Wang Jianlin, China’s former richest man once again mired in a cash flow crisis, is frequently selling his shares and assets in response to the urgent need to be caught off guard and the huge share buyback pressure facing the possible failure of Zhuhai Wanda’s listing at the end of the year.
At this moment,A mysterious post-80s businessperson stepped forward and bought a 49% stake in Wanda’s investment for 2.262 billion yuan.In addition, Wanda has successively transferred equity and reduced its holdings to Lu Lili, the proprietress of Oriental Fortune, and Xinxian Rongzhi. Wang Jianlin has temporarily weathered the crisis.
And this billionaire, who is not well known to the outside world, is Ke Liming, the chairperson of the board of directors of Chinese Confucianism and Italy. He crossed the border from hedge funds to the film investment field, and in this extremely risky industry, he frequently hit hit hit hits and became famous.
He does business with Pony Ma, China’s Confucianism and Tencent’s equity business is closely tied; he once helped Xu Jiayin, who was in crisis with blood transfusion; now this man, who is difficult to open the company’s official website and hard to find on the rich list, has become Wang Jianlin’s "white knight".
However, behind these transactions, there was his meticulous planning and the huge ambition of capital operation.
First, concocting explosions
Movies are a business with a very high failure rate, even for big productions, well-known directors, and popular movie stars, there are many precedents for capsizing in the gutter.
As Yan Yan, a partner at Saifu Asia Investment Fund, put it, "art and the box office seem to be in constant contradiction."
In recent years, the market environment of the film and television industry has deteriorated, and the original "the principle of factor sparsity" has become the "rule of nine".Only the top 10% or even 5% of movies can make money.
But in this miserable track, Colliming, who debuted halfway, rarely failed in the early days of his business.
After graduating with a master’s degree in finance, he took a step-by-step job at Persistent Hedge hedge fund in Hong Kong. In 2009, Asian finance swept the entire capital markets. It was said that he lost money in the stock market that year, and then decided to leave the financial industry and start a new business.
This year, he took the remaining 2 million yuan to the advertising company founded by his brother Ke Jiuming, and renamed the company "Beijing Ruyi Xinxin Film Investment Company" …
Ruyi Pictures initially cut into TV dramas. With years of investment banking thinking, he has a high degree of sensitivity and judgment on the cost and profit prospects of TV dramas, and almost "can roughly estimate the production cost after reading the script".
During this period, Ruyi Films planned and produced well-known works such as "Iron Teeth Bronze Teeth Ji Xiaolan 4", "Ex-Wife’s Station", "Spring of Li Chun" and "Woman of the Swordsman Family". The TV series "No War in Beiping" won the Magnolia Award, the Flying Sky Award and the China Golden Eagle Excellence Award.
Due to the saturation of the TV drama industry, he turned his attention to movies. After studying classic IPs such as Marvel, Ke Liming decided to cut into the IP and set up a "Confucian-Italian Books" company, planning and publishing the "To Youth" series, and successively acquired "Langya Bang", "Biography of Miyue", "Three Lives and Three Miles and Ten Miles of Peach Blossom", "No War in Peking" and other best-selling online articles, and turned them into film and television dramas.
In 2013, Ruyi Film and Zhao Wei jointly produced the "To Youth" series of films, which became an instant hit. After that, the box office of "Old Boy" and "Small Times 3/4" became popular, and the company became a well-known producer on the big screen overnight.
And "Old Boy Raptor Crossing the River" spawned the hit song "Little Apple", which also introduced the outside world to Colliming’s marketing talents.
In recent years, although there are not many works invested by Confucianism, there are not a few excellent performers. Behind the box office 5.40 billion "Hello, Li Huanying" and this summer box office champion "Vanishing She", there are Confucianism Pictures.
"I would never define myself as a filmmaker, I am an investor," Mr. Colliming stressed in an interview. It was the abandonment of past film industry empiricism that allowed the young man to create a methodology using investment models and financial thinking.
He brought quantitative analysis and big data to the extreme, and established a unique evaluation system. First of all, he subdivided the theme into characters, emotions, scenes, freshness, etc., and conducted data analysis on these subdivisions.
Secondly, it summarizes the "eight-character formula" of popular IPs –Life and death, poverty and wealth, love and hate, poverty and prosperity.
If a work gets more than "7 points" in his own evaluation system, Ke Liming will immediately start the director’s "database" and match it with the director’s strengths and weaknesses, audience ratings of past works, and box office results, thereby increasing the success rate of high-return births.
In Ke Liming’s view, investing in movies is like investing in stocks. "It is similar to studying the relevant indexes of the broader market. What is the standard index of the broader market, and what is the correlation of the same industry? It is completely operated according to the analysis method of stocks."
It can be said that Colliming’s style of play was undoubtedly a dimensionality reduction blow to the Chinese film industry at that time. He used a capital yardstick to reshape the film production process and became a rising star in the industry.
II. Capital thinking
In the golden age of Chinese movies, it would be a pity if Ruyi Pictures’ perfect capital story was not realized in time.
For the investment banker, this is a once-in-a-lifetime opportunity.
As early as August 2014, China Technology Holdings planned to acquire Ruyi Pictures in 1.50 billion, and the valuation at that time was based on the latter’s performance commitment of 130 million yuan in 2015.
At that time, the market was full of doubts. Colliming explained that the company already had a lot of IP reserves, which was equivalent to driving down future costs. He stressed: "The value of the entrance cannot be evaluated. If we can produce five movies in the next year, and the box office will be 35 billion yuan per year, then our value will be underestimated."
But for this practice of using future profit promises as valuation reference coordinates, regulators paid close attention, and investors also had many controversies. Finally, a year later, the deal collapsed.
In 2015, Tianshen Entertainment’s M & A fund announced the acquisition of 49% of Ruyi Film for 1.323 billion yuan in cash. That is to say, in just one year, Ruyi Film’s valuation has reached 2.70 billion yuan, soaring 80%.
But less than a year after the acquisition, Tianshen Entertainment sold it to Dayu Assets for 1.617 billion yuan, and the overall valuation of Ruyi Pictures has risen to 3.30 billion yuan.
In 2020, Ke Liming’s life trajectory is linked with Ma Ma and Xu Jiayin. At that time, Hengteng Network, which aspires to become "China Netflix", 7.20 billion Hong Kong dollarsFully acquired assets such as Ruyi Film, Pumpkin Film and Television, and Jingxiu Network. At this time, the valuation is nearly 5 times that of 2014.
However, a few months later, Hengda debt thunder, Hengteng network shares were sold. During the period, Ke Liming to 4.433 billion Hong Kong dollars to take back Hengda held 739 million shares, than when he sold to Hengteng network a lot more expensive, which is also the side of ke justice.
Since then, Hengda has been reducing its holdings all the way, eventually cashing out more than 10 billion Hong Kong dollars and clearing all its positions. In 2021, Hengteng Network was renamed China Ruyi, and Ke Liming served as the chairperson of the company.
In addition, Ruyi Pictures has also spread "scandals" about capital transactions with Jixiang and Shanshan.
Hengda out, the relationship between Tencent and Ruyi film increasingly close, in addition to subscribing to China Ruyi just issued 4 billion Hong Kong dollar fixed share, but also in the content authorization, membership sharing and pumpkin film cooperation, but also for Ruyi games to provide technical services and channel promotion help.
It can be seen that,Since he started his business, Ke Liming seems to have set the goal of capital operation for Confucianism.He used a brand-new routine to invest in movies, finding a new way to support non-professional directors such as Xiao Yang, Jia Ling, and Chen Sicheng, and forcefully broke out into a world.
After studying the overseas streaming media model, Ruyi’s Pumpkin Movie is benchmarked against Netflix, with the ad-free membership system as the highlight, with the content production of Ruyi Pictures, the content authorization of shareholder Tencent, the experience of using Pumpkin Movie, and the film and television fans.
In addition, its Jingxiu Games can also be developed in conjunction with the IP of Ruyi Reserve, realizing the trident combination of "film and television production, investment + streaming media + games".
From finance to film, Mr. Colliming has struggled to find ways to raise the valuation of his stake, and now, in the midst of Wanda’s troubles, he has the chance to take a stake in China’s largest cinema company.
III. Engage in the downstream
There is one similarity between investing in the stock market and investing in movies, and that isIt is impossible to predict accurately forever.
Perhaps a certain method has a very high success rate in a particular period, but times change, audience preferences, trends, and changes in artistic techniques are unpredictable, and it is impossible to eat fresh food all over the world.
Moreover, even if you bet on popular works, it does not mean that you will be able to make money. For example, in 2013, the box office of "To Youth", "Old Boy" and "Small Times" invested by Ruyi exceeded 1.50 billion, but Ruyi Xinxin lost 2.53 million yuan that year.
Film and television investment and PE/VC investment are very different in terms of returns. Venture capital may be able to generate huge returns through one or two successful projects, helping companies gain fame in the industry and acquire more good projects.
But film investment is difficult. On the one hand, the film industry chain is like shooting a movie, which is long and complex. Of the box office revenue of the movie, 3.3% is used to pay taxes, 5% is given to the film development fund, and the remaining nearly 50% goes to the theater.4% to 6% goes to the distributor, and about 40% goes to the producer.
So the movie income is shared by everyone, and the current movie investment is basically produced by many partiesAlthough Ruyi has bet on multiple hits, they are all jointly produced in "Vanished Her" and "Hello, Li Huanying", not the first investor, and the share is limited.
On the other hand, a good movie cannot find a so-called fixed formula. After the success of Ruyi Film in 2013, the follow-up of its own IP works was weak, which caused the youth to change the main creator and hit the street; the movie version of "Three Lives, Three Worlds and Ten Miles of Peach Blossom" was complained as a bad movie.
Since the beginning of this year, among the works invested by Confucianism and Italy, the low-cost production of "Keep You Safe" has performed well and is expected to generate some profits, but "Exchange Life" is likely to lose money, and the movie "Enthusiastic" is still in theaters.
In 2022, China’s Ruyi, which originally relied on film investment, accounted for 88% of its business composition, plus Internet community value-added services accounted for more than 90% of the income, while content production only received 100 million yuan of income, accounting for only 8%.
That is to say, in the cold winter of the film and television industry, it is Pumpkin Movies that has supported the company’s basic disk. China Ruyi has not released the latest user data of Pumpkin Movies, but as of the end of 2021, Pumpkin Movies has accumulated registered member 70.84 million, an increase of 101% year-on-year; cumulative paid subscription users 28.68 million, an increase of 472% year-on-year.
Although after years of hard work, Confucianism has amassed a high reputation in the industryThe contribution of film investment to performance is limited and volatile.
Today, after investing in Wanda, Shanghai Ruyi indirectly holds a 9.8% stake in Wanda Film, although as a financial investment. But through this deal, Ke Liming has successfully intervened in downstream channels. You know, Wanda Film is the absolute leader of domestic cinema chains. As of the end of June 2023, Wanda Film’s market share reached 16.8%.
Colliming pulled Wang Jianlin, and the feedback he got must be the convenience of arranging films in his works, as well as the greater voice over the cinema.
Write at the end
In the film and television industry, the only constant is change itself.
"Li Du’s poems have been passed down through the ages, and so far they are not new." It is the norm for a generation of newcomers to replace old people.
When Ke Liming joined the industry, he built a country with investment banking thinking, and his valuation soared and his reputation grew. But today, his thinking has seemed a little old. Investing in Wanda may be able to make it new by supplementing the industrial chain.
But for a company whose performance fluctuates so violently, relies heavily on the streaming business, and has little profit from movie investment, it has little effect on increasing market value other than following the fluctuations of the industry market.
Of course, this is also the flaw of all film and television companies, not Colliming alone.
