Chinese Entertainment: Starting from 1996

Chapter 585 Financial Report
As time enters 2012, the film and television industry seems to be much busier again.

This time it’s not that there is a blockbuster movie being released or any big news being revealed, but that several large film and television companies have successively announced their annual financial reports.

As of now, five companies in the film and television industry have gone public.

For listed companies, they are required to disclose the company's quarterly and annual financial reports to shareholders every quarter and every year.

The reason why some listed companies like to cook the books is to cope with the financial reports disclosed to the public.

This is because if a company suffers heavy losses and its financial statements are ugly, investors will naturally not be optimistic about the company's stock, and the share price will fall accordingly.

However, for several film and television companies listed last year, there was no need to cook the books at all.

Every company has a considerable profit.

The first to announce its financial report was Huayi, which had a revenue of 7.6 million yuan and a profit of 2.3 million yuan last year.

Moreover, Huayi plans to make the film town the company's key investment direction for the next five years, which is also favored by many investors.

So after the financial report was disclosed, Huayi’s stock price also rose accordingly, and its market value is almost reaching 15 billion.

Next is Guangxian, which had a revenue of 5.8 million yuan and a profit of 1.1 million yuan last year.

However, compared with Huayi, Guangguang's profits are mostly generated by its existing TV programs, and the profits contributed by the film industry are less than 45%.

But compared with last year, the profits of the film sector still increased.

With the popularization of the Internet, Guangguang TV programs will become less and less popular.

It can be said that Wang Changtian has a good vision and knows how to lead the company's transformation in a timely manner.

As the last of the three giants, Bona's performance is somewhat inferior.

Because in the past two years, movies like "Flying Swords of Dragon Gate", "Ip Man", "Cold War" and so on, which were originally supposed to be produced by Bona, were mostly snatched up by Golden Harvest.

Most of the other film projects invested in by the company failed, so Bona’s financial report last year was much uglier than that of Huayi and Guangguang.

In 2011, Bona's revenue was 3.2 million yuan, but its profit was a pitiful million yuan.

These profits still come more from the distribution of movies.

However, Bona’s financial report has little impact on its stock price.

Because Bona is listed on NASDAQ, its stock price is incredibly stable.

As the first and only Chinese film and television company listed on NASDAQ, it has a good reputation, but only Yu Dong himself knows how bitter he feels.

Except for the period when the stock price first went public, which lasted for a period of time due to the support of investment institutions, the stock price continued to fall until it reached the stock issue price.

Since then, Bona’s stock price has been hovering around the issue price.

This made it impossible for Yu Dong to raise funds.

Seeing the share prices of Huayi and Guangxian rising rapidly, Yu Dong felt extremely regretful.

Before the IPO, everyone was amazed that Yu Dong was able to lead Bona to go public in the United States. Now, many people in the industry call him an idiot.

Yu Dong also felt that he was quite stupid and that he must have been out of his mind to let the company go public on NASDAQ.

Other companies were able to easily raise funds and develop rapidly, but Yu Dong raised some funds when it first went public, but nothing else.

As a result, Bona’s development in the cinema chain is far less than that of Huayi and Guangguang.

However, Yu Dong has made up his mind to change this situation.

Since the second half of last year, he has been contacting domestic financial institutions to raise funds to delist Bona from NASDAQ and then re-list it in China.

He succeeded in later life because Bona’s performance was relatively good at that time.

This time, Bona’s performance has been much worse. It will definitely cost a greater price to raise enough funds.

Then Huace, the first domestic TV drama stock, also released its financial report for last year, which surprised most people.

Last year, Huace’s revenue was 6.2 million yuan and its profit was as high as 2.1 million yuan, which is higher than Guangxian and even almost surpassed Huayi.

No one expected that Huace, which mainly produces TV dramas, would make so much money.

This has also caused some investors to turn their attention to companies that mainly produce TV dramas.

I feel that there was a lack of clarity in the past. Although the companies that mainly produce TV dramas are less well-known, they still make just as much money and are making a fortune in silence.

Huace’s annual report will certainly stimulate more film and television companies to enter the stock market.

Even if they don't want capital, it will push them to go public, unless you are like Cai Yinong of Tangren, who values ​​control of the company as your life and is extremely conservative.

As these four listed film and television companies released their annual financial reports one after another, everyone turned their attention to Golden Harvest Group, the number one domestic film and television stock.

However, everyone waited for several days but there was no movement from Jiahe.

We didn’t get the financial report of Golden Harvest Group, but we got the news that the box office of “The Flowers of War” exceeded 1 billion.

On January 18, after 41 days of release, The Flowers of War officially broke through 1 billion yuan at the box office, becoming the fifth domestic film to break 1 billion yuan at the box office.

It is also the third domestic film to achieve this result.

This sensational news naturally attracted extensive media coverage and heated discussions among netizens.

The focus of attention these days has become Zhang Yimou, and the new "Mou Girl" Ni Ni has also risen from an amateur to a popular young star in the industry.

Some people in the circle fell silent again.

Although they knew that the box office of "The Flowers of War" could potentially exceed 1 billion, they still feel uncomfortable now that it has actually been achieved.

Jiahe is really too strong.

Not only did they have Liu Zhou, the king of commercial films, but Zhang Yimou, the only big director who could rival Liu Zhou in terms of box office appeal, was also recruited by Golden Harvest.

Not to mention that in addition to the two of them, there are two top-tier directors, Xu Ke and Ning Hao, and Golden Harvest is also very good at promoting new directors.

The three domestic films that have now grossed over 1 billion yuan were all produced by Golden Harvest.

Even in the top ten Chinese-language film box office rankings, except for "Let the Bullets Fly", the other nine are all Golden Harvest films.

Sometimes, when looking at the powerful strength displayed by Jiahe, the Wang brothers, Yu Dong, Wang Changtian and others couldn't help but feel a sense of powerlessness.

Even if they were to unite, they might not be able to be compared with the Golden Harvest Group.

In the future, the only three giants that have the strength to compete with Golden Harvest may be Wanda, Penguin and Ali.

Wanda is now on a strong momentum. After more than a year of digestion, it has completed the integration of MGM, one of the seven major Hollywood studios.

Wanda Cinema Line is the largest cinema chain in China, and it has ample funds. It has been recruiting people and preparing to expand its business last year. So whether in China or Hollywood, Wanda is benchmarking Golden Harvest.

Perhaps its distribution capabilities in Asia are not as good as Golden Harvest, but Wanda has already planned to establish a global cinema chain.

Coupled with MGM's distribution strength in Europe and the United States, Wanda has the opportunity to catch up with Golden Harvest in a short period of time except for its production capabilities.

As for Ali and Penguin, it goes without saying that these two largest Internet giants have nothing in abundance but a lot of money.

You can build a large comprehensive company by spending money. It may not be as comprehensive as Golden Harvest, but it can definitely compete with Golden Harvest.

However, these two companies have not yet fully exerted their efforts. The one that has begun to exert its efforts is Wanda, which has been accumulating momentum.

But Ali and Penguin should be here soon. The market value created by the film and television industry in this life is much larger than that in the same period of the original time and space. Not only these two companies, but many investment companies have also turned their attention to the film and television industry earlier.

Jiahe is not afraid of challenges, and now Jiahe has built a deep enough moat.

Although there is a lot of uncertainty in film production, Golden Harvest no longer relies on profits from film production to maintain its operations as it did in the past.

Distribution capabilities and theater chains are the core of Golden Harvest's future success. After all, Liu Zhou's golden finger will disappear, and by then Liu Zhou will not be able to guarantee that Golden Harvest's production can maintain its current level.

With core distribution capabilities and theaters, even if the production fails, it will not have much impact.

At least it won't be like Bona, which was badly hurt by the failure of "Operation Jiaolong".

I think the entertainment industry will be very lively in the next few years.

Let's get back to the topic. In fact, on the day when "The Flowers of War" broke the 7.8 billion mark, another movie released during the same period, "Flying Daggers of Dragon Gate", had already reached a box office of million after days of release, almost reaching million.

The box office of "Flying Daggers of Dragon Gate" also officially surpassed the 7.2 million of "The Martian", ranking fourth on the Chinese-language film box office list, second only to the three billion-box office movies.

However, the box office potential of both films has been almost exhausted.

"The Flowers of War" should still be around 10 million, and "Flying Daggers of Dragon Gate" should be about the same size with a box office of over 800 million.

Compared with the original time and space, these two movies made 600 million and 500 million respectively, and now their box office has increased by 300 to 400 million.

There is no doubt that as long as there is less internal friction and slander, and the audience spontaneously judges based on the quality of the film itself, high-quality films will generally stand out and get more box office revenue.

But the film and television industry is also a business, and it is impossible for "The Flowers of War" and "Flying Swords of Dragon Gate" to coexist harmoniously.

Most of the cases are like "Painted Skin" and "Legend of White Snake", where both of them want to kill the other and enjoy the box office alone.

In the original time and space, "The Flowers of War" and "Flying Swords of Dragon Gate" fought even more fiercely. I think the mutual slander and sabotage between the two films caused each other to lose a lot of box office revenue.

While everyone was excitedly discussing the box office results of "The Flowers of War" and "Flying Swords of Dragon Gate", Golden Harvest finally announced its 2011 annual financial report.

Revenue of 68 billion and profit of billion!
As soon as the news came out, the share price of Golden Harvest, which had already been stimulated by "The Flowers of War" and "Flying Swords of Dragon Gate", suddenly soared.

In just one day, on January 2012, , the market value of Golden Harvest Group officially exceeded billion yuan.

It has become the first film and television company with a market value of over 100 billion yuan, and is not inferior even when compared with some well-known domestic companies.

The historic achievement of Golden Harvest Group has had an impact beyond the film and television industry.

The financial circle, investment circle and even the Internet circle were also shaken.

In particular, the host of the "News Broadcast" at 7 o'clock that evening also read out this news, which caused quite a stir online and among the public.

It is hard for anyone to imagine that a film-making company can be worth so much money.

There are many people who have this idea, including some well-known entrepreneurs. However, people who have this idea obviously don’t understand the film and television industry at all.

At the same time, except for a few people who feel a little jealous, most people in the circle are still proud of it.

In the past, due to some ancient occupational divisions, practitioners in the film and television industry were still looked down upon.

Often when something happens in other circles that has a lot of negative impact, in order to cover it up they always pull in the big gossip from the entertainment industry.

This situation continued until Liu Zhou was reborn and there was no change.

Moreover, compared with other domestic industries, the output value of the film and television industry was indeed far less.

Now the total value of the domestic film and television industry has continued to soar for several consecutive years, and there is now a super company with a market value of over 100 billion yuan.

From now on, they also have their own flag and will not allow others to slander their profession at will.

Of course, this is only for those practitioners with ethics. Those artists or other practitioners who have no ethics and ruin their own future deserve to be exposed.

After being shocked, everyone began to carefully study Golden Harvest’s financial report.

The revenue of 68 billion is almost ten times that of Huayi.

This is mainly composed of five parts: one is the movie box office, which was the biggest part at that time, one is TV series, one is variety shows, one is distribution, and the other is theaters.

Although this year's film performance is not as good as last year, it is not much. After all, there are two billion-level movies and one 800 million-level movie.

The reason why it is inferior is mainly because Golden Harvest missed the Spring Festival period this year, and the Double Eleven period "Ex-Files" was also much inferior to "Love Is Not Blind".

The TV series also achieved great success. The ratings of "Empress Wu Zetian" starring Fan Xiaopang as the heroine were once again a huge hit.

Its influence may not be as great as last year's "The Legend of Zhen Huan", but the profits it generated are higher than "The Legend of Zhen Huan".

After all, "Empress Wu Zetian" was built on the scale of a drama king from the beginning of the project.

In addition, the copyright fees for TV dramas and network copyrights have continued to rise over the past year, so the profit of "Empress Wu Zetian" is nearly 100 million more than that of "The Legend of Zhen Huan" a year ago, and is almost reaching 300 million yuan in profit.

In addition, there are several other popular TV series. In fact, Golden Harvest’s revenue from TV series is no less than that of Huace.

Perhaps if Golden Harvest Films were listed separately, its market value might not be lower than that of Huace.

Then the variety show is of course "The Voice of China" Season 2.

With the foundation laid by the first season, the second season had even better ratings.

Thanks to their thorough preparation, Zhejiang Satellite TV and Golden Harvest Productions received a lot of advertising fees.

This year, Golden Harvest's productions will not only be limited to "The Voice of China", "Running Man" will also be on the agenda.

This is the first outdoor variety show in China, and the photographer has no experience, but Golden Harvest Production is also prepared to invest heavily and explore a production process.

However, Golden Harvest does not have to spend too much money. When they heard that Golden Harvest was going to launch a new variety show, many companies donated money to the program.

After all, "The Voice of China" is a great success, and if "Running Man" becomes as popular as the former, they will make a lot of money.

"Running Man" is currently selecting permanent guests, and many artists in the circle are interested.

(End of this chapter)