Li Chun said frankly that it is impossible to say that management has no single responsibility.
Editor’s note: This article is from WeChat public account “Every video” (ID: Meijingyingshi), author Wen Menghua Xu love, editor Du Yi.
In this year’s A-share frequent thunder, the Tianshen Entertainment (002354, SZ) was seriously concerned about the capital market because of losses.
Now, in addition to the difficulties in performance, Tenjin Entertainment shareholders also appeared “guilty”, on the evening of August 15, Tianshen Entertainment announced a contradiction between some small and medium shareholders and the existing management of the listed company. These small and medium-sized shareholders demanded the replacement of existing directors and supervisors, and the “forced palace” bridge segment shocked the capital market.
On August 16, Li Chun, director and vice president of Tenjin Entertainment, held a press conference on behalf of his personal identity and the position of the first major shareholder, Zhu Xi. Li Chun said, “Shareholders are very hurting investors. We try to communicate. , but the communication failed.”
Every time the reporter noticed that after the recall, on the evening of August 16, Tianshen Entertainment announced that the chairman and general manager Yang Lan had resigned for personal reasons. On August 18th, Zhu Xi, a major shareholder of Tenjin Entertainment, and Li Chun, a director of Tenjin Entertainment, responded to the shareholder guilt and related issues of the company through an official public letter. Zhu Xi said in an open letter: “I was wrong. I chose the path of development through outreach mergers, rather than doing endogenous development and finding real barriers and moats.”
Multiple acquisitions, the game of Tianshen Entertainment and the outreach of film and television were once flourishing. According to the incomplete statistics of the reporters, from 2015 to 2017, Tianshen Entertainment acquired 15 companies in 3 years. However, on the road of rapid expansion, it has also quietly buried hidden dangers. Due to the continuous changes in the game industry and the film and television industry in the past two years, the performance of Tenjin Entertainment has also been hit hard. According to public information, the market value of Tenjin Entertainment is about 35 billion yuan, and the stock price is more than 120 yuan per share. As of August 19, the market value of Tianshen Entertainment is 2.94 billion yuan, and the closing price is 3.15 yuan.
For the first major shareholder of Tenjin Entertainment, Zhu Xi, and the director and vice president Li Chun’s response to the “removal” incident, each reporter repeatedly tried to contact three small and medium shareholders, but as of press time, it failed to obtain Contact, have not received the other party’s reply.
Tianjin Entertainment Director responded to “Remove”:Rescued for a long time, refused to communicate, and was not good
Zhu Xi, the major shareholder of Tenjin Entertainment, said in his latest open letter on the 18th that “the sudden black manuscript and all kinds of jealousy made me feel the first time in the world.” For all kinds of doubts, Zhu Xi responded: ” Since the listing of Tenjin Entertainment, have I ever reduced my holdings in high positions, have you made any profit by reducing stocks? For the company’s stock price, I have increased the lock-up period again and again. You don’t know what’s in your heart? The chairman who has not sold is very interesting.”
Zhu Xi said in an open letter: “Save the gods can only rely on inward seeking, the so-called ‘external resources’ are all tricks that you deceive. The Yang Lan team is recommended by you, and the funds you promised to live? Now, once again, the same tricks are made, and others are willing to believe!”
This open letter means that the contradiction between the management of Tianshen Entertainment and the small and medium shareholders has intensified again. Earlier, the two sides had already played a round through the announcement and the public press conference.
On the evening of August 15, Tianshen Entertainment announced that the company’s board of directors today received a notice from the three shareholders on the request of the board of directors of Dalian Tenjin Entertainment Co., Ltd. to hold the 4th Extraordinary General Meeting of 2019. The shareholders are NEWEST WISE LIMITED for New Co., Ltd., Yihe Yinfeng (Tianjin) Investment Management Co., Ltd. and Shanghai Chengzi Investment Center (Limited Partnership). The above shareholders hold a total of 105 million shares of Tianshen Entertainment for more than 90 consecutive days. 11.22% of the total share capital.
In the proposal put forward by the three shareholders, the directors Yang Lan, Shi Botao, Yin Chunfen, Lin Shuyong, Li Chun, and Shen Xuelian did not fulfill the above-mentioned statutory loyalty obligations and diligence obligations, resulting in the company’s operating conditions continued to deteriorate, the company Governance chaos is out of control, and huge performance losses occur. The proposer proposed to the company’s board of directors to hold the 4th Extraordinary General Meeting of Shareholders in 2019, and proposed to elect the non-independent directors of the fifth board of directors of the company, and nominated Liu Yuping, Zhao Zhao, Tian Hongdong, Shen Zhonghua, Li Chun and Zhang Zhe as the fifth board of directors of the company. Candidate for non-independent director.
Image Source: Tenjin Entertainment Official Website
Regarding the approval of the three shareholders’ nomination proposal, it will be reserved for the final vote of the EGM. However, from the list of announcements, these small and medium shareholders want to replace almost all directors and supervisors of Tenjin Entertainment. So why is the management suddenly being “dismissed”?
“Regarding the announcement last night, everyone is definitely interested. In fact, there are many cases in the A-share market, but I did not expect it to happen to us. It is very cruel and very realistic. On the afternoon of August 16, Li Chun said at the media briefing held by Tianshen Entertainment.
Li Chun said: “From last night to this morning, our existing management team basically stayed in sleep, and shareholders and creditors kept asking us to state reasons, including regulators.”
For this recall, Li Chun summed up 12 words: “Long-term planning, refusal to communicate, and bad intentions.” In his view, I hope that the small and medium shareholders will be able to clarify the status quo of the Tenjin Entertainment and the way to resolve the risk of the gods entertainment. Rather than protecting the interests of some shareholders, it hurts the interests of all shareholders, and the interests of creditors must be maintained.
About the three shareholders’ doubts about the current management, Li Chun asked at the briefing session: “The first is to remove the real intention. The individual minority shareholders propose to remove the board of directors, which represents the interests of all shareholders, or only reflects The interests of individual nominees are to stimulate the sentiment of retail investors, or do they want to solve the problem of the current debt of Tianshen Entertainment? Secondly, why is it so extreme? Suddenly issued an announcement to remove the directors, and the management did not know anything about it. The question that could have been answered at a desk, why do you have to fight at the door?”
Behind the shareholder’s “guilty”,Tianjin Entertainment’s performance continues to lose
In combination with the information obtained by the current reporters from the press conference and related announcements, the specific reasons for the “guilty” of Tianshen Entertainment’s shareholders have not been disclosed, but the analysis believes that this is related to the performance of Tianshen Entertainment’s losses.
Tianjin Entertainment’s 2018 annual report shows that due to the provision of 4.09 billion goodwill impairment, the net profit was a huge loss of 7.15 billion yuan, down 803.52% year-on-year. It can be seen from the recent earnings report of Tenjin Entertainment that half a year has passed and the performance of Tenjin Entertainment is still not optimistic. According to the announcement in early July, Tianshen Entertainment 2019 semi-annual performance pre-loss of 230 million yuan -130 million yuan, mainly due to insufficient profitability of the original game products, new game products did not go online as scheduled, resulting in some subsidiaries’ operating results did not meet expectations.
Image Source: Tenjin Entertainment Official Website
“In 2018, many of our investment targets showed asset impairment and a sharp decline in profits, which is basically the core reason for the decline in the profit of Tenjin in 2018.” Li Chun said.Because the main game and film business of Tenjin Entertainment experienced huge industry fluctuations, it has led to many risks at this stage.
Li Chun described the triple storm. The first is from the control and tightening of the game industry by national regulators. Beginning in May 2018, China’s game industry entered a very high peak, and at the same time led to the complex environment of the whole game, especially the indulging game of primary and middle school students, which directly caused the attitude of the regulators to change from the previous unlimited supply to the game. Regulatory supply, the game version number approval is relatively strict. The second heavy wave comes from board games. As the use of chess game gambling was rectified by the regulatory authorities, the company took the initiative to remove the Texas Hold’em-related games, resulting in the acquisition of the target of the flower and pocket technology business performance was affected. The third heavy wave comes from taxation incidents in the film and television industry.
Image Source: Photograph Network
But Li Chun said frankly that it is impossible to say that management does not have a little responsibility. “Management must bear the responsibility that should be borne,” he said. At present, Tenjin Entertainment has great debt difficulties, but the company is actively resolving debt risks. “We are willing to pick the hardest way to resolve the risk with the creditors, and we take the responsibility of the commitment.” Li Chun also said that the company is not confused, despite the loss, but the subsidiary is still providing profits, “immediately issued half a year You will also see it.”
Li Chun said in an open letter that “the curse of the gods reflects the ills of listed company governance, shareholder checks and balances, corporate development paths, etc. In terms of goodness, after this “toss”, I am more convinced. Tianshen Entertainment does have its core value. Otherwise, what can be “robbed”? Many excellent subsidiaries in the industry and investment targets led by the film and television industry, and the bottoming of hundreds of millions of operating profits is indeed the home of Tianshen Entertainment.
In the face of the “Daily Entertainment’s next development plan and planning”, Li Chun responded to every reporter: “This conference was initiated by me personally. I may not be able to answer the development plan of the listed company very comprehensively. And it involves the approval of the letter. But I believe that the existing management and directors will never let the gods continue to decline.”
For the small and medium shareholders, the most concerned is the result of this recall. Li Chun said that he will continue to talk with small and medium shareholders and adhere to an open attitude.
Credit rating down,Interest-bearing debt exceeds $3 billion
In addition to shareholder guilt, the debt problem of Tenjin Entertainment is also a major problem that the company needs to focus on.
Li Chun said that Tianshen currently has large debt difficulties, and interest-bearing debts are more than 30 billion yuan, including financial, corporate bonds, and debt recovery caused by M&A funds. Li Chun said that at present, Tenjin Entertainment has been actively resolving this debt risk and is able to communicate with all creditors in a friendly manner to achieve the direction of debt disposal. Including the CSRC is also actively communicating, the debt formed by a market company is best resolved through the market.
“Some people will think that bankruptcy reorganization is definitely the easiest. But we are willing to pick the hardest way to resolve the risk with the creditors and take the responsibility we should bear.” Li Chun said.
But it is not easy to solve this problem. Some industry analysts have analyzed to every reporter that the debt problem of Tenjin Entertainment may be a major reason for the “guilt” of shareholders.
Every time the reporter noticed that on June 24 this year, CSI Pengyuan Credit Rating Co., Ltd. (hereinafter referred to as “Zhongyuan Pengyuan”) released the 2019 annual tracking rating report of Tenjin Entertainment, which decided to extend the long-term credit of Tianshen Entertainment. The rating is lowered to BB, the rating outlook remains negative, and the “17 Tianshen 01” credit rating is lowered to BB.
Image Source: Photograph Network
The rating report said that the main reason for the downgrade of the Tenjin Entertainment rating is that the company’s overdue debts are large, interest-bearing debts have increased substantially, and short-term liquidity pressures have increased sharply. In 2018, the company’s huge losses will continue, and the profitability of its main business will remain in the future. The company has been involved in a large number of lawsuits (arbitration) cases. Some subsidiaries’ equity, bank accounts and securities accounts have been frozen, which seriously affects the company’s ability to refinance. In 2018, the company’s assets have been greatly reduced, and assets are still using goodwill and long-term equity investment. Mainly due to receivables and poor liquidity, the company has no controlling shareholders and actual controllers, and the number of management and staff members has changed significantly.
At that time, Tenjin Entertainment said that this credit rating reduction will not have a negative impact on the company’s solvency, and given four measures including improving the profitability of the main business, repaying part of the debt through operating income, and intending to sell it. Part of the asset financing part of the debt repayment funds and creditors who have some intentions of converting shares or debt restructuring, and professional institutions and creditors to discuss debt-for-equity swaps and debt restructuring plans.
Complete 15 companies in 3 years,M&A amount is nearly 13 billion yuan
“I was wrong. I chose the path through the development of outbound mergers and acquisitions,Instead of doing endogenous development, find real barriers and moats. For companies, growth is important, but growth based on barriers and moats is the most important. I understand now, and I believe that it is not too late. I will do my best to take responsibility and spare no effort to save the gods entertainment. “On August 18th, Zhu Xi, the largest shareholder of Tenjin Entertainment, said in an open letter issued by the company’s official WeChat public account.
For the once glorious Tianshen entertainment, frequent mergers and acquisitions are indeed a fact that cannot be ignored. In 2014, Tianshen Entertainment, which was established in 2009, was listed on the backdoor and began a large-scale merger.
According to the incomplete statistics of reporters, from 2015 to 2017, Tianshen Entertainment acquired 15 companies through the company itself, its subsidiary Tianshen Interactive and Tianshen Entertainment to establish a merger and acquisition fund, and the amount of mergers and acquisitions was as high as RMB12.7 billion. The types of companies acquired are mainly in the four major areas of games, film and television, advertising, and mobile applications. Among the 15 mergers and acquisitions, the cash payment was 5.66 billion yuan and the share payment was 7.061 billion yuan.
Investing more than 10 billion yuan in M&A funds, leveraging the industry opportunity and capital support, in the past two years, Tianshen Entertainment has undoubtedly ushered in a high-light moment, with a market value of 35 billion yuan. “Tianjin Entertainment’s revenue in 2017 exceeded RMB 3 billion and net profit of RMB 1 billion. At the time, it was in the top six of A-share game companies.” At the media briefing, Li Chun, director and vice president of Tenjin Entertainment, recalled.
But the development of outbound M&A is like a double-edged sword. Behind the rising market value, it also buryes billions of dollars in goodwill. In 2018, Tenjin Entertainment handed over a “transcript” with a loss of more than 7 billion yuan in the annual report. From the reasons given in the annual report, it is not difficult to see that in the company’s 2018 performance losses, the impairment of goodwill caused by the deterioration of the performance of the M&A target accounted for a large part, and the provision for goodwill impairment of 2018 was about 4.059 billion yuan.
Tianjin Entertainment Announcement
Every time the reporter noticed that in the above-mentioned 15 mergers and acquisitions of Tenjin Entertainment, he did not escape the situation that “performance is not completed” and “performance changed face”. Herun Media and Fantasy Yueyou failed to meet their performance commitments in 2018, and Leishang Technology has completed three years of accumulation.The performance of 400 million yuan promised, but the net profit of the company in the first half of 2018 was only 17.79 million yuan.
“The huge loss of Tenjin Entertainment last year did have a tendency to make a big move. But since the development of Tenjin Entertainment, the experience of the past has actually mapped the history of the complete development of China’s entire pan-entertainment industry, starting from the page tour, to the end of the tour, To the film and television linkage, and to the entire round of the high value of the game and film industry, Tianshen Entertainment has completely experienced.” Li Chun explained.
In fact, starting from the second half of 2018, whether it is the “film and television tax” caused by the major adjustment of the film industry, or the game industry’s major adjustment, the “cold winter” brought by the contraction of the number, to some extent, in 2014 The cultural media industry, which has made a big push into the tide of mergers and acquisitions, has brought about an impact. The film and video game companies that have led to the light asset attributes have become the “leifield” of goodwill.
As of August this year, the main reason for the loss of most game companies is the impairment of goodwill. According to the gamma data report, in 2018, affected by the relevant policies of goodwill, among the enterprises with more than 30% of the game business, more than 40% of the goodwill of the enterprise was impaired, and the impairment of goodwill exceeded 20 billion yuan.