The reputation of Buffett’s lunch is falling apart in the hands of his “Chinese disciple”.
Editor’s note: This article is from WeChat public account “科创财经汇“, author Yang Yang, editor Zhou Wei.
The reputation of Buffett’s lunch is falling in the hands of his “Chinese disciple”.
On August 1 this year, Tenjin Entertainment issued an announcement that it received a Notice of Investigation from the China Securities Regulatory Commission for alleged violations of information disclosure. Zhu Xi’s personal was issued a warning letter by the Dalian Securities Regulatory Bureau due to “six sins” such as capital occupation and related transactions.
Before this, Tenjin Entertainment has become one of the “most lose money” companies on the A-share market. According to the performance revision announcement in January this year, Tianshen Entertainment achieved a huge loss of 7.8 billion yuan in FY 2018.
Zhu Xi and his gods entertainment may not be known to most people, but taking the Buffett lunch in 2015 is a highlight of his business.
The Buffett lunch four years ago was taken by Zhu Xi for $234.5678 million (about 15 million yuan at that time). For a time, Zhu Xi became the target of various media, and he was also the director of different entrepreneurial programs. He was also known as the “Buffett disciple.”
The latest Chinese businessman who was famous for taking the Buffett lunch was Sun Yuchen. The wave of TRON, which he founded, was controversial and even plunged him into a “side control” cloud. However, this does not prevent Sun Yuchen from making Buffett’s lunch worth $4.56 million in 2019.
Buffett may have never dreamed that his charity dinner has become a speculative chip in the hands of merchants across the ocean.
Tianjin Entertainment Capital Bureau
In 2010, the gods and gods established by Zhu Xi started to make a page tour. In the second year of the backdoor listing, Zhu Xi won the opportunity to have lunch with Buffett.
Zhu Xi saidBefore eating with Buffett, I didn’t even think about what to say. “I really have nothing to ask, and I have not thought about the question to ask.” After all, he and Buffett, there is really no common topic to think about it. The game, the film industry and the value-added investment of Buffett, naturally, are irrelevant.
So, this meal, everyone is basically chatting and telling jokes. Zhu Xi also sent two bottles of Chinese red wine from Buffett.
In the dinner, Zhu Xi said to Buffett: “I am doing business well, and stocks are not good.”
Buffett’s response was: “I don’t trade stocks either.”
Buffett may be telling the truth, but Zhu Xi, who is “not doing stocks,” was a full-fledged capital hunter.
Tianjin Interactive caught up with the outbreak of the page tour and launched “Aojian”, which stood in the game industry. In 2012, Tenjin Interactive sold 10% of its equity to Light Media at a price of 100 million yuan.
After more than a year, through the Dongfeng of the concept of online games, Tianshen Interactive did not hesitate to choose to transfer 100% of the shares to the A-share listed company, the name of the company, listed on the backdoor, and later Renamed Tenjin Entertainment. At the time of the listing, Tianshen Entertainment, with a valuation of 2.45 billion yuan, more than doubled the value of the 1 billion yuan invested by Light Media, and the shares held by Light Media also rose nearly 16 times.
Zhu Xi saw the sweetness of capital operation.
“Aojian” is the main product and profit source of Tianshen Interactive. However, by 2013, the growth rate of Tianshen Interactive’s revenue and net profit has been declining year by year. In order to fulfill the performance commitment, after the listing, Tianshen Entertainment began a trip to M&A.
Zhu Xi’s most promising short-term investment occurred four months after Buffett’s meal. He spent 1.323 billion yuan to buy a 49% stake in Confucian Film. Confucianism and film industry is the producer of the hot works such as “Pretender”, “The List” and “To Youth”. After 9 months, the market value of the Confucian and Italian film industry reached 3.3 billion yuan, and Tianshen Entertainment sold the entire equity, net profit of 300 million.
Zhu Xi’s interest in the film and television entertainment industry may have been stimulated. In April 2016, Tenjin Entertainment led the C round of 400 million yuan financing in the era of microfilm. After the merger of the cat’s eye and the lithography era, Tenjin Entertainment became one of the shareholders of Cat’s Eye through indirect participation.
At the end of 2016, Tenjin Entertainment acquired a 15% stake in Gongfu Films for RMB 270 million. In 2017, Tenjin Entertainment acquired a 32% stake in Yanle Films.
Zhu Xi’s investment vision seems to have been verified. In the process of mergers and acquisitions, the game rights of the big IP games such as “The List”, “The Night”, “Wudong Qiankun”, etc., were also taken into the hands by Tianshen Entertainment; the IP of “Yin” was also discovered in the hands of Tenjin Entertainment. After launching the online drama, it harvested 4 billion hits.
The field of mergers and acquisitions of Tenjin Entertainment is not limited to the film and television industry. In the game field, Yihua Technology, Jiaxing Music, Fantasy Yueyou, and Herun Media in the field of brand marketing have also been included in it.
In 5 years, Tenjin Entertainment completed 12 mergers and acquisitions, including games, film and television entertainment, Internet advertising, brand marketing and other subdivisions.
In Zhu Xi’s ambition, it seems to be a pan-entertainment map that includes content, distribution, and channels. In order to complete these acquisitions, Tenjin Entertainment invested more than 11 billion yuan. Among them, when the acquisition of Jiaxing music, the premium exceeded 200 times.
The performance of Tenjin Entertainment is also supported by “buy and buy”. In 2017, according to the financial report of Tenjin Entertainment, Fantasy Yueyou revenue reached 833 million yuan, Jiaxing music play revenue reached 520 million yuan, and Herun Media revenue reached 267 million yuan. The revenue of these acquired subsidiaries constitutes the main support for the Tianshen entertainment performance table.
However, these high-priced M&A subsidiaries did not complete the expected results after they were included in the Tenjin Entertainment Group, resulting in a large impairment of the reputation of Tenjin Entertainment.
In 2018, the game version was frozen, and the entire game sector was caught in the cold winter. The business of the gaming subsidiary of Tenjin Entertainment has almost fallen into stagnation. Among them, Yihua Technology, which plays the Texas Hold’em game, announced the suspension of the game in September 2018 after the national rectification of chess and card games.
On the eve of the suspension of Huahua Technology, Zhu Xi issued a letter of resignation and “rethinking” himself: “The prejudging of the industry market and capital market volatility is not enough.” September 19 On the day, he announced his resignation as the chairman and general manager of Tenjin Entertainment.
Before May 2018, Tenjin Entertainment announced that it had received the investigation notice from the CSRC. The China Securities Regulatory Commission decided to investigate Zhu Xi for suspected violation of securities laws and regulations. But the specific reasons have not been announced so far.
After Zhu Xi’s departure, the Pandora’s Box behind Tianyou’s “Buy and Buy” will open. On September 25, 2018, Tenjin Entertainment disclosed that the company had a bank loan of 135 million overdue.
In January of this year, Tenjin Entertainment released its 2018 performance forecast, saying that the estimated loss of assets was 7.3 billion to 7.8 billion yuan. Among them, it is only estimated that the provision for impairment of goodwill will reach 4.9 billion yuan.
On the evening of August 1, Tenjin Entertainment issued an announcement. Due to information disclosure violations, the company was investigated by the China Securities Regulatory Commission; due to the existence of funds, unsuccessful procedures for related party transactions, partial expense accounting and disclosure, etc. One question, Zhu Xi, the largest shareholder of Tenjin Entertainment, was issued a warning letter by the Dalian Securities Regulatory Bureau.
And the real assets are damaged, maybe not Zhu Xi himself. According to media reports, as early as 2015, Zhu Xi reduced his holdings of about 970,000 shares, with a successful cash package of about 86 million yuan. Since then, most of the shares in Zhu Xi’s hands have been pledged. Currently, it has successfully cashed in 98% of its assets.
China’s “Routine” by Buffett
Before Zhu Xi sent domestic red wine, Buffett has received a gift from China.
As early as 2009, Zhao Danyang gave Buffett Guizhou Moutai and Dong’e Ejiao at lunchtime. By the way, Dong’e Ejiao announced on July 14 this year that the first half of this year’s performance has fallen by more than 70%. As a result, the market value will evaporate 3.9 billion yuan in the next two trading days.
For the lunch, Zhao Danyang paid $2.11 million. It is said that during the year of the recession, Buffett’s charity foundation pool had a deficit of $17 million. Zhao Danyang’s generosity has solved the foundation’s urgent needs. The founder of the fund also described him as “timely rain”.
Zhao Danyang entered the domestic securities industry in 1996 and subsequently joined Guotai Junan to manage the assets entrusted by clients. In 2002, Zhao Danyang organized the “Red Heart of China Growth Investment Fund” and was known as the “Godfather of China Private Equity Fund”.
In January 2008, the year before the lunch, when the stock market was the craziest, Zhao Danyang liquidated its funds.
Therefore, when the two fund veterans met, the scene was exceptionally harmonious. According to Sina Finance, after meeting with Zhao Danyang, Buffett’s first sentence was: “How is your income this year?” Zhao Danyang said: “This year’s revenue is 47%.” Buffett said: “You are stronger than me.” Then, Take out your wallet and let Zhao Danyang help him make money.
Zhao Danyang also made careful preparations for this lunch. In addition to the gift, Zhao Danyang also brought more than a dozen “Snowball: Buffett and his wealth life”, please Buffett sign the book. Simultaneously