Huayu: Starting from joining the mainstream entertainment industry in 96

Chapter 389, Section 387: Grouping
In January 2002, the chill in Beijing had not yet subsided.

Inside the "Jackie Chan Happy Park" filming studio in Huairou, filming for "Night at the Museum" is still proceeding smoothly.

Wang Sheng acted as a pillar of strength, controlling the rhythm of this massive production crew.

Every shot was meticulously crafted, and every special effect was seamlessly integrated, all under his exacting standards.

Jackie Chan's dedication and professionalism made the collaboration exceptionally smooth, and the film's magical realism gradually took shape.

However, Wang Sheng's mind was not entirely on the film set.

Every day after work, he would spend a lot of time in his office at Jingxin Building discussing with his core team the most important matter concerning the future—the group restructuring and listing of Shengying Media.

On the huge whiteboard, a preliminary blueprint for the group's organizational structure was outlined.

This is not based on mere imagination, but rather on a comprehensive consideration of the existing business structure, future strategy, and how to respond to scrutiny from the capital market.

[Proposed Core Architecture Plan for Shengying Media Group]

1. Listed entity: Shengying Media Co., Ltd. (formed through the shareholding reform of the former Shengying Media Co., Ltd.)

Shareholding structure (pre-IPO):
Wang Sheng: 77% (Absolute controlling shareholder, actual controller)
China Film Group Corporation: 20% (A major strategic shareholder, representing state-owned capital, providing policy endorsement and resource support)

Chen Liang: 3% (Equity incentive for founding team members and early contributors)
Core business segments (wholly-owned or holding subsidiaries):

Film production business: Continuing the core advantages that Shengying Media started with, it is responsible for the development, investment and production of film projects.

It covers mainstream commercial films, genre films, and some art films with market potential.

Film distribution: Integrating existing film distribution resources, responsible for the domestic distribution of films produced by Shengying, and gradually expanding overseas distribution business (relying on cooperation with international companies such as New Line Cinema). Forming a close "production and distribution" linkage with "China Film Shengshi Cinema Circuit".

Cinema Investment and Management: The core asset is "China Film Shengshi Cinema Circuit". However, for the sake of clarifying asset relationships and facilitating management, it is proposed to delegate the actual operation and management rights of the cinemas to the wholly-owned subsidiary "Shengshi Cinema Management Co., Ltd".

The listed entity gains control of the cinema business by holding a controlling stake in the company.

Film and television city investment and operation: Integrating "Chuang Guandong Film and Television City" and "Jackie Chan Happy Park" which is under construction. This part of the assets is relatively heavy, but it represents the future direction of "film and television IP + immersive cultural tourism", and has huge asset appreciation and derivative value. Including it in the listed entity can increase the asset size and room for imagination.

Television film business: Continuing the cooperation model with film studio alliances, producing television films and supplying them to television stations, it is a stable and profitable cash cow business.

Wedding videography and related businesses: Although the proportion of the business has decreased since the company started, the brand value and high-net-worth client resources are still there. It can be retained as a distinctive business, and cross-border cooperation with wedding, fashion and other fields can be explored.

Shengying Labor Service Company: Responsible for the brokerage, dispatch and management of crew members, serving as the human resource support for the industry chain, and is included as a subsidiary.

Related business segments (not wholly owned, but strategically controlled or significantly invested in by the listed entity):
Enlight Media: Focuses on television content production (variety shows, drama series) and long-running television dramas (such as "The Four Great Constables," while "Lurking" and "Crossing the Guandong" are not included), as well as artist management (some artist contracts are listed here).

Its shareholding structure remains independent:
Shengying Media holds a 45% stake (the largest shareholder and a strategic controlling shareholder).

China Film Group holds a 20% stake.
Hunan Provincial Radio and Television Station (through its subsidiary industrial operation company) holds a 20% stake (an important channel and content output partner).

Wang Changtian (representative of management) holds 3% of the shares.
Tsai Yi-Nong (core producer) holds a 2% stake.
Equity incentive pool (10%, held on behalf of Wang Sheng)

This move aims to separate the television business from the film business to avoid an overly complex listing entity. At the same time, Enlight Media itself has the potential for independent financing and development, and is Wang Sheng's "second cake" to incentivize and bind core talents and other partners in the television content field.

Shengying-Beijing Film Academy Digital Special Effects Co., Ltd.: A joint venture established with the Beijing Film Academy, focusing on the research and application of cutting-edge technologies such as film special effects and digital intermediates. Shengying Media holds an absolute controlling stake (80%), while Beijing Film Academy contributes its technology and talent. This is a future-oriented technology strategy; although it may incur losses in the short term, its strategic significance is immense.

The core idea of ​​this group-oriented plan is to take Shengying Media as the flagship, integrate the core high-quality assets of the entire film industry chain, and create a listed entity with a prominent main business, clear assets, strong profitability, and high growth potential.

At the same time, by holding controlling stakes or making significant equity investments, related businesses such as television content and special effects technology are placed within a unified strategic framework, creating synergies while maintaining flexibility in their respective development.

……

While Wang Sheng's team was working diligently to perfect the plan.

Discussions about Shengying Media's IPO were also quietly taking place within relevant ministries and institutions such as the State Administration of Radio, Film and Television, the Publicity Department, the Ministry of Culture, and China Film Group. In early 2002, China was experiencing a mix of excitement and trepidation regarding its WTO accession.

The promise of opening up the cultural industry is still fresh in our minds. How to strengthen ourselves before the "wolf is coming" is a question that the top leadership must consider.

The emergence of Shengying Media and its proposed listing were timely, serving as an excellent "pilot project" and "observation sample".

At an internal coordination meeting led by the State Administration of Radio, Film and Television, and attended by relevant officials from the Publicity Department and the Ministry of Culture, as well as Yang Buting and Han Sanping from China Film Group, the topic was Shengying Media.

"The development of Wang Sheng's Shengying Media in recent years is evident to all."

The State Administration of Radio and Television leader, who chaired the meeting, set the tone at the outset: "From wedding videography to now, we've expanded into production, distribution, cinemas, and even started venturing into film and television tourism and high-tech special effects, forging a new path of marketization and industrialization. Now they've proposed going public to raise funds and grow bigger and stronger, and I believe that, in principle, we should support them."

The representative from the propaganda department was more cautious: "Support is acceptable, but the bottom line must be clearly defined. Cultural products have ideological attributes and cannot be completely equated with ordinary commodities."

As a future listed company, Shengying Media must ensure that its content production is guided correctly and meets the requirements of building socialist spiritual civilization.

Regarding the equity structure, it is essential to ensure the leading role of the founding team and state-owned capital to prevent malicious infiltration by unscrupulous capital or foreign investment.

An official from the Ministry of Culture added from an industry perspective: "After joining the WTO, we face competition from international cultural capital."

Supporting dynamic and capable local private cultural enterprises like Shengying is of great significance for improving the industrial system, boosting the cultural market, and responding to international competition.

Its listing can explore a new path for the integration of the cultural industry and the capital market, and has a demonstrative effect.

Yang Buting, Chairman of China Film Group, delivered a speech, providing official endorsement: "As a strategic shareholder of Sheng Ying, China Film Group has always been optimistic about its development."

Going public will help Shengying establish a more standardized modern corporate system, and the funds raised will be used for the development of high-quality projects and the improvement of the industry chain, which will drive the upgrading of the entire film industry.

We support its listing and are willing to provide necessary assistance during the process.

The more successful Shengying Media becomes, the more outstanding its performance will be, and since the direction is the same, it will definitely be supported.

Han Sanping's position is closer to Wang Sheng's. He added a key point: "Shengying's listing is not just a corporate act, but can also be seen as a sign of the deepening reform of our film industry."

This proves that our market-oriented reforms are on the right track and can cultivate competitive market players. As for the listing location and scale, these require careful consideration.

Discussions about the listing location were one of the focal points of the meeting.

Domestic A-shares (Shanghai Stock Exchange or Shenzhen Stock Exchange):

Advantages: Closer to the local market, investors have a better understanding of the company's business; valuation may be more in line with the characteristics of domestic growth companies; strong policy guidance, in line with the direction of "making the domestic capital market bigger and stronger".

Disadvantages: In 2002, the domestic A-share market had low awareness of cultural and media companies, the review process was relatively strict and uncertain, and refinancing was not as convenient as in overseas markets.

Overseas (Hong Kong Stock Exchange or Nasdaq):

Advantages: The listing process is relatively transparent and efficient; there is ample international capital, which facilitates future overseas expansion and mergers and acquisitions; it helps to enhance the company's international reputation.

Disadvantages: Facing stricter international market regulations and disclosure requirements; valuation may be affected by international investors' preference for "China concept"; cultural differences may lead to the company's value being underestimated.

Ultimately, the meeting's prevailing opinion was to encourage and support Shengying Media to prioritize a domestic A-share listing.

This is both for the sake of cultural security and the cultivation of the local capital market, and it is also more in line with the brand positioning of "China's first listed film company".

However, regarding the specific listing standards and scale, Shengying needs to provide more detailed financial data and fundraising project plans.

The message was subtly conveyed to Wang Sheng through Han Sanping.

(End of this chapter)