On August 7, Lehua Entertainment, a well-known artist management company in China, was successfully listed on the Hong Kong Stock Exchange and is about to officially enter the Hong Kong market.

It is reported that Lehua Entertainment is a well-known artist management company with a leading market share in China. Relying on the company's in-depth operation in the entertainment industry chain for many years, Lehua Entertainment has gradually formed three major business matrices with artist management as the core, music IP production and operation and pan-entertainment business coordination, and build a systematic training of trainees and professional artist operation system to build Lehua model, helping the company's business to achieve sustainable growth.

Lehua model builds the basic plate of the company's sound business.

According to the prospectus, Lehua's revenue increased rapidly from 631 million yuan in 2019 to 1.29 billion yuan in 2021, with a compound annual growth rate of about 43 percent, while profits increased from 119 million yuan in 2019 to 335 million yuan in 2021, with a compound annual growth rate of about 67 percent.

Especially in the first four months of 2022, Lehua continued to achieve year-on-year growth, demonstrating the strong resilience of the company's business model. What needs to be understood is that the domestic epidemic repeatedly affected the normal production and life activities in many areas in the first half of 2022, and it is equally difficult for artists to shoot movies and TV dramas, commercial performances, and other activities on time, which is bound to make artists under pressure to generate income. Therefore, being able to maintain steady growth in performance under unfavorable conditions proves that Lehua model can still show excellent market competitiveness under extreme pressure.

Lehua model can cover the whole life cycle of artists'"discovery-cultivation-operation", including trainee selection, artist training, artist operation and artist promotion.

As of April 30, 2022, Lehua has 66 contracted artists (two artists Weibo Corp with more than 30 million followers and more than 20 artists Weibo Corp with more than 2 million followers), 55 of whom are trained by Lehua's trainee program. these contracted artists form the foundation of Lehua's current business; at the same time, Lehua has 71 trainees in the training stage, which will continue to provide Lehua with quality artist resources.

In additionExtensive and diversified industrial resources are also Lehua model.An important basis for success. In 2019-2021, the number of revenue-generating business activities of Lehua increased from 380 to 640, and the number of revenue-generating business activities for the four months ended April 30, 2022 was 235. as a result, it is expected that the number of revenue-generating business activities of the company will continue to grow positively for the whole of 2022.

The above business activities can be divided into endorsements of famous brands at home and abroad, and popular variety shows, movies and dramas. Specifically, Lehua's endorsement clients include many international brands of "Top 100 Global Brands value" released by Forbes in 2020, and domestic brands of "Top 100 most valuable Brands in China" released by China Brand value Research Institute in 2020; media partners cover head Internet platforms such as iQIYI, Inc., Youku, Tencent Video and Mango TV, and Lehua's artists participated in recording this! They are popular variety shows and dramas such as the hip-hop series, the Star Detective and Luoyang in the Wind. At the same time, Lehua has extensive cooperation with major local satellite TV platforms, such as NetEase, Inc Yun and Tencent Music.

The author believes that under the influence of the epidemic, the starting resources of the artist industry as a whole have declined compared with the same period last year, so the business projects that can be started must be more inclined to high-quality artists, which will further test the depth of the industrial resources of the artist management company. and the head artist management company's risk resistance will obviously be relatively stronger.

Generally speaking, the cultural and entertainment industry is a typical content-oriented industry, and artists are an important content creation component of the cultural and entertainment industry. Lehua model has created a full life cycle system for artists to "explore-cultivate-operate", and obtain high-quality artist resources sustainably and stably. Lehua grasps artists, one of the core elements of the entertainment industry, and then allocates industrial resources reasonably around its artists, successfully realizing the sustainable growth of the company.

China's pan-entertainment market will remain high for a long time.

The development of China's pan-entertainment market is faced with three major advantages: 1) after the continuous upgrading of people's material living standards, there is a natural demand for entertainment consumption. Throughout the prosperous areas of entertainment culture in the world, all of them are economically developed areas. 2) the rise of short video, OTT platform and music streaming media platform has accelerated the spread speed and scope of pan-entertainment content, and objectively improved the market scale of the entertainment industry; 3) Chinese consumers are becoming more and more mature and willing to pay for high-quality products, and the realization ability of high-quality content has been significantly improved.

Based on the above three positive factors, Frost Sullivan predicts that the size of China's pan-entertainment market will grow from 700.3 billion yuan in 2021 to 1.3456 trillion yuan in 2026, and there is still room for the development of the industry as a whole.

Summary

To sum up, Lehua model has become the core competitiveness of the company after many years of polishing, making Lehua's growth both strong and resilient. After listing, it is expected that Lehua's capital strength and brand influence will be invited to climb another high-rise building, and is optimistic about the bright future of Lehua's steady growth under the background of the continued prosperity and development of China's pan-entertainment market.