In the past 2020, the entertainment industry, especially the upstream and downstream of the offline performance industry, has suffered a long winter. With the popularity of variety shows, new idols have emerged in an endless stream. In this context, many entertainment companies have the enthusiasm to attack the capital market.
Recently, Xingkong Huawen Holdings Co., Ltd. officially submitted a prospectus to the Hong Kong Stock Exchange on November 12, intending to list on the main board, with CICC and China Securities as joint sponsors.
As early as 2006, Canxing Culture, the main operating entity of Star Chinese, was established, and now it has become the leading brand in China's entertainment-related IP industry.
According to Frost & Sullivan's report, Star Chinese is the largest variety show IP creator and operator in China in terms of revenue in 2020. In addition, Star Chinese also owns and operates one of the largest film IP libraries in China, and is also a leading music IP creator and operator in China.
Xingkonghuawen owns a number of popular variety show IPs with various genres and a wide range, including music variety shows ("The Voice of China", "Masked Singer Guess Guess", "Songs of China" and "Outstanding Chinese") , dance variety shows ("This! Is Street Dance"), talent variety shows, talk shows, outdoor/cultural variety shows ("The Great Wall") and other variety shows.
In terms of music IP. As of June 30, 2021, Xingkong Huawen's music library has 8,002 IPs, including 3,363 live music recordings produced during the creation of music variety shows, 2,840 songs produced for signed artists, and 1,799 lyrics and musical compositions.
In terms of movie IP. As of June 30, 2021, Star Chinese has 757 popular Chinese films produced in Hong Kong over the past few decades, such as "Raptors Crossing the River", "Fist of Fury", "A Chinese Ghost Story" and "Rouge" ". In October 2020, Star Chinese's first drama production "Reading Lesson" was filmed.
Star Chinese’s income mainly comes from the IP operation and authorization of variety shows, music IP operation and authorization, film and drama series IP operation and authorization, and other IP-related businesses.
According to the prospectus, in the past 2018, 2019, 2020 and the first half of 2021, the revenue of Xingkong Chinese was 1.739 billion yuan, 1.807 billion yuan, 1.560 billion yuan and 155 million yuan respectively, and the corresponding net profits were 476 million yuan. , 380 million, -0.28 billion and -0.25 billion.
China's pan-entertainment market has experienced rapid growth in the past few years, with the market size increasing from RMB 244.2 billion in 2016 to RMB 555.9 billion in 2020, representing a CAGR of 22.8%. It is estimated that the market will further increase to RMB 1,334.8 billion in 2025, with a compound annual growth rate of 19.1% between 2020 and 2025. Judging from the continuous expansion of the market scale, the prospect is still promising.
This is also an opportunity for Xingkong Huawen to expand its own size. But as it grows, its competitors are getting stronger. Companies such as Hualu Baina, Huace Film and Television, Beijing Culture, Perfect Film and Television, Huayi Brothers, Gravity Media, and Tangde Film and Television are all accelerating their deployment of variety shows.
For Xingkong Huawen, which is not that high in size and popularity, the industry pressure cannot be underestimated. Streaming media platforms have impacted the core position of entertainment companies to a certain extent. It is no longer feasible for entertainment companies to rely on concerts, radio stations, TV stations and other publicity methods. The audience has changed from a passive recipient to an independent communicator. How to attract the attention of the audience and drive consumption has become the key.
It is not difficult to imagine that the variety show market may gradually decline in the future. With the upgrading of the Internet, if Xingkong Chinese can find some new growth opportunities from it, it may become a new confidence for it to hit the IPO.
Sentence|IPO Catcher