Happy purchase 11.5 billion acquisition of five companies Hunan Radio and Television this asset injection can be successful?

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The content of the announcement shows that Happy purchase plans to buy all shares in five enterprises, including Happy Sunshine, Mango Mutual Entertainment, Tian Yu Media, Mango Film and Television, Mango Entertainment, etc., from its controller, Hunan Radio and Television. On June 4, Happy Shopping announced that it planned to acquire five companies, including Mango Mutual Entertainment, owned by Hunan Radio and Television, and disclosed its first transaction plan on September 28.

on the evening of November 20th, Happy Buy's proposed acquisition at a price of 11.55 billion yuan was disclosed again. Also disclosed was the resumption of trading on November 21.

based on the four-year average net profit, the price-to-earnings ratio of the subject matter is 11.5 times, 10.6 times, 11.8 times, 11.8 times and 7.8 times, respectively.

on the evening of November 20th, Happy Purchasing's proposed purchase price of 11.55 billion yuan was disclosed again. Also disclosed was the resumption of trading on November 21.

Happy Buy has been suspended from planning major events since the beginning of April this year. On June 4, Happy Shopping announced that it planned to acquire five companies, including Mango Mutual Entertainment, owned by Hunan Radio and Television, and disclosed its first transaction plan on September 28. The content of the announcement shows that Happy purchase plans to buy all shares in five enterprises, including Happy Sunshine, Mango Mutual Entertainment, Tian Yu Media, Mango Film and Television, Mango Entertainment, etc., from its controller, Hunan Radio and Television.

in this transaction, the price of shares issued by Happy purchase is 19.66 yuan per share, and the number of shares issued is about 588 million shares. The trading prices of Happy Sunshine, Mango Mutual Entertainment, Tianyu Media, Mango Film and Television and Mango Entertainment are 9.53 billion yuan and 5.08 yuan respectively. Billion yuan, 503 million yuan, 540 million yuan and 468 million yuan, with a total transaction value of about 11.55 billion yuan. After the completion of the transaction, the controlling shareholder of Happy purchase is still Mango Media, and the actual controller is still Hunan TV.

in this acquisition, all five acquisition targets have made a four-year performance commitment from 2017 to 2020. Among them, Happy Sunshine said that the net profit in four years will reach 427 million yuan, 679 million yuan, 910 million yuan and 1.293 billion yuan respectively. The combined four-year net profits of the five companies reached 633 million yuan, 875 million yuan, 1.094 billion yuan and 1.498 billion yuan respectively. Based on the four-year average net profit, the price-to-earnings ratio of the acquisition target is 11.5 times, 10.6 times, 11.8 times, 11.8 times and 7.8 times, respectively.

Happy Shopping claims that the combined net profits of the five deals in 2015 and 2016 are all negative, mainly because Happy Sunshine, one of the targets, is still in its infancy, and its revenue does not cover the costs of content, technology, and so on. The loss is large, offsetting the profits of the rest of the underlying companies. But Happy Sunshine has turned losses into profits in the first half of 2017. In addition, the acquisition of the above five assets will also benefit listed companies from many financial indicators, such as net profit, gross profit margin, net profit margin and so on.

the announcement said that Happy Sunshine is the only operator of the new media video platform under Hunan Taiwan, and its main business includes Internet video business, operator business, content operation business and other businesses. From 2015 to the first half of 2017, Happy Sunshine's income reached 961 million yuan, 1.766 billion yuan and 1.375 billion yuan respectively. Internet video operation, including the computer side, mobile app side of the mango TV and other products are happy sunshine operation products. Content operation, including investment and production of film and TV dramas and variety shows. "2016 Super Girl", "where is Dad going" series, "Star Detective" series, "Transformers" series and so on are happy sunshine self-made content.

in fact, this is the second time that these five companies have hit the stock market. As early as August 2016, Happy Buy announced that it planned to acquire all or part of the controlling stakes in seven companies controlled by Hunan Radio and Television-- in addition to the above five companies, including Hunan Golden Eagle Cartoon Co., Ltd. And Hunan Tianyu Advertising Co., Ltd., all belong to the high-quality assets of Hunan Radio and Television. But just two months later, the acquisition plan fell through. This time the impact listing compared with last year's seven companies packaged injection, less Golden Eagle cartoon and Tian Yu advertising two companies. Looking back on the last failure may have something to do with the awkward situation of the media industry and the tightening of M & A policies. Coupled with the fact that the main target of the acquisition was not profitable in 2016, it also increased the uncertainty of the acquisition at that time.

Market participants said that Hunan Radio and Television once again injected high-quality assets into Happy purchase, which is an affirmation of its assets. From the perspective of performance commitment, Hunan Radio and Television is also full of confidence in the future of the acquisition target. However, as the merger and acquisition plan of Happy Buy still needs multiple approvals, the outcome is still uncertain.

on November 21, Happy Buy opened with a daily limit of 22.28 yuan per share.

Edit: mary