Chapter 381: 40 Billion Valuation

"Grimshaw."

Xie Jingxing saw an oil painting depicting a moonlit landscape in Concubine Pei's office, and he moved closer to take a closer look in surprise.

Grimshaw was a British Victorian-era painter who excelled in still life night scenes, and his mid- to late-period masterpieces were worth seven figures at auction.

Not only that, the table he uses in his office is called a desk, and the desk in Concubine Pei's office has a special term called "big desk".

It’s an Italian luxury brand, and the rest of the sofa, bookcase, and furniture are all the same. The entire office furnishings will cost at least several million.

Xie Jingxing often saw luxurious offices, but this was the first time he had seen such a luxuriously decorated office in a rented industrial park.

As he was looking around, he heard a knock on the door. He called out "Come in" and walked to the desk and sat down.

"Hello, Mr. Xie. I am Ding Jun, the current general manager of our studio."

A middle-aged man with a square face and thick eyebrows walked into the office. He had broad shoulders, was short, and had a steady demeanor, and his demeanor revealed a mature temperament.

This person's previous resume background was as a middle-level manager in the film and television production department of China Film Group. The offer was too much, so he jumped to join Kujiji Studio.

"People from Tencent wanted to discuss investment cooperation, but we just sent them away."

Ding Jun was naturally more clear-headed than the female employee at the front desk. After a brief self-introduction, he acted as if he was reporting his work to his boss.

"Sit down and talk."

Xie Jing Xing accepted it calmly, and asked while turning on the computer: "How do they want to invest?"

"In the first year or so of the studio's establishment, we used a lot of money to buy literary IP copyrights from the market at high prices. Qidian Chinese Network was one of our largest trading partners at the time."

Ding Jun flattered the boss subtly: "It was not until the end of last year that Tencent acquired the entire Shanda literature business, including Qidian Chinese Network, from Shanda Group and reorganized it into Tencent Reading Group."

"Since then, Qidian Chinese Network has been keeping a tight lid on IP copyright sales, and even suspended several copyright deals that were under negotiation with us, while internally investigating past transactions with us to see if there was any corruption or violation of regulations."

He has a strong ability to make connections: "To put it bluntly, the market had inaccurate expectations of the value of literary IP in the past two years, and we were taken advantage of. Now that the value of literary IP has soared, and film and television adaptations are becoming more and more successful, they are jealous and regretful, thinking they lost money."

Xie Jingxing smiled knowingly. Tencent is a large company with a huge business, so it would only mess up when it has nothing to do. It was probably just Wu Wenhui and the original Qidian founding team who held a small number of shares that were messing around.

It is highly likely that they do not really feel that they have lost money, but with the support of Tencent, they are no longer what they used to be. They have the ability to adapt literary IP into film and television, and they can eat the whole fish without selling the high-quality copyright to outsiders.

“So the people who came are from China Literature Group?” Xie Jingxing blocked out the invalid information and straightened out his thoughts.

Ding Jun nodded and said, "China Literature Group wants to invest in us. They want to sell the copyright to us, and we can produce it together."

"What's the valuation?" Xie Jingxing did not comment.

"The initial valuation they gave was 30 billion, with an additional performance betting clause."

Ding Jun paused and explained: "This has something to do with the 'Rocket Girls 101 Girls Group'. They believe that the idol management business is sustainable. The 'Creation Camp' talent show has been built into a long-term brand. In the future, there will be a steady stream of 202 boy groups, 303 girl groups, and so on."

"The valuation is too low." Xie Jingxing frowned.

Film and television production companies are non-cyclical and asset-light operations. What is valuable is people and copyrights. Most of them use PE (profit) for valuation, and the valuation is relatively floating.

For example, Yang Mi’s Jiaxing Media bets on a net profit of 3 million in the next three years and gives it a valuation of 15 billion. This is an estimated dynamic PE valuation for the next three years.

Then you can pick up a computer and do the math. Last year, Kujiji Studio made a net profit of more than 3 million yuan from the movie "Lost in Thailand". Later, it made a small investment but high return on investment "So Young", and a TV series "Where the Wind Goes" with a viewership rating of over 1%. It also made money from several investments in film and television series.

Taking into account the income from Concubine Pei's own brokerage business, her annual net profit was as high as 4.2 million. Otherwise, how could she have the sufficient cash flow to buy a luxurious office?

She, alone and with a few agents as assistants, earns more than thousands of listed companies working hard in a year. This is the light asset operation of a film and television company.

Therefore, the valuation of 30 billion based on static PE is too low, which is totally unworthy of the film and television industry market where the bubble has taken off, not to mention that the valuation is given according to the dynamic PE based on the signed bet.

"Yes, I have discussed this with Mr. Song, and I also think the valuation is low."

Ding Jun said the opposite: "China Literature Group is relying on Tencent's support to bully customers, thinking that they have the initiative in controlling the source of IP copyrights and can support us in film and television adaptation, variety show production, and artist management operations."

"But in fact, we have no worries at all as we are deeply tied to Pony Ma in film and television production. The direction of the company's steady development of IP copyrights in the next five years is well-founded."

As of today, there is no better option for film and television companies to obtain strategic financing than to introduce Tencent.

A high-quality cultural IP is more than just a film or TV adaptation. Animation, games, music and other derivative products can all make money.

If other investors gave a valuation of 30 billion, Ding Jun would not even look at it. According to the current market conditions, a valuation of 40 billion is just the starting price, and how much financing share he is willing to give depends on his mood.

This is the difference between considering the healthy development of a company and taking advantage of a hot market to make a quick buck.

"Let me take a look at the half-year financial report and this year's development plan."

Xie Jingxing ignored Ding Jun's attitude, thought for a moment and added: "Let Mr. Song come over."

Ever since Concubine Pei went to the United States to take care of her pregnancy at the end of March, Song Anli has been independently responsible for the film and television production business in the pan-entertainment layout, and he has basically never intervened.

It is okay to have a rough understanding of the studio management situation now. The small family workshops that were common in the entertainment industry where the mother was the general manager have evolved into a company with dedicated professional managers, clear financial and business divisions, and long-term planning.

Xie Jingxing thought to himself that this was beyond his expectations.

At first, he supported Concubine Pei in setting up her own studio, just as a controller from a high position, he dressed up the collection beautifully from a bird's-eye view.

Later, he acquired Pony.com because Concubine Pei wanted to buy shares in Pony.com, and then he had the idea of ​​getting involved in pan-entertainment.

More than two years have passed in a flash, and they need to re-examine their personal relationship and career, and perhaps make corresponding adjustments and balance.

Ding Jun left the office and quickly sent all the information to Concubine Pei's office computer mailbox. Xie Jingxing first picked out the half-year financial report to check.

The so-called financial report is essentially the same as a physical examination report, including profits, liabilities, and assets.

Xie Jingxing is not as good as a senior accountant, but he can roughly see the operating status of a company through the financial report, which is basically okay.

In terms of profit, it mainly invested in the movie "Left Ear" and co-invested in three movies: "The Monkey King: Hero is Back" and "Bride Wars".

Among them, "Left Ear" had a net profit of 1.4 million yuan, and the two jointly invested films had a net profit of 700 million yuan.

It can be seen that the company has a good eye for film selection. The main film it invested in is an adaptation of its own novel, and the other two co-investors are Pei Fei Renwu and Xiao Ma Pentium's Zhong Lifang who help with screening.

Together with her own business and the agency business of her artists, the net profit of Kujiji Studio in the first half of this year totaled 2.3 million yuan.

The liabilities mainly include multiple literary IP bank pledge loans and payables for film and television production investments, totaling 3.5 million yuan. The assets are also dominated by literary IPs, including more than 50 literary IPs for film, television and game adaptations, agency contracts for seven artists and a girl group, two unreleased TV series and one unreleased film.

The value of people and copyright cannot be quantified.

If Xie Jingxing is willing to transfer the money from one hand to the other, and Xiaoma Pentium spends 100 billion to purchase the film and television adaptation rights of a novel from Kujiji Studio, then the assets of the latter's novels of the same type will not be less than 70 billion.

Just randomly think of a number, and the total assets should be around 8 million yuan, which should be appropriate.

This is the financial statement. In the development plan, the company mainly invests in films adapted from literary IPs and participates in film and television dramas in collaboration with Pony.com, demonstrating the development prospects of the Kujiji Studio.

Not only can they make money from investing in and producing film and television dramas, but they can also earn another level of income from artist brokerage by packaging their artists into the film and television dramas they invest in and produce.

As artists' fame grows through their participation in film and television dramas, it brings in external income such as advertising to the studio, further improving its revenue capacity and expanding its film and television drama investment and production business.

According to this ideal operating model, if Tencent wants to invest in Kujiji and come with a bet agreement, it should give a high valuation based on the dynamic PE.

The range of 55-65 billion is more objective.

Of course, this valuation only exists on paper. Kujiji Studio has only been established for two years and its long-term operating capabilities are questionable.

Everyone can pull data, but if you really want to invest money...

"40 billion?"

Xie Jingxing sighed and whispered to himself, operating the computer to switch to his email, looking through the history records for a long time and found a shareholding structure email that Song Anli had sent him.

"Dong dong dong."

There was a knock on the door, and he casually called in, "The cash flow is abundant. You are living a comfortable life recently, right?"

"Mr. Xie, it is all because of your support and care that we can develop so well."

It was not Song Anli, but Pei Fei's fat female agent, who was accompanied by a pretty and elegant girl.

Xie Jingxing looked at him briefly: "Aren't you bringing Chen Duling with you?"

"Ling'er is on set filming and her executive agent is with her. There's nothing important to do. I'll just be in charge of the overall artist management business in the company."

The fat woman smiled and spoke vaguely. She wanted to say that she was promoted to the manager of the artist management department of the studio, so as to establish her status in front of the girl. However, she felt that it would be taboo to brag in front of Xie Jingxing, as it would annoy him.

He simply brushed it off and turned to introduce the girl next to him: "This sister is Zhang Huiwen, a Mou girl. Last year, she starred in Zhang Yimou's "Coming Home", and this year she starred in "Gardenia Blossoms", which also grossed over 100 million yuan at the box office."

"Hello, Mr. Xie. I really like your show Produce Camp 101. I watch every episode."

Zhang Huiwen made a dry and polite remark, saying that their statuses were so different that she really didn't know what to say.

The fat woman took advantage of the opportunity to say something: "Hui Wen hasn't signed with an agency yet, come visit our studio."

"Oh, that's good. The film and television industry will be decentralized in the future, and it will become more and more professional. Going it alone is equivalent to starting a business, which has lower risks and competitiveness."

Xie Jing Xing encouraged calmly: "We very much welcome you to join us. Your personal career development plan will be more secure."

"Thank you for your recognition."

Zhang Huiwen also didn't take him seriously. A "Mou Girl" has produced a high-quality movie as the female lead within one year of her debut. She is a genius in her own field.

Personal studios are very popular now, and female stars who are not as good as her have all jumped out of their agencies to become independent. But since she sees her future is getting better and better, why should she join an agency and be profited from the price difference?

She was only here today out of courtesy. When the fat woman heard that Xie Jingxing had come to the company, she immediately took the opportunity to boast about how powerful her company was.

"Boss Song, Boss Ding, you guys go ahead and get busy."

As they were talking, Song Anli and Ding Jun walked into the office side by side, and the fat woman took Zhang Huiwen and left.

"Last month, Yang Mi's Jiaxing Media was listed on the New Third Board, and its valuation doubled."

Song Anli wore a dress with a casual suit jacket on the outside. In Beijing, she is a big boss and does not need to wear formal attire all day long.

Xie Jingxing stood up and sat on the reception sofa: "I saw her in Nanchang yesterday. Jiaxing seemed to be discussing investment with a subsidiary of Oriental Pearl."

"It's fast enough."

Song Anli was stunned for a moment, then sat down next to him without hesitation: "Last month, Lehua Entertainment was also listed on the New Third Board, Li Bingbing and her sister established their own studios, and Zhou Xun and Chen Kun jointly established a company."

"It is clear that capital inflows are accelerating."

She smiled and pointed at the door: "It seems that the girl just now wants to start her own business."

The liquidity of the New Third Board is like shit. There are only two situations for companies to be listed on the New Third Board: either they are delisted from the A-share market and listed on the New Third Board, or they use the New Third Board as a transitional springboard to find opportunities for listing or being acquired.

No matter how bad it is, it still belongs to the capital market. If it goes up, the valuation will increase several times.

"The film and television industry is going crazy." Xie Jingxing felt more and more hesitant.

Song Anli asked in tacit understanding, "Will you go crazy enough to use online ride-hailing services or live in the local area?"

"I just saw the financial report, and it shows that Kujiji's debt is 3.5 million." Xie Jingxing shrugged.

Song Anli couldn't help but smile. The only way to owe money was to owe 3.5 million yuan, which was not enough to burn for three days when the Great Famine War was fierce. What could it help?

The men around her don't like her, so at least in the short term, she has a great degree of autonomy in the film and television layout.

"I want to invest in Yang Mi's Jiaxing."

Song Anli grasped the key point and suddenly said, Xie Jingxing was speechless for a moment, she continued: "For example, the investment target is not necessarily Jiaxing."

"It can also be the animation production studio behind the movie "Journey to the West: Hero is Back" that Pony.com invested in this year, or a director's studio with an IP brand."

She was well prepared and explained clearly: "This type of creative team with the ability to produce original content could originally be tied together through long-term cooperation, but now capital speculation is strong, and they often spend two or three times the price to poach people."

“So I think we should adopt the investment and shareholding binding approach to maintain the competitiveness of our film and television production.”

Xie Jingxing thought of Lao Miao, Miao Nan, the MD of the investment team of Grapefruit Media. This guy was always eager to get into the film and television industry.

No wonder he regarded Song Anli as the leader of his own faction. It turned out that “Mr. Song” thought so.

(End of this chapter)