Huayu: Starting from joining the mainstream entertainment industry in 96

Chapter 390, Section 388: My 2001
The Spring Festival of 2002 passed quietly amidst the lingering effects of "Whether You're Rich or Poor, Go Home for the New Year" and the continued popularity of "Lost in Thailand".

This low-budget comedy, produced by Wang Sheng and directed by Wu Yiyi, demonstrated an amazing box office endurance thanks to its accurate social insights and down-to-earth emotional resonance. It ran from December 2001 until the end of February 2002, the end of the Spring Festival, and the final box office figures have not yet been calculated.

As of January 31, 2002, the total box office of "Lost in Thailand" after two months of release was 1 million yuan. Including the box office in February which was not counted, it was 1.9% certain that it would break 2 million yuan.

With a production cost of only six million, "Lost in Thailand" once again proved Sheng Ying Media's accurate grasp of market trends and maturity in developing genre films with its high return on investment.

……

Before the festive atmosphere of the Spring Festival had completely dissipated, on February 27, at the "Jackie Chan Happy Park" in Huairou, a suburb of Beijing, with Wang Sheng's steady "Wrap-up," the Chinese fantasy epic "Night at the Museum," which had been filmed for nearly three months, finally announced the completion of all pre-production filming.

The entire studio erupted in enthusiastic applause and cheers. The staff hugged each other, their tired faces beaming with a sense of accomplishment.

Although Jackie Chan had packed his bags overnight and was preparing to head to the United States to film "Shanghai Noon 2", he could not hide his excitement at this moment.

He hugged Wang Sheng tightly, his voice booming, "Director Wang, this collaboration was fantastic! This film is sure to be a success! I'm looking forward to seeing it 'wonderful' all over the world!"

At the brief wrap party that followed, Jackie Chan took the opportunity of toasting to approach Wang Sheng again, lowered his voice, and spoke in a more formal and enthusiastic tone than before on set: "Mr. Wang, we're on the same side, so I won't beat around the bush."

If there is any need for Jackie Chan to endorse or recommend reliable international capital for Shengying's IPO, I will do my duty without hesitation.

I sincerely hope to participate more deeply and share in this grand event.

His eyes were gleaming; he was clearly not content with just the collaboration on "Night at the Museum," but rather eager to board the capital behemoth that was about to set sail, Shengying Media.

Wang Sheng remained composed, clinked glasses with him, and smiled, saying, "I understand Mr. Cheng's intentions. Once the film's post-production is nearly complete, let's sit down and have a proper chat."

He gently deflected the specifics again, but his attitude was more conciliatory than before, leaving room for cooperation.

……

The next day, Jackie Chan hurriedly flew to the United States, while Wang Sheng did not rest at all and immediately turned all his energy to the group's listing plan, which had already been put on the agenda.

As March arrives, the chill of early spring still lingers in Beijing, but the capital market's enthusiasm for Shengying Media is already in full swing.

The successful completion of filming for "Night at the Museum" and the impressive box office finish of "Lost in Thailand" exceeding 200 million yuan are like two bombshells, further reinforcing the market's perception of Shengying Media's strong ability to "make money and continue to make money."

Under Wang Sheng's personal supervision and management, the group restructuring of Shengying Media has been basically completed.

A preliminary framework for "Shengying Media Group"—characterized by a clear structure, a prominent core business, and high-quality assets—has been established.
The core listed entity is Shengying Media Group Co., Ltd. (formerly a limited liability company that underwent shareholding reform).

Shareholding structure (before listing): Wang Sheng (77%, absolute control), China Film Group (20%), Chen Liang (3%).

Wholly owned/controlled core business segments: film production, film distribution, Shengshi Cinema Management Co., Ltd. (operating "China Film Shengshi Cinema Line"), film city investment and operation (Chuang Guandong Film City, Jackie Chan Happy Park), television and film business, wedding video recording and related businesses, and Shengying Labor Service Company.

Strategic holding/participation related sectors: Enlight Media (Shengying holds 45% of the shares, focusing on TV content and artist management), Shengying-Beijing Film Digital Effects Co., Ltd. (Shengying holds 80% of the shares, focusing on future technologies).

This structure ensures the purity of the listed entity and a clear demonstration of its profitability, while also closely linking the highly promising television business and technology sector through equity ties, creating a strong synergy and unlimited potential.

Even more shockingly, as the audit and due diligence deepened, Shengying Media's revenue exceeded one billion RMB for two consecutive years in 2000 and 2001.

This figure was astronomical in China's cultural and media industry at the beginning of 2002, enough to drive any capital giant eyeing the Chinese market crazy.

This series of impressive data makes Shengying Media's listing no longer a question of "whether it is possible," but rather a question of "what scale and what valuation it will enter the capital market."

Wang Sheng's office in the Jingxin Building became an even busier command center than the Huairou film set.

He needs to deal with three fronts simultaneously—

The first front: battling with the ever-watchful giants of capital. International investment banks, represented by Goldman Sachs and Morgan Stanley, leveraged their global networks and underwriting capabilities to propose highly attractive overseas listing plans with aggressive valuations, attempting to package Sheng Ying as the "Chinese Disney" and promote it globally.

Domestic securities firms, led by China International Capital Corporation (CICC), strongly advocate for A-share listings, emphasizing that they align with the national strategy of "strengthening and expanding the domestic capital market" and can gain greater recognition from domestic investors, although initial valuations may be relatively conservative.

Wang Sheng was fully aware of this.

He convened his core finance and legal team and clarified the strategic bottom line: "The A-share main board is our first choice. This is our foundation and best reflects the value of Shengying as 'China's first listed film company'."

He paused, his gaze sweeping over everyone, "But at the negotiating table, we can't only have one path."

We should make full use of the enthusiasm of overseas investment banks and get them to offer the best terms in terms of underwriting fees, international placements, and support for future overseas mergers and acquisitions.

The final solution must ensure that my control remains completely unaffected, while simultaneously reserving sufficient and influential seats for state capital.

At the negotiating table, heated debates ensued, with the two sides locked in a tug-of-war over details such as valuation, issuance ratio, fundraising scale, and the greenshoe option.

Although Wang Sheng does not directly participate in every negotiation, he personally controls the decisions and bottom lines at key junctures.

He knew that every concession he made at this moment was crucial to the speed of the empire's future expansion.

The second front: communicating with the official departments that control the steering wheel.

Going public is not only a market behavior, but also a political and economic one, especially for Shengying Media, which is in an ideologically sensitive industry.

Under Han Sanping's introduction, Wang Sheng frequently visited relevant ministries and commissions such as the State Administration of Radio, Film and Television, the Publicity Department, and the China Securities Regulatory Commission, engaging in "conversations" that were more subtle and crucial than capital negotiations.

On these occasions, Wang Sheng demonstrated the image of a young entrepreneur who has a deep understanding of national policies and is courageous in taking on cultural responsibilities, and his student status also played a significant role at these moments.

He reported more than just cold, hard revenue figures and expansion plans to his superiors:
"Distinguished leaders, the primary purpose of the funds raised by Shengying's IPO is to invest in producing more commercial blockbusters like 'Night at the Museum,' which can carry forward China's excellent traditional culture and be accepted by audiences around the world. This is the most effective way to promote culture abroad."

"We will invest heavily in improving the national cinema network, especially in the central and western regions and second-tier cities, so that more people can enjoy a modern movie-watching experience right at their doorstep. This also meets the growing spiritual and cultural needs of the people."

"Investing in special effects companies is to make up for the shortcomings of China's film industry. This is a strategic move, and we will persist even if it is not profitable in the short term."

He repeatedly emphasized: "Shengying Media has grown up under the guidance of the Party's policies. At all times, we will adhere to the correct direction, put social benefits first, and achieve a unity of social and economic benefits."

These statements and clear strategic plans effectively dispelled the concerns of some officials that cultural enterprises might get out of control after being capitalized.

The official support is becoming increasingly clear, and the green light is being given one by one.

The China Securities Regulatory Commission (CSRC) also hinted that as long as the materials are compliant and the performance is genuine, the review process will be handled "specially" and efficiently for companies that serve as benchmarks for cultural industry reform.

The third front: internal integration and roadshow preparation.

At Wang Sheng's urging, Shengying Media Group conducted a thorough financial review and business restructuring to meet the stringent standards for A-share listing.

Meanwhile, a lean and efficient listing task force and a future roadshow team were formed and underwent intensive training to ensure that Shengying's story could be told to investors clearly and confidently.

At this time, the market was full of imagination regarding the valuation of Shengying Media Group.

Based on a comprehensive assessment of its profitability, market share, brand value, and future growth potential (especially its forward-looking plans such as "Jackie Chan Happy Park" and special effects technology), its valuation in the last round of private equity financing before listing was conservatively estimated to be between 50 billion and 60 billion RMB.

Once successfully listed, with the concept of "China's first film stock" and huge market potential, a market value exceeding 10 billion yuan is not out of reach.

To be honest, Wang Sheng personally thinks this valuation is a bit low.

(End of this chapter)