Shanghai Film Sell 4 Cinema Assets: Continued Layout and Internal Elimination

Shanghai film insiders told reporters, "it's not that we don't work in this industry, we build a lot more cinemas than we close down."

November 15, the property rights transfer project announced by the Shanghai United property Exchange showed that Shanghai Film Co., Ltd. (hereinafter referred to as "Shanghai Film") listed the transfer of 100% equity and 15.4047 million yuan of debt of Dalian Shanghai Film City Co., Ltd. In September and October this year, Shanghai Film announced plans to transfer 100% of its wholly-owned subsidiaries Changsha Shangying Film Management Company, Liaoning New Matt Yongle Film City, and Chongqing Cross-Boundary Film Co., Ltd. (hereinafter referred to as "Cross-Border Film") about 17%.

"now the single-screen output of cinemas across the country is declining, and not all of the projects we have at hand are at ease. For the sake of asset optimization, we sell those with severe losses, which not only increase the net profit of listed companies, but also use the money back to invest in better targets. " Shanghai film insiders told reporters, "it's not that we don't work in this industry anymore. We build a lot more cinemas than we close down."

strong > both new and old cinemas have their own "difficult classics" / strong >

located in the centennial port of OUTLETS, Xiangerfang, Xigang District, Dalian City, Liaoning Province. judging from the situation of the ticketing software Guevara, it is a large and new cinema. The scale of 8 cinemas and the configuration of IMAX hall are good hardware in the whole country.

according to the Shanghai Stock Exchange, the studio lost 3.98 million yuan in 2016 and 620000 yuan in 2015, and the situation in 2017 is still not satisfactory. According to the evaluation institution, the total assets of the studio are 21.24 million yuan and the total liabilities are 23.12 million yuan.

"the popularity of the studio depends to a large extent on the popularity of the business community." A senior cinema practitioner analyzed to every film and television reporter, "like Dalian Centennial Port OUTLETS, located in Xingang District, the training period is relatively long, now the overall popularity of OUTLETS Mall has not yet risen, the studio in it will not be very good."

Dalian Shanghai Film City's listing price is 21.9 million yuan, including 15.4047 million yuan of creditor's rights and 6.5 million yuan of equity. "if the project is completed by competitive transfer, the premium shall be equity premium."

looking up the Shanghai Film announcement, we can see that the "creditor" of 15.4 million yuan of debt is Shanghai Film, which is actually the construction money of the studio. This package means that Shanghai Film can not only stop the loss but also recoup all the previous investment in the cinema.

the situation of another proposed Changsha film management company is similar to that of Dalian Shanghai Film City. It has lost money for three years in a row, and the total transfer price consists of 10.3631 million yuan of creditor's rights and 6.8 million yuan of equity. The depression of the studio is also related to the low popularity of the mall.

by contrast, Liaoning New Matt Yongle Cinema in Shenyang is an "old store" that has been open for more than a decade. The studio is located in the downtown business district, has six cinemas, and was fully renovated and upgraded last year. It hasn't made much money in the past three years. Moreover, the lease period of cinema land rent is coming soon, and the follow-up operation is facing uncertainty.

"this time, the equity transfer of two cinema companies under the company is the company's plan to 'dynamically optimize and adjust the cinema assets'. The sale of projects with poor operating efficiency and weak return on investment will reduce losses and increase investment income at the same time. Have a positive impact on the company's operating results. The proceeds from the sale will be used to invest in new cinema projects with better returns. " According to the Shanghai Film announcement.

strong > while continuing the layout, / strong >

in addition, Shanghai Film will also transfer about 17.3% of the shares in Cross-Border Pictures. After the transfer, Shanghai Film still holds about 12.6% of the shares in Cross-Border Pictures.

Cross-Border Pictures, founded in 2011, landed on the new third board in April last year, and Shanghai Film took a stake in the company in 2015. Cross-border Pictures semi-annual report shows that the company has opened 16 cinemas and 148 screens, ranking fourth at the box office in Chongqing. However, due to the addition of five new cinemas in a short period of time, the cost of new cinemas has increased significantly, resulting in a decline in gross profit margin in the first half of 2017. "the rapid development of cinema construction is bound to bring greater pressure on the company's overall business performance."

17.3% of the transfer of Shanghai Film Cross-border Film is also a dynamic optimization adjustment plan, which will bring a net profit of 4,000 to 45 million yuan for Shagou Lake Film after the transfer, and the proceeds from the sale will be used to supplement liquidity.

in fact, cinema companies across the country are having a hard time. On the one hand, affected by rent, manpower, equipment upgrading and other factors, cinema operating costs are generally rising. On the other hand, the attendance of the audience remains low. Especially last year, the box office growth rate of films across the country shrank sharply, and the box office output of both single cinemas and single screens dropped sharply. "on average, the box office of each film shown in the cinema has dropped to about 600 yuan." The above senior cinema practitioners said.

although the slowdown in box office growth across the country last year has sent a calm signal to the market, cinema construction has inertia and cannot put on the brakes. In recent years, the number of cinemas has maintained a growth rate of nearly 1000 a year, and the regional competition has become more fierce. In many cities, there has even been a phenomenon of hand-to-hand hand-to-hand combat in many cinemas in just a few hundred meters of streets.

"so while those cinema companies that already have economies of scale continue to layout, they also have to examine their assets to survive the fittest. And even if it is a new cinema, the scientific and professional location of the cinema is even more important. The cinema has gone through the stage of making money when it is built. " The above senior cinema practitioners believe that.

Edit: yvonne