Source of this article: Times Finance Author: Zhang Xuemei
On the evening of October 12, the record company of Lu Han , Fenghua Qiushi submitted the Hong Kong Stock Exchange for the fifth time, and it was only one and a half years since its first delivery.
Fenghua Qiushi is a music entertainment service provider that has operated in China for more than 10 years. It manages 11 music artists and 10 trainees, including Lu Han, Black Panther Band , Hao Yun , Dong Youlin , etc.
According to the Zhushi Consulting Report, based on the revenue generated by the granted music copyright and recording in mainland China in 2021, it ranks 15th among more than 400 music record companies with a market share of about 0.6%; among more than 200 music record companies headquartered in mainland China, it ranks 4th with a market share of about 1.5%.
Previously, it submitted its statements to the Hong Kong Stock Exchange four times on January 22, 2021, September 27, 2021, November 15, and April 1, 2022.
It is worth noting that over-reliance on a single artist may bring greater risks to the company. In addition to Fenghua Qiushi, the superstar legend backed by Jay Chou also submitted the Hong Kong Stock Exchange for the third time this month, while " Wang Yibo concept stock" Lehua Entertainment suspended its IPO after the subscription expires.
A senior variety show producer told Times Finance : "In the current clear and clear environment, entertainment companies and celebrities are subject to more constraints, and their revenue is showing a downward trend." The decline in performance and the increased uncertainty of artist income also affect the success rate of entertainment companies going public.
Image source: TuChong Creative
Over-reliance on major artist Lu Han, whose net profit in the first half of the year was only 830,000 yuan
Fenghua Qiushi was founded in 2014. Founder and Chairman Li Hui was once the keyboardist of the band where rock singer Cui Jian is located. The company was formerly Beijing Fenghua. It was founded in 2010. In 2011, it signed a four-year full appointment including Wang Feng records and performances. In 2015, he signed an exclusive music contract with Lu Han, a popular traffic artist at that time.
has developed to this day, and the company's main business is divided into three parts, namely, the granting of music copyrights and music recording services, concert hosting and production and artist management.
According to the prospectus, Fenghua Qiushi has established its own music library since 2011 and authorized the copyrights of songs, albums, MVs and other types to various digital streaming platforms, including Tencent Music, Migu Music , NetEase Cloud Music, etc., to obtain copyright income. In the fiscal year 2018-2021 and the first six months of 2022, the Group's revenue from the music copyright and recording sectors granted by the Group accounted for 30.33%, 90.93%, 97.45%, 90.04% and 95.14% of the total revenue, respectively.
However, in recent years, the number of original music works of the company has decreased, and the number of music works purchased has increased significantly. In the 2018-2021 fiscal year, Fenghua Qiushi purchased 0 pieces, 0 pieces, 16 pieces and 262 pieces respectively. In addition, although he has been deeply engaged in the music field for more than 10 years, Fenghua Qiushi's revenue rarely exceeds the 100 million yuan mark.
Finance 2018-2021 and the first half of 2022, the company recorded revenues of RMB 100 million, RMB 55.605 million, RMB 70.561 million, RMB 81.858 million and RMB 42.239 million respectively; the annual profits were RMB 18.63 million, RMB 18.818 million, RMB 42.717 million, RMB 33.251 million and RMB 833,000 respectively.
Company revenue and profit fluctuated greatly, which to a certain extent was due to the restrictions on offline performances. Since the 2020 fiscal year, Fenghua Qiushi has canceled no less than 15 large-scale performances, including the termination of a concert production project with a contract amount of 2.9 million yuan.
It mentioned in its prospectus that the company's business relies heavily on core artist Lu Han. In fiscal year 2018, Fenghua Qiushi obtained 70.9 million yuan in revenue from Lu Han, accounting for about 71% of the group's total revenue. On April 13 of that year, Lu Han's physical album "XXVII" started pre-sale, with sales exceeding 16,000 copies in 3 minutes. In the second half of the year, a tour concert was launched and the single " time stopped ".
Finance 2019-2021 and the first six months of 2022, the company's revenue from Luhan Group was RMB 14.2 million, RMB 15 million, RMB 7.6 million and RMB 10.7 million, respectively, accounting for 25.5%, 21.2%, 9.3% and 25.2% of the group's total revenue, respectively. As a major artist, Feng Huaqiushi is currently preparing for an online concert for Lu Han, which is expected to be held in the second half of this year.
However, it is also trying to reduce its dependence on a single artist.This year, the company promoted its artist Hao Yun to participate in the Mango TV variety show "Break Through Thorns" and signed with artist Dong Youlin in August. The first single of his new album has been launched. Recently, Fenghua Qiushi joined hands with Migu Music to hold an original music competition.
However, as of the first half of this year, Fenghua Qiushi obtained 10.7 million yuan in revenue from Lu Han, accounting for 25.2% of the total revenue, and the "deer content" is still not low.
Entertainment Company IPO "Waterloo", relying on a single artist is very risky
In addition to Fenghua Qiushi, Lehua Entertainment and Superstar Legend, which rely too much on a single artist, have not been smooth.
On October 5, Superstar Legend Group (hereinafter referred to as "Superstar Legend"), known as "Jay Chou Concept Stock", submitted the prospectus book to the Hong Kong Stock Exchange for the third time. The prospectus shows that Jay Chou's agent Yang Junrong and his mother Ye Huimei jointly hold 27.63% of the shares through the company Legend Key, and Fang Wenshan serves as the company's chief cultural officer. Times Finance searched keywords and found that "Jay Chou" appeared 492 times in its prospectus.
Superstar Legend’s main businesses include operating Jay Chou’s IP, participating in Jay Chou’s concerts and variety show planning, and selling health management products. In 2019, 2020, 2021 and the first half of 2022, the company's revenue was RMB 87 million, RMB 457 million, RMB 365 million and RMB 125 million, respectively. It previously submitted statements to the Hong Kong Stock Exchange in September 2021 and March 2022 respectively.
However, in March 2022, Liu Genghong unexpectedly made an appearance and became another pillar artist of superstar legend. As early as November 2021, Superstar Legend and Liu Genghong established Talent Planet (Hong Kong) Co., Ltd., with the two parties holding 70% and 30% of the shares respectively, aiming to engage in the training of KOLs and cooperate with various MCNs to develop product sales through live broadcasts through social e-commerce channels. In the latest prospectus submitted by
, Superstar Legend mentioned that it plans to create and plan a variety show in the first half of 2023 with Liu Genghong as the center, and Liu Genghong will serve as the host; in addition, a fitness-related concert attended by Liu Genghong, Wang Wanfei (Liu Genghong’s wife) and other stars are being planned. The company tries to enhance the company's comprehensive strength by building Liu Genghong.
is different from Fenghua Qiushi and Superstar Legend. Lehua Entertainment has passed the Hong Kong Stock Exchange hearing before, but it is still difficult to go public.
htmlOn September 1, Lehua Entertainment, which owns artists such as Wang Yibo, Meng Meiqi, Wu Xuanyi, and other artists, announced that it would suspend its IPO after the subscription period expired. On August 7, it passed the Hong Kong Stock Exchange hearing and the subscription began on August 24, and the subscription ended on August 31.According to Sina Finance, sources said that in the face of global inflation and the epidemic, the capital market continues to be sluggish. In addition, Hang Seng Index continues to fall and new stocks break the issuance. After careful consideration, Lehua Entertainment decided to suspend the IPO of Hong Kong stock .
prospectus disclosed that from 2019 to 2021, Lehua Entertainment's revenue was RMB 631 million, RMB 922 million and RMB 1.29 billion, respectively, with an annual compound growth rate of 43%. Operating profit also increased from 179 million yuan in 2019 to 398 million yuan in 2020, and reached 505 million yuan in 2021.
Among them, the company's ace artist Wang Yibo contributed a lot of income to him. Some self-media speculated based on the prospectus that in the past three years, after deducting the company's commission, Wang Yibo's income from Lehua Entertainment increased from 32.27 million yuan to 300 million yuan, which shows his ability to attract money.
Co-founder of the Collaborative Strategic Management Group Huang Lichong told Times Finance: "In recent years, the country has been standardizing the management of the entertainment industry, so this section is risky and unstable in the eyes of the Hong Kong Stock Exchange. In addition, if the company relies too much on an artist, if a scandal occurs in an artist, it may have a fatal blow to the company."
According to Wind information statistics, as of September 15, 50 companies have IPOed on the Hong Kong Stock Exchange this year, a year-on-year decrease of 28.57%; a total of HK$57.279 billion, a year-on-year decrease of 79.06%.
Huang Lichong also pointed out that the number of companies that have successfully listed this year has decreased, and the performance of many companies is declining, so there will be fewer projects that can meet the requirements.
