According to the Financial Association on November 24 (Reporter Cui Ming), following last year's acquisition of 51% of the shares of Shanghai Film Yuan, Shanghai Film (601595.SH) is further increasing its stake in Shanghai Film Yuan, which is expected to further enhance the core profitability of Shanghai Film. At the "Shanghai Film Strength Sharing" meeting held yesterday, General Manager Dai Yun revealed that the integration of the company's IP business with traditional business will increasingly become pronounced in the future.

Dai Yun stated, "After the development cycle of the industry, we found that purely operating cinemas has become very difficult to support the high-quality development of a listed company, so we are laying out a second growth curve for the IP business, while also cross-sector collaborating both online and offline with different partners."

Games have always been an important area for IP monetization. In the first half of this year, Shanghai Film collaborated with multiple games such as "Sky: Children of the Light," "Battle for the Peace of Kyoto," "Naraka: Bladepoint," "Super World," "Time Travel Agency," and "Ball Heroes," achieving a total dissemination exposure of over 3 billion. In the second half of this year, the company launched the two-player interactive film game "Shadow Double," which topped the Steam bestsellers list.

It is worth mentioning that in the middle of this year, Kingnet Network (002517.SZ) announced a strategic cooperation with Shanghai Film, and they will jointly launch the first IP cooperation project, an authorized game based on "Black Cat Detective." Kingnet Network's vice chairman and general manager Shen Jun revealed that this "Black Cat Detective" mobile game will use idle tower defense gameplay.

In the future, collaboration between game IP and film IP will become more frequent. Shen Jun stated that there are many similarities between the shooting and narrative of video games and films, for example, the animated series including "Black Cat Detective," whose story can be extended in the game. "While respecting the original work, we add new plot elements in an interactive way to communicate with the users, allowing these old IPs to rejuvenate."

In addition to IP development, another approach is the linkage of film exhibitions, which has been validated during the film publicity phase. Ali Pictures' Chief Technology Officer Tian Jingbei mentioned that during the release of the film "What Kind of Life Do You Want to Live," the company simultaneously held an exhibition and used the platforms Tao Piao Piao and Damai to mutually drive traffic, conducting in-depth film publicity. Ultimately, this film won the box office championship during this year's Qingming Festival period.

"During the publicity process, we hope not only to operate a film but also to operate an overall IP centered around the film," Tian Jingbei stated.

Recently, the new Shanghai-style film "Good Stuff" produced by shanghai film is being screened. Dai Yun stated that during the publicity process for "Good Stuff" in collaboration with ali pictures, both parties are exploring how to allow the audience to experience the Shanghai urban culture conveyed in the film beyond the viewing experience. "Before the movie was released, we had already collaborated with many brands, merchants, and various offline activities, and the box office attendance of this film in shanghai is double the national average."

It is reported that as the main entity for implementing the big IP development global strategy of shanghai film group, shanghai yuan was established in October 2022. It engages in operating the copyright rights enjoying for 60 classic animation and film works authorized by the shareholder shanghai film group and shangmei film for free.

Last year, shanghai film announced the acquisition of 51% of shanghai yuan's shares, attracting significant attention from the capital markets. Subsequently, shanghai yuan has laid out new technology and entertainment fields such as interactive film and games, AI, and MR industries through licensing, joint development, investment, etc., accelerating the commercialization system of IP products. In the first half of this year, shanghai yuan's revenue and profit growth both exceeded 100%, becoming an important growth point for shanghai film's performance.

On November 22, shanghai film announced that the company plans to acquire 14% and 5% of shanghai yuan's shares from shanghai film group and shangmei film, respectively, at a cash price expected to be no more than 49.028 million yuan and 17.51 million yuan. After the completion of this trade, the shareholding structure of shanghai yuan will change to 70% held by the company and 30% held by shangmei film, while shanghai film group will no longer hold shares directly.