On the Evolution of Contemporary Oriental Media Industry: the Strategic complementarity of merger and acquisition of Yongle Film and Television

on August 22nd, Contemporary Oriental, the "media ecological leader", announced that it planned to issue shares to buy 100 per cent of Yongle Film and Television at a price of no more than 2.55 billion. In this restructuring and merger, the target company Yongle Film and Television has promised that the net profit will not be less than 215 million in 2017, 295 million in 2018, 365 million in 2019 and 420 million in 2020.

after the completion of this acquisition, listed companies will have two trump cards of League General Power and Yongle Film and Television. In addition, Yaoshi Xinghui, contemporary Lu Jiu, Baiying Pictures, Contemporary Interactive and other molecular companies carry out business around content, channels, big data, etc., and each section will integrate resources to form a comprehensive blooming content product line, such as movies, TV dramas, online dramas, variety shows, concerts and so on.

Contemporary Oriental Chairman Wang Chunfeng said, "all businesses can achieve full sharing and close coordination of core resources such as scripts, directors, actors, and so on, and our competitive strength on the content side can be further strengthened." and then play a chain effect to achieve the evolution of the media industry.

strong > M & A Transformation / strong >

strong > partner Plan: cultivate Media Ecological leaders / strong >

according to the 2016 annual report of Contemporary Oriental, operating income reached 986 million yuan last year, an increase of 99.01% over the same period last year; net profit belonging to shareholders was 177 million yuan, an increase of 60.25% over the same period last year. No matter in terms of revenue or net profit, the growth rate is among the best among the listed film and television media companies.

judging only from the achievements of the TV series business in the first half of this year, the contemporary East can be said to have a good reputation and a bumper harvest.

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The play won the best online TV series in the 2017 Jinguo online film and television ceremony, and Wu Xiubo directly won the best actor in the online drama of the year, becoming a well-deserved king of popularity.

the top and bottom of the ancient costume suspense reasoning drama "Hot Blood Chang'an" beat the crowd in the online drama world with the potential of a dark horse, becoming a masterpiece at the beginning of the year on the Internet, and finally ended with a score of more than 10 billion, and won the best picture award at the second Asian New Media Film Festival.

the producer of these two dramas, General Wei Film and Television, is the wholly-owned subsidiary of Contemporary Oriental that invested 1.1 billion yuan in 2015, and this merger also announces its formal transformation of the film and television media industry. After tasting the benefits, it is proposed to acquire 100% stake in Yongle Film and Television at a price of no more than 2.55 billion, which is an important measure for the contemporary East to practice the strategy of "content, channel, derivative".

at present, the contemporary East has begun to take shape in TV dramas, movies, variety shows, music performances, cinemas and other sections. Yao Shi Xinghui, contemporary Lu Jiu, Baiying Pictures, contemporary interaction, contemporary Asia and America, contemporary cinema and other molecular companies have developed rapidly with different business categories and business models. thanks to the path to realize the innovative value of the "partnership plan" pushed by director Wang Chunfeng, the left hand achieves the evolution of industrial scale through mergers and acquisitions, while the right hand uses the partner concept to cultivate the next "media ecological leader".

strong > Yongle Film and Television Strategic complementary profits can be expected / strong >

strong > Contemporary Oriental creates media industry value / strong >

Cheng Lidong founded Yongle Film and Television is a professional film and television organization integrating planning, investment, shooting, production and distribution, focusing on the production and distribution of TV dramas. The content of Yongle film and television production is mainly based on the main theme and red theme. This will supplement the shortcomings of contemporary Oriental in this type of film and television works, and will further strengthen the integration and linkage of content, channels and big data in its media industry ecology, and innovate the value of the media industry.

his major TV dramas that have been invested and distributed include "God of War", "Romance of the Sui and Tang dynasties", "Zhao Zilong", "Jiao Yulu", "Blood-stained Daqingshan", "people's Prosecutor", "he Suo is warm in winter", "he Suo Xia Liang", "Secretary of the discipline Inspection Commission", "people's soldiers" and so on. For contemporary Oriental, diversified creation of content style, as a veteran film and television enterprise in the industry, Yongle Film and Television has strong sustainable profitability, outstanding production level and cost control ability, and can continue to produce the content source of good works to support the content end.

in the contemporary oriental media industry ecology, it is easier to realize the integration of creation, marketing, distribution and other resources; at the same time, Yongle Film and Television can also make use of the financing channels of listed companies to expand financing channels and enhance the development capacity of its main business. Some analysts believe that the real intention of this merger and reorganization is the "strategic complementarity" between listed companies and Yongle Film and Television in terms of resources and funds. Yongle Film and Television also gives the answer to the questions that investors are concerned about, such as the completion plan of Yongle Film and Television performance and the realization of growth expectations. The "Secretary of the discipline Inspection Commission" was shortlisted to welcome the victory of the 19th CPC National Congress and held a reference repertoire; "people's disciple soldiers" was shortlisted to celebrate the 90th anniversary of the founding of the army; and the recommendation of the State Administration of Press, publication, Radio, Film and Television, this has laid a good foundation for the distribution and broadcasting of the Secretary of the discipline Inspection Commission and the people's soldiers. The urban emotional drama "where is warm in winter and cool in summer" will also be broadcast on Oriental Satellite TV. The three dramas will contribute 180 million yuan to the gross profit of Yongle Film and Television.

in addition, Yongle Film and Television has also planned nearly 20 film and television production plans, including "who allows Love to be flashy", "our Workers have Power", "King Gesar", "Women's Marine Corps" and so on. These do not include projects of acting distribution and acting as non-executive producers, and lay the foundation for the realization of subsequent profit commitments.

Edit: xiongwei