Why does Alibaba want to reduce its shares in the light of the media?
Editor’s note: This article is from the WeChat public account “Entertainment Observation” (ID: Yiyuguancha), author of the entertainment observation editorial department.
文/达伦糕
Edit / 冒诗阳
As of September 2, the box office of the summer file “Where” has reached an astonishing 4.716 billion, ranking second in the total box office of Chinese movies.
The success of “Where” made the production of the light behind the media become the focus of the industry media; according to calculations, the light media will harvest revenue of 1.065 billion to 1.274 billion.
It seems that due to the expected increase in revenue, major changes have begun in the secondary market.
On the evening of September 2, Light Media announced that the second largest shareholder, Ali Ventures, plans to reduce its shareholding in Light Media by no more than 2% within six months. As the main export product of the summer file “explosion” movie “Where”, the media price of light media continued to rise in July, the current share price is the highest value in the past six months.
This is the first time that Alibaba has invested in the stock market for the first time in more than four years. Affected by this, the stock price of Light Media fell after the opening on September 3, closing at 8.84 yuan / share, down 3.28%.
Alibaba is an important investment entity of Alibaba Group. According to public information, the two major shareholders of Alibaba are Ma Yun (80%) and Xie Shihuang (20%), which means Ali Venture capital is the core investment entity of Ali.
Why does Alibaba want to reduce its shares in the light of the media?
The industry media has given many speculations, and insiders are also divided. There are indications that there is more to do with the game of light in the big game of Tencent vs. Alibaba.The choice was made. The confrontation between the cat’s eye and the Taobao ticket has also become one of the main themes of competition in the Chinese film industry. Under such a background, Ali’s reduction of light stocks seems to be no longer a particularly difficult decision.
Getting closer to Tencent, getting away from Ali: What is the choice of light?
A message on the evening of September 2 caused quite a stir: Light Media suddenly issued a notice saying that 8.78% of the shareholders of Hangzhou Ali Ventures Co., Ltd. The full name of Ali Ventures is planned to reduce the company’s shares by no more than 58.762 million shares in the form of centralized bidding or block trades within six months after the fifteen trading days from the date of disclosure of this announcement.
For this sudden reduction, the public relations reply given by the light is “Do not evaluate this. Shareholder Ali Ventures will decide whether to implement this reduction plan according to the market environment, the company’s stock price and other factors. Subject to the announcement.”
According to public information, Ali Ventures first invested in Light Media in March 2015, investing about 2.4 billion yuan, becoming the second largest shareholder of the latter, with a shareholding ratio of 8.78%. According to Kaixinbao, the two major shareholders of Alibaba are Ma Yun and Xie Shihuang, with shareholdings of 80% and 20% respectively. Ma Yun is the actual controller.
In terms of return on investment, Ali’s subscription price was 24.22 yuan per share. At present, the price of Light Media is less than 9 yuan per share. Ali Ventures has reduced its holdings and the losses are not small.
Why is Ali willing to sell shares that reduce light holdings at a low price? Behind the scenes, the light is gradually approaching Tencent’s choice in the difficult situation between Tencent and Ali, making Ali more and more strategically “discarded”.
The author observed that the practice of reducing light in Ali actually had a foreshadowing in January this year.
Information shows that Ali partner Shao Xiaofeng has retired as a director of light media in January 2019. National Enterprise Information Publicity DepartmentAccording to the data, Shao Xiaofeng has not been in the ranks of directors of Light Media since 2019.
In fact, as early as May 2018, Light Media has issued an announcement stating “the termination of the Strategic Cooperation Framework Agreement signed with Alibaba.”
Shao Xiaofeng is the old minister of Ali, and is now the chief risk officer of Alibaba Group. The name is “Guo Jing”. It is understood that when he was the chairman of the board of directors of Ali Pictures, he joined Light Media in 2015 and served as a director.
After 2015, Ali joined the stock market. The initial cooperation between the two companies was very close. At that time, Shao Xiaofeng, who also served as the chairman of Alibaba Pictures, took the position of director of Light Media and reached 7 strategic cooperation with Ray. Among them, Light Media has the right to invest at least 5% of Alibaba’s five film works each year. Alibaba has the right to invest at least 5% of the company’s five film works each year (or cooperate in the form of entertainment treasure), and Alibaba Pictures co-produces or invests in the issuance and distribution of five (provisional) film works. At the same time, the light and Ali agreed that the light IP derivative business will give priority to cooperation with Ali; the ticketing priority will cooperate with Taobao (later transferred to the Taobao ticket), and in the end, the film-related rights will preferentially cooperate with Ali.
Now, the initial development of the cooperation has not been implemented much, and Ali’s shareholder has become a purely “financial” investor.
Reviewing the history of cooperation between the two parties for more than four years. Since Alibaba invested in the media, the latest cooperation was the film version of “Sansheng Sanshi Shili Peach Blossom” released in the summer of 2017, but lost both at the box office and word of mouth. Afterwards, Alibaba gradually “disturbed” from the light.
A previous collaboration was “Big Fish Sea Bream”, and Ali’s Derivatives Division obtained the IP cooperation right of “Big Fish Sea Bream”, so it joined the business system including Tmall and Taobao, making “Big Fish Sea Bream” The sales of derivatives have once seen the future of Chinese animation derivatives.
Unfortunately, all of this is likely to go into history, because the distance between the light and another giant Tencent has been infinitely close.
Tencent and light allied, Ali created his own “hematopoietic” function
In 2015, Ali became a share of the light, but since 2016, Tencent has also begun to draw light to seek a layout in the film industry.
Tencent first became a shareholder of the company’s assets in 2016. In 2017, Tencent supported Cat Eye’s acquisition of the lithography era and acquired Tencent’s investment of 1 billion yuan. This is the result of the joint production of light and Tencent. Make Cat Eye the biggest competitor of Ali Pictures’ main product, “Paste Ticket”.
According to the latest shareholding information released by Cat Eye, the shareholding ratio of Light and its related parties reached 48.80%, Tencent’s shareholding ratio was 16.27%, and US Mission Review (Shanghai Sanxue Technology) held 8.56% of the company. Equity – There is no doubt that this is the main force in the ticketing field of Tencent.
Time came to March 2018, Light Media voted for Li, and transferred its 27.64% stake in Xinli Media, which has a certain competitive relationship with itself, to Tencent for a price of 3.317 billion yuan, which enabled Tencent to strengthen its strength in the production field; Xinli Media was included in the reading group by Tencent at a price of 15.5 billion yuan.
This action can be seen as a closer hold of Tencent and light on the capital side, from cat’s eye to Xinli. After that, Tencent’s and the light’s tie can’t be shaken.
At the same time, Ali is a little helpless for this kind of movement, and it is a hole in the fire. At the same time that Xinli was sold, the current head of Ali Entertainment, Fan Luyuan, who was also a director of light at the time, was also due to “personal reasons.” “, resigned as a director of Light Media, “will no longer hold any position in the company after resignation.”
After then, we found that the films produced by the light are basically traces of the cat’s eye and Tencent, and it is hard to see Ali’s figure.
Before Ali’s reduction, talk about the reason for the termination of the cooperation between Light Media and Ali. Some analysts pointed out: “Although Ali Films has invested in light media, it has been building its own film industry. Closed-loop, Ali Pictures, with its big data capabilities, has a super-flow portal, and the layout of the film industry chain, including production, distribution, announcement, ticket sales and derivatives sales, has challenged the light media. There will be more and more competition between the media and Ali Pictures. It is foreseeable that the living space of the light media may be squeezed.”
This kind of evaluation is very pertinent. In addition to the closer the light and Tencent, Ali’s own repositioning is also the key.
From the initial establishment in 2014, to the official establishment of the Ali Entertainment System in October 2016, including the business of Ali Pictures, Youku, UC, Ali Music, Ali Literature, Ali Games, Damai.com, and then invest in Wanda. Earth, Bona, Amblin Partners, and finally by the end of 2018, Alibaba Group’s premium increased its shareholding in Alibaba Pictures, and its shareholding increased from 49% to 50.92% – all of which is behind Ali’s huge system of building itself.
In the future strategy of Ali Music Entertainment and Alibaba Pictures “Quality Content + New Infrastructure”, Ali hopes that the producers will play the role of “supplier”, and Ali will provide funding from production to production support to distribution. , a series of support for ticketing and peripheral development. As a result, the light that has a relatively complete system capability and is close to Tencent is more like a competitor.
Of course, it is worth mentioning that Tencent has also formed its own system in the past four years: Tencent Games, Tencent Literature (with Reading Group as the core), Tencent Pictures, Tencent Animation, etc. Tencent video and Tencent music and a series of cultural unicorns invested by Tencent, the cultural and ecological map has been formed – in this, light and cat eyes undoubtedly occupy a very important position.
Finally, we must also emphasize that Ali’s stock of light is not only because of the alliance between Light and Tencent in the big environment and its own growth, but also has financial investment considerations.
Light Because the stock price of “Which” is soaring, it is currently at a relatively high level. After losing its strategic value, as a pure financial investment consideration, this is the time to realize.
On the evening of August 28, Light Media disclosed the 2019 semi-annual report. The semi-annual report showed that in the first half of the year, Light Media achieved operating income of 1.171 billion yuan, a year-on-year increase of 62.37%, but a net profit of 105 million yuan, down 95% year-on-year.
In simple terms, due to the influence of the industry environment, the semi-annual report of light is not ideal. In addition to the serious decline in net profit, the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 68.628 million yuan, a year-on-year decrease of 69.63%. The net cash flow from operating activities was -3.777 billion yuan, a year-on-year decrease. 108.33%.
Although in the second half of the year, you may get about 1.2 billion in revenue due to the box office of “Where”, but whether the stock price will pick up at that time is not known – therefore, at this moment, the stock of light is sold. Financially it may be a wise move.