On July 23, Huayi Brothers Media Co., Ltd. (stock abbreviation: Huayi Brothers; Stock Code:300027. SZ) announced that it intends to transfer 70% of the equity of its holding subsidiary, Zhejiang Dongyang Meila Media Co., Ltd. (hereinafter referred to as Dongyang Meila), to Beijing Alibaba Pictures Culture Co., Ltd. (hereinafter referred to as Alibaba Pictures) to offset the 350 million yuan loan to Alibaba Pictures.
In 2015, Huayi Brothers acquired 70% of the equity of Dongyang Mera from Feng Xiaogang and others at a consideration of 1.05 billion yuan, forming a goodwill of 1.047 billion yuan, and the holder of the remaining 30% equity of Dongyang Mera was Feng Xiaogang. Today, 70% of Dongyang Mera's equity is only 350 million yuan.
Source: Photo.com
Transfer of equity interest in Dongyang Mera to offset a loan of 350 million yuan
On July 23, Huayi Brothers issued the "Announcement on the Transfer of Equity of Holding Subsidiaries and Related Party Transactions", stating that the company intends to sign an agreement with Alibaba Pictures for actual business needs, and is expected to transfer 70% of Dongyang Meila's equity to it. After the completion of this transfer, Huayi Brothers no longer holds the equity of Dongyang Mera.
Since Hangzhou Ali Venture Capital Co., Ltd. (hereinafter referred to as "Alibaba Venture Capital") and Jack Ma are acting in concert and hold more than 5% of the shares of Huayi Brothers in total, and Alibaba Pictures is a related party of Alibaba Venture Capital, this transaction constitutes a connected transaction.
Dongyang Mera was established in September 2015, and before this transaction, Huayi Brothers and Feng Xiaogang held 70% and 30% of the shares of Dongyang Mera respectively. In 2023, Dongyang Mera will achieve an operating income of 124 million yuan and a consolidated net profit of 37.6042 million yuan, and from January to May 2024, Dongyang Mera will achieve an operating income of 675,500 yuan and a consolidated net profit of 1.6273 million yuan. As of the end of May 2024, Dongyang Mera's consolidated net assets were 260 million yuan.
According to the announcement, the total equity transfer price of the target is 350 million yuan, which is used to offset Huayi Brothers' 350 million yuan loan to Alibaba Pictures, which occurred five years ago.
In January 2019, Huayi Brothers announced that the company and Alibaba Pictures planned to sign a "Strategic Cooperation Framework Agreement", agreeing to cooperate in the company's main control of film and television projects, artist development, derivatives development, marketing services and other fields; At the same time, for the needs of the company's actual operation, Alibaba Pictures plans to provide Huayi Brothers with a loan of 700 million yuan with a loan period of five years.
Huayi Brothers intends to provide pledge guarantee for the 70% equity interest in Dongyang Mera and the right to benefit from the partnership share of Shanghai Yunfeng Xincheng Investment Center (Limited Partnership) (hereinafter referred to as "Yunfeng Xincheng") enjoyed by Huayi Brothers Mutual Entertainment (Tianjin) Investment Co., Ltd. (hereinafter referred to as Huayi Mutual Entertainment), a wholly-owned subsidiary of Huayi Brothers Mutual Entertainment (Tianjin) Investment Co., Ltd.; Huayi Brothers Film Co., Ltd., a wholly-owned subsidiary of Huayi Brothers, and related natural persons Wang Zhongjun, Liu Xiaomei, Wang Zhonglei and Wang Xiaorong intend to provide joint and several liability guarantees for the above-mentioned loans.
Among them, Wang Zhongjun is the actual controller and chairman of Huayi Brothers, Liu Xiaomei is the director of Huayi Brothers and Wang Zhongjun's spouse, Wang Zhonglei is the actual controller, vice chairman and general manager of Huayi Brothers, and Wang Xiaorong is Wang Zhonglei's spouse.
Subsequently, Huayi Brothers issued an announcement stating that for the above-mentioned related party loans, the company intends to provide supplementary mortgage guarantee with three sets of its own real estate, and Huayi Mutual Entertainment intends to provide supplementary mortgage guarantee with one set of its own real estate held.
In January 2020, Huayi Brothers announced that after negotiation between the company and Alibaba Pictures, it planned to change part of the guarantee provided by the above-mentioned related party loans, cancel the pledge guarantee for the right to benefit from Yunfeng's new partnership share enjoyed by Huayi Mutual Entertainment, and change it to provide mortgage guarantee for its own real estate and state-owned land use rights held by Beijing Huayi Brothers Jiali Culture Development Co., Ltd. (hereinafter referred to as Jiali Culture).
In November 2023, Huayi Brothers announced that its wholly-owned subsidiary, Beijing Huayi Brothers Entertainment Investment Co., Ltd. (hereinafter referred to as Huayi Entertainment Investment), intends to sign an agreement with Zoomlion Shengshi Culture (Beijing) Co., Ltd. (hereinafter referred to as Zoomlion Shengshi) to transfer to it 100% of the equity of Jiali Culture held by Huayi Entertainment Investment and all the claims of Huayi Entertainment Investment to Jiali Culture of 130 million yuan to offset the loan to Alibaba Pictures. The transfer price for the transfer of equity and debt rights totaled 350 million yuan, offsetting the loan to Alibaba Pictures of 350 million yuan. The actual controller of Zoomlion is Alibaba Pictures Group Co., Ltd., which is under the same actual control as Alibaba Pictures.
The investment of 1.05 billion yuan ended dismally
Dongyang Meila was originally a company controlled by director Feng Xiaogang. In November 2015, Huayi Brothers issued the "Announcement on Investment Holding of Zhejiang Dongyang Meila Media Co., Ltd.", stating that it planned to acquire 70% of the equity of Dongyang Meila at an equity transfer price of 1.05 billion yuan. As of the date of the announcement, Dongyang Mera's total unaudited assets were 13,600 yuan, total liabilities were 19,100 yuan, and the owner's equity was -5,500 yuan. The original book value of goodwill formed by the transaction was 1.047 billion yuan.
Prior to the transaction, Feng Xiaogang held 99% of the equity of Dongyang Mera, and Lu Guoqiang held 1% of the equity of Dongyang Mera; After the transaction, Huayi Brothers and Feng Xiaogang held 70% and 30% of the shares of Dongyang Mera respectively.
The performance commitment period made by Feng Xiaogang and Lu Guoqiang, the old shareholders of Dongyang Mera, is 5 years, of which the performance target promised in 2016 is that from the date of completion of Dongyang Mera's equity transfer to December 31, 2016, the audited net profit after tax shall not be less than 100 million yuan; Since FY2017, we have set a target of 15% increase in net profit from the previous fiscal year's net profit target.
According to the announcement, during the 2016 annual performance commitment period (from the date of completion of the equity transfer to December 31, 2016), Dongyang Mera achieved a net profit of 101.5284 million yuan after tax, completing the performance commitment.
At that time, Huayi Brothers said that Dongyang Meila's business development was good, participating in many variety shows, signing a number of service contracts, and obtaining relevant income; The film project "Fanghua" directed by Feng Xiaogang is also being actively promoted; At the same time, Dongyang Mera has formulated a new director plan, cultivated a new generation of directors, signed some artist management contracts, obtained relevant income, and has good prospects for diversified development.
In December 2017, the film "Fanghua" directed by Feng Xiaogang was released, and the box office was about 1.2 billion yuan by the end of 2017. In 2017, Dongyang Mera achieved an operating income of 230.8767 million yuan, a net profit of 116.9995 million yuan, and a performance commitment of no less than 115 million yuan.
However, the good times did not last long, and in 2018, Dongyang Mera only achieved an operating income of 140.4721 million yuan and a net profit of 65.015 million yuan, which was far lower than the promised performance target of 132.25 million yuan, and the performance commitment was not completed. In the 2018 annual report, Huayi Brothers made a goodwill impairment provision of 302 million yuan for Dongyang Mera Asset Group.
In 2019, Dongyang Mera achieved an operating income of 270.5196 million yuan, a net profit of 164.2712 million yuan, and completed its current performance commitment target of 152.0875 million yuan. However, in the 2019 annual report, Huayi Brothers once again made a goodwill impairment provision of 360 million yuan for Dongyang Meila Asset Group.
Huayi Brothers said that in the face of severe market tests, the market performance of films produced by Dongyang Mera in 2019 has declined compared with previous years, and the team will consider adjusting the direction of creation in the coming period. Considering the great uncertainty in the market and the impact of industry market fluctuations on Dongyang Mera's operating results in the coming years, after evaluation, further provision for impairment of the asset group was made.
In 2020, Dongyang Mera achieved a net profit of 5.5238 million yuan, the unfulfilled performance target of 174.9006 million yuan, and Huayi Brothers made a goodwill impairment provision of 186 million yuan for Dongyang Mera asset group.
From 2021 to 2023, Huayi Brothers made goodwill impairment provisions of 31.7097 million yuan, 87.3837 million yuan and 0 yuan respectively for Dongyang Mera Asset Group, and as of the end of 2023, Dongyang Mera Asset Group had accumulated goodwill impairment provisions of 967 million yuan. Now, Huayi Brothers sold its stake in Dongyang Mera for 350 million yuan, and its investment of 1.05 billion yuan finally ended dismally.
![Immigrant United States, forcing beautiful women to dance, critically ill Xu Fan gave up treatment? 66-year-old Feng Xiaogang overturned"[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)