Chinese Entertainment: Starting from 1996

Chapter 527 Standing on the shoulders of giants

Although Golden Harvest had invested in building luxury cinemas in the four first-tier cities as early as 2006, the Golden Harvest Cinema Chain did not really begin its large-scale expansion until after it went public.

In 2007, Golden Harvest acquired a small cinema chain company and obtained a cinema license in mainland China. However, at that time, it was busy with the group's listing and did not pay too much attention to the cinema chain company.

The cinemas under the acquired cinema chains are still relatively old and need to be modernized.

Moreover, at that time, the focus of Golden Harvest Group was still on Golden Harvest Films and Golden Harvest International. The former was intended to make the performance data look better and thus increase the valuation and stock price.

The latter is an important guarantee for Golden Harvest Group to completely distance itself from other domestic film and television companies. Golden Harvest has a foundation in overseas distribution, so of course it must pick it up first.

Therefore, it is inevitable that the cinema chains are somewhat neglected. However, Golden Harvest has close cooperation with China Film Group Corporation and is not afraid of being strangled by the cinema chains, so it is not so anxious.

After the company went public, its other branches had also become regular, and the group began to invest heavily in Golden Harvest Cinemas.

Golden Harvest raised nearly 3 billion yuan in funds when it went public, and 2 billion yuan was invested in Golden Harvest Cinema Line.

From the second half of 2009 to the end of this year, within two and a half years, the billion yuan will be spent.

In addition, the profits earned by the cinemas that have been in operation for the past two and a half years total nearly 400 million yuan, which means that by the end of this year, the total investment of Golden Harvest Cinemas will reach 2.4 billion yuan.

Although not many cinemas have been built, at least the foundation for the next few years has been laid.

According to the plan made by the Golden Harvest Cinema Line management headed by Gao Jun, it will take another five years to build all the purchased land into cinemas and put them into use until 2016, and another investment of billion yuan.

In this case, an average annual investment of 2.4 million yuan is required, and the cinema chain company’s own annual profits can afford it in the future, and there may even be a surplus.

Now that Golden Harvest Cinemas has been sorted out, it will not participate in overseas operations and will receive dividends every year, which can reduce a considerable amount of expenses, and there will also be nearly 100 million yuan in dividends every year.

Then the cinema chains in Hong Kong and Taiwan were merged into the mainland's Golden Harvest Cinemas. The cinema companies in these two places are very mature, with relatively stable profits, and their combined annual revenues are tens of millions.

These two together can offset most of the investment in building a cinema.

What's more, a number of cinemas in the mainland will join the Golden Harvest Cinema Line every year, and future profits will be higher year by year.

Therefore, the group no longer needs to invest money in Golden Harvest Cinemas in the future.

This was a bit beyond Liu Zhou's expectations. He thought that the group would need to continue investing money in the cinema chain, and a lot of it.

This is undoubtedly good news. From now on, the only business of Golden Harvest Group that requires large investments is the Golden Harvest Film and Television Industry Base.

If Golden Harvest Group can maintain the same high income as last year, Liu Zhou feels that it will not need a loan, and the group's own profits can pay for the investment in the film and television base.

I just don’t know whether the company can maintain last year’s profit level in the next two years. After all, Golden Harvest Group went through a huge boom last year.

But these are just minor details. It has no impact on whether the profits in the next two years are sufficient or not. It will be easy for Jiahe Group to obtain loans or financing, and it does not have to worry about funding issues.

Thinking of the Golden Harvest Film and Television Industry Base, Liu Zhou couldn't help but look at the group's president Zhang Zhao.

As the largest investment project in the history of Golden Harvest Group, the Golden Harvest Film and Television Industry Base has been personally in charge of the group's president Zhang Zhao since the project was first launched.

Since the launching ceremony last year, the construction of Jiahe Film and Television Industrial Park has officially begun. Thanks to the strong support from Hangzhou City, the infrastructure work has progressed rapidly.

In addition, sufficient preparations had been made before construction. With sufficient funds, the industrial park is changing day by day, and the earliest studios have already been put into use.

Last summer, the filming of "The Voice of China" was carried out in a studio that had been built in the industrial park.

Liu Zhou was quite relieved about Zhang Zhao. He was very busy last year and did not have much time and energy to pay specific attention to the situation of the industrial park. However, from the documents handed over to him, he learned that the entire project was proceeding in an orderly manner.

Now Liu Zhou also took this opportunity to understand the specific situation of this project, and also let other senior executives know about it.

"Mr. Zhang, please tell us about the progress of the Golden Harvest Film and Television Industrial Park."

"Okay, Mr. Liu." Zhang Zhao flipped open the documents on the desk and said slowly, "Although the launch ceremony of Jiahe Film and Television Industrial Park was in June, construction actually started after the cooperation with Hangzhou City was finalized at the beginning of the year.

The start-up capital for the entire project is 1.5 billion yuan, of which 1 billion yuan is a low-interest loan provided to us by the Hangzhou City, and the other 500 million yuan is funds allocated by ourselves.

However, by the end of last year, the 1.5 billion yuan had been spent, with nearly 1 billion yuan spent on purchasing the land alone, and the remaining 500 million yuan invested in construction.

Because of the annual budget, the funds needed for the past two months are still in arrears, but the money needs to be transferred next month at the latest. They agreed to advance the funds because they trust us, Jiahe."

"So the 1 billion yuan loaned to us by Hangzhou City has now returned to their hands?" Liu Zhou said with a smile.

"If you really calculate it, it is true. Almost all the loan money was used to buy land." Zhang Zhao also replied with a smile.

Of course this is just a joke. When money flows from the bank to Jiahe and then to the Hangzhou authorities, it is not just a simple transfer from left hand to right hand.

Moreover, the Jiahe Film and Television Industrial Park covers a total area of ​​30 square kilometers. Moreover, it is located in a big city like Hangzhou. The price is actually not very expensive. Hangzhou even offers considerable discounts.

If the Jiahe Group at that time could squeeze in, it could have come up with 1 billion to buy the land, but the subsequent construction funds would not be enough.

This 1 billion low-interest loan is also one of the conditions for Jiahe Film and Television Industrial Park to settle in Hangzhou.

Now it seems that I took out too little loan. I should have borrowed more earlier. After all, the interest rate is low and there is no repayment pressure.

"How much funding do we need this year?" Liu Zhou asked.

"The Jiahe Film and Television Industrial Park is planned to be completed in three and a half years and is expected to be put into use by the end of 2013. The major expenses in the early stage are the purchase of land and the cost of infrastructure such as the three connections and one equality.

The initial 1.5 billion yuan has already been paid, and the various studios, film and television cities, hotels and other facilities are currently under construction, which require more funds.

This year and next year, we will need about 2 billion yuan in funds. The year after next, we will mainly do the finishing work, so maybe less, but we will also need about 1 billion yuan." "So, the 2 billion yuan we need this year will be enough for the profits of each branch, right?"

"That's right. The heads of each branch have just reported the relevant situation. I have also summarized it here. Excluding the funds required by each branch, the available funds for the group are 2.3 billion.

Excluding the 2 billion yuan investment in the Jiahe Film and Television Industrial Park, there is still 300 million yuan of surplus funds. "

"Great, this way I don't need to take out a loan for the time being."

Although the loan has almost no impact on Jiahe now, Liu Zhou is still quite conservative and doesn't like to owe money to the bank.

Therefore, Liu Zhou has rarely taken out loans along the way. The last loan he took out was ten years ago, when the Internet bubble burst in 2001.

That was an opportunity that Liu Zhou remembered and had the chance to realize to make a fortune, so in order to seize this opportunity to change his destiny, Liu Zhou borrowed 40 to 50 million yuan from the bank, and then gathered all his own funds to raise 10 million US dollars to buy Internet companies at the bottom.

There were no surprises later. With the complete rebound of the Internet industry, Liu Zhou's wealth began to grow rapidly.

This also gave him enough funds to acquire Golden Harvest Group, allowing him to complete his stunning transformation from a director and studio owner to a film and television tycoon.

Although Liu Zhou's Zhoushan Studio was developing quite well at that time, it was still very difficult to develop from a small studio into a giant in the industry.

Even if Liu Zhou has a golden finger, it is not omnipotent. After all, you were a director who could bring benefits to everyone at that time. Even if you were a little arrogant, no one would suppress you too much.

Even if you set up a studio and get a little more profit, that's fine, but if you want to sit at the table and share the cake, it won't be that easy.

This involves business warfare, which is not as simple as investing in a movie. At that time, regardless of whether there is a conflict of interest or not, other companies may step on you.

If you want to build a company, you will face many difficulties.

Even if you can make it out, the scale of Zhoushan Company is probably about the same as that of Huayi today, and it cannot be compared with Huayi of the same period in the original time and space.

Not to mention developing into the current scale of Golden Harvest Group, let alone other things, an overseas distribution company like Golden Harvest International could not be established.

The acquisition of cinema chains, film and television industry bases, and Summit Entertainment is also out of the question, because even if you go public, you don’t have enough funds to do these things, or even just one thing can’t be accomplished.

Therefore, the acquisition of Golden Harvest can be regarded as an important turning point in Liu Zhou's film career.

This not only helped Liu Zhou survive the fierce and brutal competition in the early stages of the industry, but also made him someone who could sit at the table and share the cake.

With this foundation, coupled with Liu Zhou's golden fingers, the two are a perfect match. This also allowed Jiahe Group to quickly complete its revival in his hands, and the results are becoming more and more brilliant.

Coupled with the rich historical heritage accumulated by Jiahe over more than 30 years, Liu Zhou's prophetic golden finger can play the greatest role.

Therefore, in just six years, Golden Harvest Group has expanded rapidly, from a market value of just HK$1 billion to a market value now approaching HK$100 billion.

Currently, except for the cinema chains, other branches are industry leaders.

It goes without saying that Golden Harvest Films is far ahead in the pack. After "The Legend of Zhen Huan", Golden Harvest Films has also become the number one TV drama production company in China.

After all, TV series produced by Golden Harvest Films have become the annual box office champions for several years, and there are one or two annual hits every year.

Even Hairun and Xinbaoyuan, which specialize in making TV dramas, are far behind in this result, not to mention Tangren and Rongxinda.

As for the later famous Noon Sunshine, it has not been established yet and their team is still hiding in Mountain Shadow.

As for Golden Harvest Entertainment, it goes without saying that when its artist management department was still an independent company, it was regarded as the strongest company management department in the industry. No other company's management department or management company's scale can match it.

At that time, Zeng Jia was known as the number one agent in the country. As a rising star, she overwhelmed the veteran agent Wang Jinghua.

Therefore, Golden Harvest Entertainment, which was spun off from the brokerage department of Golden Harvest Group, is undoubtedly the top brokerage company in the industry from the very beginning.

Not to mention Golden Harvest Productions, which is the only company specializing in producing variety shows so far.

However, after the broadcast of "The Voice of China", Golden Harvest Productions made a lot of money, and many people have noticed the variety show market.

Now many people are eager to enter the variety show field. After more than half a year of preparation, I think the second variety show company should open this year.

Therefore, as long as Golden Harvest Group fills in the last gap of cinema chain, it will truly become a hexagonal warrior in the film and television industry, leading the industry in every field.

And by 2016, when all the planned cinemas are put into operation, Golden Harvest Cinema Line will become one of the top three, or even top two in the industry.

It should be no problem to surpass China Film Star Cinema, but Wanda Cinemas may be a little bit incomparable.

The next eight or nine years will be a period of rapid development and peak for Wanda. Wanda Cinemas will also expand rapidly as Wanda Plazas open across the country.

Moreover, Wanda Cinema Line is the same as Golden Harvest Cinema Line in that all of its cinemas are self-operated, and the cost of building a cinema is much lower than that of Golden Harvest.

However, even so, Golden Harvest Cinemas will be a new force in the industry. It will continue to expand to third- and fourth-tier cities, and by the time Wanda goes bankrupt, it may become the number one in the industry.

Almost all these achievements were made on the basis of the original Jiahe. It can be said that Liu Zhou was standing on the shoulders of giants.

The next eight or nine years will be a period of rapid development and peak for Wanda. Wanda Cinemas will also expand rapidly as Wanda Plazas open across the country.

Moreover, Wanda Cinema Line is the same as Golden Harvest Cinema Line in that all of its cinemas are self-operated, and the cost of building a cinema is much lower than that of Golden Harvest.

However, even so, Golden Harvest Cinemas will be a new force in the industry. It will continue to expand to third- and fourth-tier cities, and by the time Wanda goes bankrupt, it may become the number one in the industry.

Almost all these achievements were made on the basis of the original Jiahe. It can be said that Liu Zhou was standing on the shoulders of giants.

(End of this chapter)