The valuation of the assets to be purchased falls and the restructuring plan of Great Wall Film and Television "shrinks" again.

after a series of adjustments, recently, the latest restructuring plan for Great Wall Film and Television has been officially announced. However, compared with the previous restructuring plan, the latest plan of Great Wall Film and Television has once again "shrunk".

original title: the restructuring plan of Great Wall Film and Television has shrunk again

Great Wall Film and Television has been planning asset restructuring since June last year, and the progress of the restructuring of the company has been attracting much attention. After more than a year of planning, the restructuring process of Great Wall Film and Television is very tortuous. After a series of adjustments, the latest restructuring plan for Great Wall Film and Television has been officially announced. However, compared with the previous restructuring plan, the latest plan of Great Wall Film and Television has once again "shrunk".

< strong > restructuring plan reappears "shrinking" < / strong >

November 4, according to the latest restructuring plan announced by Great Wall Film and Television, the company plans to buy 87.5% of the premiere shares held by six natural shareholders, including willing Media, Han Wei and Gu Changwei, by issuing shares and paying cash, with a transaction price tentatively set at about 1.059 billion yuan. At the same time, Great Wall Film and Television plans to issue shares to no more than 10 specific targets by way of inquiry to raise no more than 240 million yuan.

however, the company's latest restructuring plan is "smaller" than it was a year ago. Looking back at the historical announcement of Great Wall Pictures, the progress of Great Wall Pictures, which was suspended from trading in the afternoon of June 15, 2016 due to planning a major acquisition, has been closely watched by the market since the company disclosed the announcement. After nearly half a year of planning, the restructuring plan of Great Wall Film and Television on December 14 last year was finally unveiled.

according to the previous restructuring plan, Great Wall Pictures plans to buy 100% stake in Premiere Times held by seven natural shareholders, including willing Media, Han Wei and Gu Changwei, by issuing shares and paying cash. The transaction price is tentatively set at 1.35 billion yuan. The ambition of Great Wall Pictures is much more than that, and the company is also trying to acquire a 100% stake in Dana Pictures. Specifically, Great Wall Pictures purchased 100% stake in Dena Pictures held by 12 natural shareholders, including Bao Chunlei, Tong Liming, Sun Zhihua, by issuing shares and paying cash. The transaction price is tentatively set at 545 million yuan. While Great Wall Film and Television is planning the above-mentioned package deal, the company also plans to raise no more than 563 million yuan in supporting funds for non-public offerings by way of inquiry to no more than 10 specific investors.

after more than a year of planning, the restructuring plan of Great Wall Film and Television was formally accepted by the CSRC on July 6 this year. However, the process of pushing ahead with the restructuring plan has not been plain sailing. On September 20, Great Wall Film and Television plans to adjust the restructuring plan. On September 27, Great Wall Film and Television refocused the market's attention on an announcement about applying to the China Securities Regulatory Commission to withdraw the restructuring plan.

talking about the reasons for applying to the CSRC to withdraw the issuance of shares and pay cash to purchase assets and raise matching funds and related party transactions, Great Wall Film and Television admitted in the announcement that in view of the fact that the financial data related to this major asset restructuring are about to expire. The supplement and update of financial data and subsequent related work are not expected to be completed before November 1, 2017, as agreed in the "share purchase Agreement" signed with all shareholders of Dana Pictures. After friendly communication with Dana Pictures shareholders, it was decided to terminate the purchase of 100% stake in Dana Pictures.

after comparing the two restructuring plans disclosed before and after Great Wall Film and Television, it is not difficult to find that in addition to the "disappearance" of Dana Pictures from the list of assets to be acquired, the latest restructuring plan of Great Wall Film and Television has also "shrunk" again. The proportion of shares in the premiere era of the proposed acquisition has been reduced from 100% to 87.5%. According to the restructuring plan disclosed by Great Wall Pictures on December 14, 2016, the estimated value of the premiere time is about 1.356 billion yuan, an increase of about 1.31 billion yuan over the book value of owners' equity of about 42.0158 million yuan at the premiere time. The value-added rate is as high as 3126.49%. According to the restructuring plan released on November 4 this year, as of August 31, 2017, the estimated value of the premiere era was about 1.21 billion yuan, an increase of about 1.14 billion yuan over the book value of about 69.2268 million yuan at the premiere time, with a value-added rate of 1648.59 percent. According to this rough calculation, only 10 months later, the overall valuation of the premiere era has dropped by about 146 million yuan.

in fact, behind the decline in valuations during the premiere may be related to signs of pressure on the company's operating results this year. Premiere time was founded on October 26, 2010, the company is mainly engaged in film and television production and related derivative business, the main business includes film and television post-production services, artist brokerage services, film and television drama investment and production. Financial data show that during the premiere period, the unaudited operating income in 2015 was about 8.3549 million yuan respectively, and the corresponding net profit for the current period was about 3.6718 million yuan. Revenue and net profit in the 2016 premiere era showed a rising trend, with unaudited operating income of about 72.5026 million yuan and corresponding net profit of about 41.5851 million yuan in 2016, according to data.

another reason why the Great Wall premiere era attracted market attention is that celebrities such as Gu Changwei, Jiang Wenli and Ma Sichun appear on the list of the other parties. Although star participation in companies has become commonplace, the acquisition of an 87.5 per cent stake in the premiere era of Great Wall Movie has stirred up sensitive nerves among investors. Apart from the star aura of shareholders in the premiere era, the operating results of this year's premiere era seem to be slowing down. Data show that from January to August this year, the unaudited operating income during the premiere was about 35.4828 million yuan, and the corresponding net profit was about 17.6154 million yuan.

an investment banker who spoke on condition of anonymity said in an interview that the decline in the valuation of the underlying assets reflects a lack of optimism about the company's future profitability.

the slowdown in the growth rate of Great Wall Movie and Television has attracted attention behind the capital operation of Great Wall Film and Television, or it may be related to the slowdown in the company's performance growth so far this year.

the main business of Great Wall Film and Television is the investment, production, distribution, advertising business and film base operation of films and TV dramas. Great Wall Film and Television said that after completing the acquisition of 87.5% of the shares in the premiere era, the company's main business will expand into the big film industry on the basis of its existing business, including film and television production, post-film and audio production, and so on.

in addition to the acquisition of the premiere era, Great Wall has been in a "buy-and-buy" mode this year. For example, Great Wall Film and Television announced on Sept. 28 that the company plans to acquire 64.5% of the shares of Anhui Maren Qifeng Cultural Tourism Co., Ltd. (hereinafter referred to as "Ma Ren Qifeng") at a price of 167.7 million yuan. Maren Qifeng is mainly engaged in the tourism industry, relying on the unique natural resources of the Maren Qifeng Scenic spot and integrating the key elements of the tourism industry chain according to the characteristics of the scenic area.

Great Wall Film and Television also announced on August 2 this year that Dongyang Great Wall Film and Television Media Co., Ltd. (hereinafter referred to as "Dongyang Great Wall"), a wholly owned subsidiary of the company, intends to use self-raised funds not exceeding 171.1 million yuan to acquire a 24% stake in Shanghai Jiuming Advertising Co., Ltd. (hereinafter referred to as "Jiuming Advertising"). It is worth mentioning that after the completion of this acquisition, Dongyang Great Wall will hold a 100% stake in Jiuming Advertising. Jiuming Advertising profit model is mainly combined with customer needs, through the production of their own targeted advertising programs and outsourced TV program advertising time to sell to downstream customers for profit.

in the view of Song Qinghui, a famous economist, film and television companies began to seek diversified layout mainly to disperse the risks of the film and television business and to maximize profits at the same time. Under the background that it is the general trend for film and television companies to seek diversified development, the diversified layout of Great Wall Film and Television is conducive to ensuring the stability of film and television business. Song Qinghui said frankly that diversified development is a double-edged sword, opportunities and risks coexist, it may bring new opportunities to the company, but also may face new crises. Under the background of market competitors, the correct grasp of the market and the current situation has an important impact on the successful diversification of enterprises.

behind the frequent operation of Great Wall Film and Television, it has something to do with the slowdown in the company's performance since the beginning of this year. In the first quarter of this year, the revenue and net profit of Great Wall Film and Television declined both.

Edit: mary