招股书显示，授出音乐版权及录制是公司的主要业务且公司大部分收益来自音乐作品授权。授出音乐版权及录制方面，公司有一个多元化及不断增长的音乐库，包括自制及购入音乐作品。公司将音乐作品分为单曲、数码及实体专辑、视频及精选目录，并将其授权予(i)数字流媒体平台、(ii)专辑制作公司、(iii)市场营销及广告公司及(iv)其他娱乐公司，如电影制作公司。作为回报，公司根据(i)固定最低保证款项;(ii)收入分成安排;及╱或(iii)关键绩效指标收入，向客户收取版税及许可费，从而获得收益。此外，公司为客户提供定制音乐和视频制作服务，如公司的在管及外部艺人及短视频平台，公司通过收取固定制作费获得收益。The Zhitong Finance App learned that according to the Hong Kong Stock Exchange's disclosure on October 12, Fenghua Qiushi Group Holdings Co., Ltd. (hereinafter referred to as “Fenghua Qiushi”) submitted a listing application to the main board of the Hong Kong Stock Exchange for the fifth time, with Douren Finance Co., Ltd. as its sole sponsor. According to reports, the company submitted to the Hong Kong Stock Exchange four times on January 22, 2021, September 27, 2021, November 15, 2021, and April 1, 2022, respectively. Its artists include Luhan, Black Panther, etc.
Fenghua Qiushi Group Holdings Co., Ltd. is a music and entertainment service provider that has been operating in China for over 10 years. It mainly focuses on awarding music copyright and music recording services, complemented by concert hosting and production and artist management. The company has always adopted a complementary business model and consists of three independent and self-reinforcing divisions, namely (1) awarding music copyright and recording, which the company regards as its main business segment; (2) concert hosting and production; and (3) artist management.
According to the prospectus, granting music copyright and recording is the company's main business, and most of the company's revenue comes from licensing music works. In terms of licensing and recording of music, the company has a diverse and growing music library, including homemade and purchased music works. The company divides music works into singles, digital and physical albums, videos, and selected catalogs, and licenses them to (i) digital streaming platforms, (ii) album production companies, (iii) marketing and advertising companies, and (iv) other entertainment companies, such as film production companies. In return, the company receives revenue by collecting royalties and license fees from customers based on (i) a fixed minimum guarantee amount; (ii) revenue sharing arrangements; and/or (iii) key performance indicator revenue. In addition, the company provides customers with customized music and video production services, such as the company's managed and external artists and short video platforms. The company earns revenue by charging fixed production fees.
In terms of artist management, the company's revenue mainly comes from providing services to customers, including digital streaming platforms, marketing and advertising companies, and commercial television broadcasters, by arranging for recording artists managed by the company to participate in (i) commercial activities, (ii) advertising campaigns, and (iii) TV/online programs. As far as the company's exclusive contracts with artists are concerned, the company manages its music and performing arts business services under an exclusive all-inclusive contract, while the company only manages its music business services under an exclusive music contract. The company manages and assists in their career development in the music and entertainment industry, including but not limited to music production, market positioning of artists, marketing strategies to maintain or increase their popularity, training, and performance evaluation. Generally speaking, the contract period between the company and the artist in charge of recording is not less than four years.
According to the Insight Consulting Report, the company has become a music entertainment group with an outstanding reputation in China, ranking fourth among more than 200 music record companies based in China in the Chinese music copyright market, with a market share of about 1.5% in 2020. According to the Insight Consultation Report, in China, market participants (such as companies) that grant music copyright depend on a single or small number of top artists. This is a normal phenomenon in the industry. The company believes that as the company pursues complementary business models and diversification strategies and expansion plans by identifying and training new artists and increasing the exposure and popularity of active musical artists, the degree of dependence on a number of artists is likely to decline in the future.
In fiscal year 2019, fiscal year 2020, and fiscal year 2021, the company's revenue was approximately 556.05 million, 70561 million yuan, and 81.858 million yuan respectively; the company's net profit was about 1,8818 million yuan, 42.717 million yuan, and 33.251 million yuan.
According to the prospectus, the company's revenue decreased by about RMB 448,000 from fiscal year 2018 to fiscal year 2019, mainly because (i) the company did not host a large-scale concert for Mr. Lu Han, a well-known recording artist in fiscal year 2019; and (ii) the reduction in commercial activities in which the company's active record artists participated in fiscal year 2019. Revenue increased by about 15 million yuan from fiscal year 2019 to fiscal year 2020, mainly due to the company entering into a new exclusive music cooperation agreement with client E in fiscal year 2020.
