Event: on December 23, 2016, Wanjia Group, the largest shareholder of Wanjia Culture, signed a "share transfer Agreement between Wanhao Wanjia Group Co., Ltd. and Tibet Longwei Culture Media Co., Ltd." Wanjia Group transferred its 185 million shares of the company's outstanding shares to Longwei Media, accounting for 29.135% of the company's total shares. Before the completion of this transfer, Wanjia Group held 193.822297 million shares of the company, accounting for 30.525% of the total share capital of the company. After the completion of the transfer, Wanjia Group held 8.822297 million shares of the company, accounting for 1.389% of the total share capital of the company. After the completion of the transfer, the actual controller of the company will be changed from Kong Deyong to Zhao Wei, the actual controller of Longwei Media.
Specific content:
The transfer price is 3.0599 billion yuan, 185 million shares, corresponding to 16.54 yuan per share, which is 90% of the price of 18.38 yuan per share before the suspension. The payment is divided into four stages: 1) Longwei Media shall pay the first share transfer price of RMB 250 million within 3 working days from the date of signing the share transfer agreement; 2) Longwei Media shall pay the second share transfer price of RMB 1.2 billion within 30 working days from the date of signing the share transfer agreement. 3) Longwei Media shall pay the third share transfer price of RMB 1.2 billion within 30 working days from the date of completion of the underlying share transfer; 4) Longwei Media shall pay the final share transfer price of RMB 409.9 million within 180 days from the date of completion of the underlying share transfer.
During the transition period: Wanjia Group promises not to change the production and operation of listed companies. It shall not be agreed that Wanjia Culture shall not dispose of assets without reasonable commercial purposes, guarantee, invest abroad, increase debts or give up creditor's rights, undertake major obligations, etc., after the completion of the third share transfer price payment, in accordance with the provisions of relevant laws, regulations and normative documents The Wanjia Group shall, within 10 working days, urge the existing directors, supervisors and senior managers of the listed company required by Longwei Media to apply for resignation, and the replacement of the above-mentioned personnel shall be completed no later than one month after the above-mentioned personnel submitted the application.
Follow-up plan: within 12 months from the date of completion of the transaction, on the basis of continuing to do a good job in the existing main business of the listed company, it is proposed to submit to the general meeting of shareholders of the listed company an asset injection plan such as a major asset restructuring plan examined and approved by the board of directors of the listed company, or a plan for issuing shares to purchase assets or a non-public offering to raise funds for the purchase of assets. It is proposed to inject high-quality assets with good growth and strong profitability around the cultural and entertainment industry, so as to further improve the profitability of listed companies. At the same time, in order to focus on the cultural and entertainment industry, we do not rule out the divestiture of the main non-cultural and entertainment assets and business of listed companies or their subsidiaries.
The introduction of Longwei Media opens a new imagination space for the cultural industry of listed companies to integrate. Zhao Wei, the actual controller of long Wei culture, holds a bachelor's degree and a master's degree in the Department of performance and Director of the Beijing Film Academy, vice president of the Chinese Academy of Film Performing Arts, and executive member of the China Film Directors Association. She is a well-known film and television actor, singer and director in China. Has extensive contacts and rich resources in the industry. The transfer agreement points out that in the future, we will consider injecting high-quality cultural assets, focusing on the cultural and entertainment industry, and relying on Zhao Wei's resources in the cultural industry, we believe that it will open up a new space for the cultural industry integration of listed companies.
Other cultural enterprises that Zhao Wei is involved in include: 1) Princess Cultural Communication (production, distribution of cartoons, feature films, TV variety, 70% equity); 2) Zhao Zhao (Shanghai) Film and Television Culture Studio (film and television drama, stage planning and consulting, 100% equity). The core related cultural enterprises include: 1) BABA Film (Film and Television Entertainment, Zhao Wei's husband Huang Youlong holds 4.97%); 2) Tang de Film and Television (Film and Television Entertainment, Zhao Wei's elder brother Zhao Jian holds 8.01%. Zhao Wei holds 1.46%); 3) Hebao Entertainment Media Co., Ltd. (radio, television, film and television program production, distribution, Zhao Wei holds 5%).
Investment advice: at present, the company is still in the suspension stage, and the signing of the transfer contract is also uncertain, so we maintain the previous profit forecast based on the company's existing animation, games and e-sports secondary business. The company is expected to achieve operating income of 722 million yuan and 823 million yuan in 2016 and 2017 respectively, an increase of 99.58% and 14.07% respectively over the same period last year. The net profits attributed to the parent company were 172 million yuan and 218 million yuan respectively, an increase of 521.69% and 27.26% respectively over the same period last year, and the corresponding EPS was 0.27 yuan and 0.34 yuan respectively. The current stock price corresponds to 68max 54 yuan, and the target price in 2017 is 24.75 yuan.
Risk hints: 1) there is uncertainty in the scheme when it involves the transfer of control; 2) the risk of insufficient integration capacity of pan-entertainment business
