenhuai's level, he actually has no qualifications to sit at the table in the real estate circle, but he is smarter and does not go into real estate development, but chooses to buy a house.

After Golden Harvest went public in the early 1990s, its market value peaked at nearly 10 billion Hong Kong dollars, so at that time Zou Wenhuai even ambitiously wanted to buy a commercial building on the Victoria Harbour in Kowloon as an office building.

However, the real estate market in Hong Kong was going crazy at that time. Good land and buildings were in short supply. If you wanted to buy one, you needed not only financial resources but also influence.

Zou Wenhuai was obviously not good enough at that time, and ended up buying only three floors of the building.

In addition, he bought half of the properties of the 16 cinemas that Golden Harvest currently retains in Hong Kong. He also wanted to buy the others to complete the acquisition, but they were not willing to sell at all.

Almost all the remaining cinemas are located in the prosperous areas of Hong Kong, and many of the properties in the prosperous areas belong to large real estate companies. They have no shortage of money and use the properties to collect rent.

For example, the Wharf Holdings Group, which the ship chartering king left to his son-in-law, has Harbour City, whose annual rental revenue is over 10 billion Hong Kong dollars.

Therefore, those so-called old families in Hong Kong are actually quite powerful in their small territory in Hong Kong, and are not as weak as described in Hong Kong business novels.

In addition to purchasing properties in Hong Kong, Golden Harvest also does so in Taiwan and Nanyang. Many of the land or properties of cinemas belong to it.

Taiwan's Golden Harvest Cinema Chain has a total of 18 cinemas, half of which are concentrated in Taibei. Because there were more exchanges between the two places at that time, the nine cinemas in Taibei all belonged to Golden Harvest.

On the contrary, Golden Harvest Cinemas in other cities in Taiwan are all rented properties.

In Taiwan, Taiwan is the absolute center, accounting for almost more than half of the population and economy.

The real estate properties in Taiwan, Hong Kong, and Southeast Asia are worth more than 3 billion yuan in total.

Therefore, it can be said that Liu Zhou made a huge profit when he acquired Jiahe with less than 1 billion yuan and delisted it.

At that time, the market value of Golden Harvest Group was seriously inconsistent with its stock price, and it can be said that the stock price was greatly undervalued.

But there was no way out. The most important business of Golden Harvest Group was the film industry. Hong Kong films had hit rock bottom at that time, and Golden Harvest was performing poorly, so the stock price continued to fall.

As a result, almost everyone has forgotten the value of the fixed assets held by Jiahe Group, resulting in Jiahe's market value being far lower than its actual value.

This situation is actually very common among listed companies. For example, the share price of Kowloon Motor Bus, which was controlled by the Lei family, the owner of Golden Princess Entertainment in the 1980s, was very stable.

However, due to the large-scale development of Kowloon at that time, the stations and repair shops occupied by Kowloon Motor Bus decades ago occupied a large amount of land.

These plots of land are very popular with real estate companies and are of huge value, but the share price of Kowloon Motor Bus is still very stable and has not been affected much.

In the end, it was Uncle Li of Henderson Land Development who saw the opportunity and took over Kowloon Motor Bus first.

In fact, it’s not that no one has seen the value of Golden Harvest Group. Several groups of people, such as Peter Lam of Media Asia Group, have tried to acquire Golden Harvest, but all have failed.

Zou Wenhuai still has deep feelings for Golden Harvest. Although he no longer has the energy to manage Golden Harvest, he does not want to entrust the business to the wrong person. He hopes to hand Golden Harvest over to people who are serious about making movies so that its glory can be restored.

In the original time and space, Chengtian acquired Golden Harvest. At that time, Chengtian really looked very powerful. Not only did he have the capital to back him up, he also poached Wang Jinghua from the mainland and invested heavily in Wu Baige's "Red Cliff".

At that time, Golden Harvest could no longer be delayed, and Chengtian seemed to be a good choice, so Zou Wenhuai sold Golden Harvest to Chengtian.

In this life, Liu Zhou acquired Jiahe in advance and also obtained the recognition of Zou Wenhuai, so he became the lucky man and successfully completed the acquisition of Jiahe at a lower price.

However, Liu Zhou did not disappoint Zou Wenhuai's expectations. He not only led Golden Harvest to achieve revival, but also made it even better than when Golden Harvest was at its peak.

But for Liu Zhou, the reason why he acquired Golden Harvest was because of its strong foundation, rather than its valuable fixed assets.

So even though he knew that the property rights in Hong Kong were for 999 years, he did not divest it and put it in his own pocket, but kept it within the framework of the Golden Harvest Group.

This is even more true as for the properties in Taiwan and overseas. Given Jiahe's current market value, Liu Zhou believes that these are not only a burden but are also dispensable.

Therefore, in order to avoid trouble, to facilitate management, and to recover some funds, Liu Zhou decided to deal with the overseas cinema chains. Anyway, Golden Harvest International's channel network is mature and does not need Golden Harvest's overseas cinema chains to support it.

Last year, Gao Jun, the general manager of Golden Harvest Cinemas, was mainly responsible for managing Golden Harvest's overseas cinema chains.

He doesn't need to worry too much about purchasing land and building cinemas in the country. After all, he has roughly figured out the process and just needs to take charge of the overall process.

Gao Jun had been in Nanyang for nearly half a year and had finally completed the task, so he was confident when faced with Liu Zhou's questions.

“Mr. Liu, all the cinema chains and movie theaters in Southeast Asia have been dealt with. All the movie theaters and properties in the Philippines, Indonesia, South Vietnam and other regions have been sold.

There are a total of ten cinemas, four of which are self-owned properties, and they were sold for a total of nearly US$8 million, equivalent to nearly RMB 70 million.

Then, the self-organized Golden Harvest Cinemas Line in Singapore, Malaysia and Thailand was not sold. Instead, it was merged with the local Cathay Cinemas Line to form the Cathay Golden Harvest Cinemas Line, in which our Golden Harvest Group holds a 42% stake.

The newly formed Cathay Golden Harvest Cinema Line has also become the largest cinema chain in Singapore, Malaysia and Thailand. The operating rights are handed over to Cathay Corporation. We have sent a certain number of financial supervisors and then receive dividends every year. "

"Yes, this way we can get dividends every year, which is indeed better than a one-time deal." Liu Zhou nodded.

Cathay Pacific actually has a deep connection with Golden Harvest Group. The reason why Golden Harvest was able to stand firm despite the suppression of Mr. Shao was because it initially received support from Cathay Pacific.

The Hong Kong film industry in the 1960s was actually a two-horse race. One was Shaw Brothers and the other was Cathay. The two sides fought from Hong Kong to Taiwan and then to Southeast Asia, and the competition was extremely fierce.

However, in the late 1960s, Cathay Pacific's boss Lu unfortunately died in a plane crash while flying to Singapore. The Lu family had to shrink and give up the Hong Kong market and retreat to Southeast Asia.

It happened that at this time Zou Wenhuai left Shaw Brothers and founded Golden Harvest. In order to make things difficult for Shaw Brothers, the country gave great support to the fledgling Golden Harvest.

Not only did Cathay sell its cinemas and film studios in Hong Kong to Golden Harvest at a low price, but considering Golden Harvest's lack of funds, it also allowed Zou Wenhuai and others to pay in installments, which was almost the same as giving it away for free.

In addition, Cathay was also responsible for the distribution of Golden Harvest films in Southeast Asia, providing Golden Harvest with a large additional source of income.

Historically, although Sun Hung Kai Properties was very successful in Hong Kong, it took it several years to open up distribution channels in Southeast Asia.

Only after receiving nanny-level care from Cathay Pacific did Jiahe gain a foothold under the suppression of Mr. Shao. Then, with the efforts of Zou Wenhuai and others, Jiahe performed even better than Cathay Pacific itself.

In the 1960s, 1970s and even the early to mid-1980s, cinema companies in Southeast Asia were almost all controlled by two giants, Shaw Brothers and Cathay.

The former originally started his business in Nanyang, and then Mr. Shao came to Hong Kong to develop his business, but his brothers all stayed in Nanyang to run the family business.

Cathay Pacific's Lu family was originally a Lion City family. After withdrawing from Hong Kong, Cathay Pacific has also been fully committed to operating its business in Southeast Asia.

So these two companies are actually local residents in Nanyang.

Even though Hong Kong's Shaw Brothers Film Company has been suspended from trading, it is still a giant in Southeast Asia, and many Hong Kong film companies still need to rely on Shaw Brothers for distribution in Southeast Asia.

Golden Harvest, relying on the popularity of Hong Kong films and one hit after another, broke away from its dependence on Cathay and built its own cinemas and distribution channels.

Therefore, the three most powerful distributors in Nanyang are Shaw Brothers, Golden Harvest and Cathay.

Later, due to the decline of Hong Kong films and policy changes in some Southeast Asian countries, Golden Harvest began to shrink.

However, Shaw Brothers and Cathay were not affected much because they are Nanyang enterprises and the families behind them have deep roots in Nanyang, and they are still the cinema giants in Nanyang.

Even now, Golden Harvest International has a lot of cooperation with these two major cinema chains.

However, Golden Harvest's cinema chains in Southeast Asia were hit hard, especially in Indonesia, the Philippines, and South Vietnam. All the cinema chains were disbanded and cinemas joined local cinema chains.

In the end, only the Golden Harvest Cinemas in Singapore, Malaysia and Thailand were retained, and this was because the local policies had not changed much. However, despite this, it was still squeezed out by Cathay and Shaw Brothers.

In fact, all these are ultimately due to the decline of the Golden Harvest Group, otherwise they would not have been bullied so badly.

After Liu Zhou took over Golden Harvest, Golden Harvest regained its momentum and its overseas influence was re-established. Shaw Brothers and Cathay Pacific also changed from targeting each other to cooperating.

But the reason why Shaw Brothers and Cathay Pacific have such a good attitude is also related to the fact that Golden Harvest no longer continues to expand the scale of its cinema chain but instead maintains and expands its distribution channels.

After entering the new century, Shaw Brothers and Cathay did not have a good time. Not only did more and more competitors emerge, but the two companies were family businesses and had been operated for more than half a century, so they also had many internal problems.

If it weren't for the rise of Hollywood special effects blockbusters and Chinese-language blockbusters in the past two years, both companies would have been on the verge of making losses.

However, a skinny camel is still bigger than a horse. In Singapore, Malaysia and Thailand, the most powerful cinema companies are still Shaw Brothers, Cathay and Golden Wah. Golden Wah is the name of Golden Harvest's cinema chains in Singapore, Malaysia and Thailand.

Now that Golden Harvest is preparing to withdraw from the cinema market in Singapore, Malaysia and Thailand, it has attracted the interest of many investors, including Shaw Brothers and Cathay, both of which want to acquire Golden Wah.

Other peers who wanted to enter the cinema market in Singapore, Malaysia and Thailand also participated in the competition, but in the end it was Cathay's offer or proposal that won Gao Jun's favor, which was the merger of the two companies.

Golden Harvest wanted to get rid of its operational troubles and maximize its profits, while Cathay wanted to surpass Shaw Brothers and achieve rebirth through a merger and reorganization with Ka Wah, so the two parties hit it off.

However, Gao Jun had been in Nanyang for so long that he was very familiar with Cathay Pacific's situation. In order to prevent the merged company from suffering losses and not receiving dividends, Gao Jun requested that the merged company be handed over to professional managers.

Both parties act as supervisors as shareholders, but after all, Cathay Pacific owns the operating rights of the new company and has more shares, so they still have more say.

Gao Jun had no choice but to accept this. He couldn't completely kick Cathay Pacific out. They had the courage to change, but that didn't mean letting the Lu family lose control of Cathay Pacific.

But no matter what, the merger of Ka Wah and Cathay has not only surpassed Shaw Brothers in one fell swoop, but Cathay Golden Harvest has also become a leading cinema company in the entire Nanyang region.

This actually has another benefit, which is that it will make the cooperative relationship between Golden Harvest International and Cathay Pacific closer.

(End of this chapter)