Winning the new financial era

Chapter 376 Canxing Culture
In Shanghai, Zhang Yida visited CMC for the second time.

"Mr. Li, how do you think about Canxing Culture?" Zhang Yida looked at Li Ruigang with a smile.

"Mr. Zhang, we have negotiated internally and are willing to accept investment from Zhonghe Group."

Li Ruigang said again: "That's the valuation, there is a little increase.

In March last year, Zhefu Holdings acquired 3% of the shares of Canxing Culture at a price of 3 million yuan. The valuation at that time was 6.0698 billion yuan.

It has been almost a year since this financing.It is also normal for the valuation to increase. I hope Mr. Zhang understands. "

"That's no problem," Zhang Yida nodded. "It's normal for the valuation to rise with the increase in operating performance."

Zhang Yida's words are also very straightforward. If you want to increase the valuation, you need to talk about the actual operating performance.

"Okay, this is the financial report of Canxing Culture in recent years, Mr. Zhang, please read it."

Li Rui had just asked the secretary to hand Zhang Yida a stack of materials, and Zhang Yida took it and began to read it.

15年度营收24.6188亿元，净利润8.0647亿元；16年度营收27.06亿元，净利润7.2859亿元。

Revenue increased by 10%, but net profit fell by 10%, which is a bit strange.

Zhang Yida continued to read. In 2015 and 2016, the production income of "The Voice of China" and "Singing China" accounted for 46.43% and 37.33% of the total income respectively.

The total assets are 42.06 billion yuan, the total liabilities are 11.59 billion yuan, and the net assets on the account are 30.47 billion yuan.

The goodwill on the balance sheet is as high as 19.83 billion yuan, which means that two-thirds of the net assets of Canxing Culture are composed of goodwill.

The proportion of goodwill in the asset system is too high!

Zhang Yida couldn't help asking: "Why is the goodwill so high?"

"Oh, this!"

Li Ruigang said calmly, "The year before last, Canxing Culture acquired the music production company Mengxiang Qiangyin at a transaction price of 20.8 billion yuan.

At that time, Mengxiang Qiangyin’s book net assets were only 1.12 million yuan, so this ultra-high premium merger added 19.7 billion yuan of goodwill to the consolidated statements of Canxing Culture. "

Zhang Yida was quite surprised by Li Ruigang's frankness, as such premium acquisitions are usually concealed.

This one is good, I will explain it to you clearly and clearly.

In fact, it is impossible to hide this matter.Except for financial fraud.

"Well, I've almost finished reading it, Mr. Li, please make a price!"

"150 billion!"

Tsk tsk tsk, in less than a year, the valuation has tripled!
"Mr. Li, how did you calculate the 150 billion?"

Li Ruigang said with a smile: "This price is not high, it is less than 20 times PE."

Zhang Yida said: "When Zhefu Holdings became a shareholder, the profit in 15 was 8 million yuan, 6 times the PE.

In 16, the profit dropped by 10%. Why did the valuation triple? "

Li Ruigang explained: "The profit has declined because "The Voice" generated 15 billion yuan in revenue in 11.43, and "New Song" generated 16 billion yuan in revenue in 10.1.

Mr. Zhang, you may also know that at the beginning of last year, the negotiations between Canxing and Talpa in the Netherlands, the copyright owner of "The Voice", collapsed due to price issues.

Then Tang De Film and Television came out and cut off the bullshit, and exclusively bought the copyright of "The Voice of..." program format for 5 years and 4 seasons, while Canxing lost the copyright of the famous work "The Voice of China". "

Zhang Yida knew about this matter, and it was quite a commotion at the time.

Everyone thought that Canxing Culture would lose the copyright of "The Voice of China" without recovering from it. As a result, they launched a copycat version of "Sing China", which is still very popular.

In terms of income, last year's "Sing China" earned 10.1 billion yuan, which was only 1.3 million yuan less than the previous year's "The Voice of China".

The gap is not big, it can be said that the last stand was successful.

Li Ruigang went on to say: "At that time, everyone thought that Canxing would end the game, but they were disappointed.

Relying on more than ten years of experience and accumulation in variety show production, we launched a self-made program "Sing China", which continued the miracle of ratings.

Similarly, after this incident, it once again proved the strength and potential of Canxing Culture. "

Speaking of this, Li Ruigang smiled.The number one brother in domestic variety shows is not called for nothing, thinking that copyright can kill us.

However, Li Ruigang also knew how dangerous it was, and it would not be an exaggeration to call it a gamble.

Zhang Yida believes that after losing the copyright of Good Voice, Canxing Culture can continue to succeed, and the company must have strength.

In addition, the main reason is that the previous good voice was too successful, with a user base and inertia.

Compared with "The Voice", "New Song" is just a different vest.

The TV station has not changed, the host has not changed, the production company has not changed, and the general flow of the program has not changed...

The audience watched it and didn't feel much difference.

Especially Hua Shao, that was simply a highlight of the show.

"So, Mr. Zhang, don't think that I am raising the price indiscriminately. When Zhefu Holdings became a shareholder, the situation was not yet clear.

The contract with the Netherlands has just been terminated, and the new song of the first season has not been released. No one knows what the situation is.

Therefore, when Zhefu Holdings became a shareholder, the valuation was only 50 billion yuan.

Now the situation is clear, and the success of New Song continues.In the foreseeable next few years, the performance will not be lower than last year. "

The timing of the investment is not good, and there are no mistakes.

Zhang Yida was not disappointed, and said, "Canxing Culture relies too much on the variety show New Song, which is not a good thing for a company."

Li Rui just understood, he just wanted to bargain!He smiled and said: "Mr. Zhang, you are right, but you can also see from the financial report that the proportion of income is declining.

The year before last, it accounted for nearly half of the total revenue, and last year it was only a little more than one-third.

This year, it will definitely drop to less than one-third.

In this case, the income structure is still very stable and healthy. "

After hearing this, Zhang Yida did not speak, he was not very optimistic about the future of Canxing Culture.

Originally thinking of a billion-dollar valuation, I came to pick up cheap ones.

The valuation of 150 billion is a bit too high.Although the valuation of Canxing Culture in the previous life once reached more than 200 billion yuan, no one knows whether this valuation can be held up before it is listed and realized.

Any variety show is popular, and The Voice has been launched for several years, and various statistics show that its popularity is declining.

If they leave the ace variety show of Good Voice, and Canxing Culture can no longer launch new ace programs, its performance is likely to change drastically.

And the goodwill of up to 20 billion yuan is another small bomb.

Mengxiang Qiangyin and Canxing Culture are both subsidiaries of Star Chinese Media, and they are regarded as brother companies.

As a result, Canxing Culture acquired this little brother with a net asset of 20.8 million yuan at a price of 1.12 billion yuan, which can be regarded as a related transaction.

Not Internet companies and technology companies, the 20 times premium is indeed a bit high.

Although there is also the possibility of Mengxiang Qiangyin launching an awesome program, but the possibility is relatively small.

This kind of thing that depends entirely on creativity, and even depends on luck, is not as likely as a certain street game company to suddenly launch a popular game, such as Blue Hole.

Zhang Yida smiled and shook his head, "If Canxing Culture can solve the problem of single-point dependence on performance, for example, reduce the proportion of new songs' revenue to less than 20%, Zhonghe Group can agree to a valuation of 150 billion."

"Mr. Zhang, this is a bit difficult for others."

Li Ruigang said unhurriedly: "Many film and television entertainment companies have an obvious problem of relying on a single point of performance. The annual performance of these companies often depends on a single film or a single program that they bet heavily on.

For example: A successful Lunar New Year blockbuster may lead to explosive growth in the performance of a listed film and television company, but if the box office of this Lunar New Year film is not good, the company's performance may face the danger of a cliff-like decline.

Whether it is Huayi Brothers, Huace Film and Television, Hualu Baina, or companies such as Tangde Film and Television or Light Media, there is no exception. "

This is true, a movie does not do well at the box office, and even the movie company goes bankrupt.

"How about betting against performance?"

Zhang Yida decided to take a detour and rely on gambling to achieve the goal of buying shares at a low valuation.

After much deliberation, he decided that Canxing Culture still had to take a stake, and its production of variety shows was an indispensable part of Zhonghe Group's entertainment strategy.

If DouTV or Bilibili wants to enter the field of long videos, they must produce several popular variety shows.Of course, popular online dramas are also going to be produced.

"Bet? How to bet?"

Zhang Yida said with a smile: "It's simple, just use the revenue and net profit in 16 as the standard, and the performance in the next three years should not be lower than this number."

Li Ruigang is also an old man, so he didn't reply immediately after hearing this, but began to think seriously.

Zhang Yida's gambling conditions cannot be said to be strict, and he has not even required a three-year growth rate, which is considered loose.

But my family knows their own affairs, and the new song is already on the decline.

And "Masked Singer Guess Guess", "Great Challenge", "Brilliant Chinese", and "Golden Star Show" can only be said to be not bad.

It is not possible to take over the big responsibility in the hands of Xingesheng and become the company's new trump card.

Zhang Yida didn't ask any further questions, and drank tea quietly at the side.

There is no doubt that Canxing Culture is a good company.At least in terms of domestic variety shows, he is currently the number one brother.

Ari and Penguin also invested in Canxing in their previous lives, and Canxing also co-launched the variety show "Instant Electronic Music" with Penguin Video.

However, Zhang Yida remembers that since this year, Canxing seems to have started to decline, and his performance has deteriorated. He was even robbed of the limelight by iQiyi's "The Rap of China" and Penguin's "Creation 101".

That's why Zhang Yida decided to bet against each other for three years.

"Then what if you haven't finished the bet?" Li Rui just thought for a while before asking.

"Recalculate the valuation at 20 times PE. The original shareholders will compensate Zhonghe Group with equity."

Li Ruigang asked again: "How much does Zhonghe Group plan to invest?"

"Do you want to carry out the share swap between DouTV and Canxing Culture that was mentioned last time?
If not, invest RMB 3 million in cash; if exchange shares, invest an additional RMB 10 billion. "

Li Ruigang said with a smile: "Our board of directors has discussed it. The volume of Doushi is too large. It is not in the same order as us. It is better not to exchange shares!"

Li Ruigang has repeatedly analyzed Douvision's valuation of tens of billions of dollars, but still feels that the valuation is too high and not worth it.

A piece of software that has been around for less than two years is valued at nearly [-] billion yuan. The bubble inside does not know how big it is.

"It doesn't matter if you don't exchange shares, then invest 3 million yuan in cash."

Zhang Yida wanted to tie Canxing Culture to the DouTV chariot, but the other party didn't get it, which made him a little regretful.

"Mr. Zhang, don't you want to invest a little more? 3 million is calculated to be 2% of the shares."

Zhang Yida said with a smile: "Zhonghe Group is still a start-up company with limited funds, and we will add more in the future when we have more funds! Now we can invest in some shares and form an alliance."

In fact, Zhang Yida wants to invest in his one billion two billion, and wait for three years to guarantee that he will win the game and make money.

But one is that the current funds do not allow it, and the second is that the equity of Canxing Culture is scattered, and many outstanding producers have shares.

He won too much in the bet, became a major shareholder, and was dumbfounded when he forced the talent away.The most important asset of such a company is its people.

Only with talents can there be a steady stream of blockbuster variety shows.Without talents, you can't afford to pay for two years.

The company is a bit tasteless, just learn from Penguin and Ahri to invest in one or two shares, and there is no need to pursue holding shares.

"Well, 3 million is 3 million. If you want to bet against each other, you need to negotiate with the original shareholders."

Zhang Yida smiled and said, "Don't make me wait for several months like last time."

Li Ruigang waved his hands again and again, indicating that he would not. The 16-year financial report has been delayed by him, and it is meaningless to delay it any longer.

Zhang Yida stayed in Shanghai for another day, and after the shareholders of Canxing Culture arrived, they signed the investment agreement and the gambling agreement together.

Li Ruigang gave Zhang Yida a small discount. The 150 billion valuation was counted as post-investment, not pre-investment. 3 million invested in, just occupying 2% of the shares.

(End of this chapter)