Founded in 2013, Litian film mainly engages in self-made and buyout of TV series broadcasting license. Chinas TV drama market is highly fragmented. According to the prospectus, the company ranks the first among all Chinese TV drama distribution companies with a market share of about 6.9% based on the total number of released TV dramas broadcast in 2019.
In addition, the company is also engaged in the following businesses: selling TV series scripts, acting as the distribution agent of TV series broadcasting rights, and investing in TV series in which the company acts as a non-executive producer.
Previously, frost Sullivan report pointed out that, according to the statistics of earnings earned from the TV drama market in 2019, Litian film ranked 15th among all the TV drama distribution companies in China with a market share of about 0.31%. In addition, according to the total number of TV series released in 2019, among all TV series distribution companies in China, Litian Film Co., Ltd. ranks first with a market share of about 6.9%. According to the number of hours of TV series produced in 2019, among all TV series production and distribution companies in China, Litian film industry ranks sixth with about 0.9% market share.
At present, the company has invested in the production of seven TV plays and acted as the executive producer. TV series such as double guns and Yihai well known to the audience are produced by Litian film.
For the years ended December 31, 2016, 2017 and 2018, and for the six months ended June 30, 2019, a total of 4, 32, 43 and 27 TV series were released. Among them, there are 77 bought-out TV series, the broadcast right of which is granted by the third party copyright owner, including the urban love drama bright star, love you across the sea, criminal investigation drama undercover return , war drama Patriot and comedy a bright day .
Its main customers include TV channels (including satellite TV stations and ground TV stations) and online media platforms. It has signed agreements with more than 90 provincial and municipal channels and online media platforms on the transfer of distribution, self-made and buyout of TV series broadcasting rights. From 2016 to 2018, the five major customers accounted for about 90.8%, 73.6%, 82.3% and 73.3% of the total revenue respectively.
According to the prospectus, the funds raised in this IPO will be mainly used to produce self-made TV series, which are expected to include about seven TV series involving multiple main themes and four online series, buy the copyright of TV series from the third party copyright owner or licensor, and hire experienced professionals for production management, distribution, business development, copyright management, sales and operation Sales and post production management, and provide training for employees.
According to the financial data, from 2016 to 2018, the companys revenue was 73.66 million yuan, 379 million yuan and 386 million yuan respectively, with a compound annual growth rate of 128.9%; the net profit was 20.6 million yuan, 56.8 million yuan and 67.6 million yuan respectively.
There are five major business segments in Litian film industry, the main revenue comes from the purchase of the TV play broadcasting right license, followed by the self-made TV play broadcasting right license, in addition to the sale of script copyright, the provision of distribution agency services, and the broadcasting right license business under the joint financing arrangement.
In terms of the proportion of revenue from 2017 to 2019, home-made TV series and buyout TV series contributed more than 90% of the companys revenue. Among them, buyout of TV plays is the main source of revenue for the company, but the proportion of revenue in 2019 dropped to 71%; while the proportion of revenue from home-made TV plays rose to 23%.
Self made TV series, that is, the TV series produced by the company as the executive producer, reflect the companys independent creative ability. From 2017 to 2019, the business achieved revenue of 13.686 million yuan, 7.031 million yuan and 88.982 million yuan respectively, with a year-on-year decrease of - 48.63% in 2018 and a year-on-year increase of 1165.57% in 2019.
In terms of revenue share and year-on-year growth, in 2019, the companys business layout inclines to self-made TV series, but the companys total revenue mainly depends on buying out the TV series business.
Not a head company
Its competitiveness is in doubt
Among them, from 2016 to the first half of 2019, there were 1, 3, 4 and 4 self-made TV series of Litian film industry, including the well-known Yihai, tiger team and guerrilla hero, which were mostly Anti Japanese and war themes.
Yuan Li, its founder, was vice president of distribution of great wall TV series. Tian Tian Tian, his spouse, was born in the Department of light, and later became a partner of Litian film industry in February 2019.
The data shows that the capital chain of Litian film industry is not ideal, and the net cash flow of operation from 2016 to 2018 is in the outflow state, which are - 5.34 million yuan, - 82.45 million yuan and - 28.57 million yuan respectively, mainly due to a large number of advance issuance but difficult to effectively collect. The prospectus shows that the companys main customers are second-line and third-line satellite TV, including Anhui Satellite TV, Tianjin satellite TV, etc. under the circumstances of the depression in the film and television industry, although the issuance of such satellite TV is relatively easy, it is very difficult to collect money.
From 2016 to the first half of 2019, the companys accounts receivable and notes receivable were RMB 50 million, RMB 194 million, RMB 376 million and RMB 517 million, respectively, with a year-on-year growth of 284.8%, 93.9% and 37.4%; in 2016, the average turnover days of the accounts receivable of Litian film industry were only 159.6 days, which was extended to 420.2 days in the first half of 2019, with a significant reduction in the collection capacity.
Under the condition of tight liquidity, the financing cost of the company has gone all the way up. The financing cost in 2016-2018 is RMB 1.46 million, RMB 5.01 million and RMB 10.12 million respectively. In addition, Litian film is not the head company in the industry, and its competitiveness is questionable. At present, the first mock exam is the main source of revenue. In this mode, the company has paid a high cost of sales. In 2016 -2018, the cost of buying the right to broadcast the TV series has gone up, which is 7 million 110 thousand, 126 million yuan, 149 million yuan, accounting for 17.8%, 41.6%, 52% of the total selling cost, and therefore the gross profit margin has dropped significantly, in 2016, 2017 and 2018. The gross profit margin of this business model is 48%, 19.5% and 25.1% respectively. Based on the revenue earned from the TV drama market in 2018, Litian film ranked 16th with a market share of 0.34%. Read the annual report of Zhongtai Motor Co., Ltd. in which more than 10 financial institutions were involved: net profit loss of 11.19 billion yuan in 2019. Source: responsible editor of China Fund News: Zhong Qiming_ NF5619
Under the condition of tight liquidity, the financing cost of the company has gone all the way up. The financing cost in 2016-2018 is RMB 1.46 million, RMB 5.01 million and RMB 10.12 million respectively.
In addition, Litian film is not the head company in the industry, and its competitiveness is questionable. At present, the first mock exam is the main source of revenue. In this mode, the company has paid a high cost of sales. In 2016 -2018, the cost of buying the right to broadcast the TV series has gone up, which is 7 million 110 thousand, 126 million yuan, 149 million yuan, accounting for 17.8%, 41.6%, 52% of the total selling cost, and therefore the gross profit margin has dropped significantly, in 2016, 2017 and 2018. The gross profit margin of this business model is 48%, 19.5% and 25.1% respectively. Based on the revenue earned from the TV drama market in 2018, Litian film ranked 16th with a market share of 0.34%.