Shanda Literature losses in the U.S. public?

Editor's Note

Last April, nine high-profile ministries issued "on the financial support of cultural development and prosperity of industry promotion and guidance." Over the past year, the cultural industry has been actively improve the investment environment, mergers and acquisitions, public finance, bonds, trust financing, equity investment, credit record and other aspects of scale and achieve a new leap. But it should be noted that, due to late start, weak economic foundation and asset attributes and other factors, China's cultural industry and the combination of financial resources is still at a relatively early stage. Over the past year, which combined cultural and financial experience and experience, capture a few special edition pieces for readers to "see reflected and see the whole picture."

Chinese Internet companies line up in the U.S.! After all network, good margin century, after the Phoenix New Media, Tudou, wash rice network, Thunder, and telecommunications networks, and network will also be happy to enter the U.S. listing process ... ...

Recently, the grand literature also formally submit the prospectus, plans listed on the NYSE is expected to raise $ 200,000,000 capital. The news came out, sparking a huge waves: a pure content, why can the Chinese cultural enterprises in the United States? Loss of a business is still about how the "story" to convince U.S. investors? What a grand charm of literature with capital markets into the United States? Grand literary tour of the United States gave public enterprises and the Chinese culture, China's capital markets ... what kind of inspiration ...

Careful deliberation on the U.S. tour market

In recent years, literature has been carefully grand layout and integration of industrial chain, as listed on tour, "Tim Brick paving the way":

Starting point for the acquisition of the Chinese network, Jinjiang Literature Network, Hongxiutianxiang, the banyan tree and other seven original literary website, and resource site to listen to audio books and reading between the book net network, established a website full of advantages of the vertical group, known as the master the current domestic network of more than 90% of original literary content resources, forming a network of literary industry's dominant companies. In addition to literary website, Shanda also acquired the Chinese literary world, in the text and poly Shi Wenhua Tomohiro planning three other book publishing companies, bookstores have full copyright cloud operating platform, has been involved with Internet publishing industry, plus a reader Bambook, also into the field of mobile reading ... ...

These acquisitions, carried out from the grand literary content to the media, content delivery from mobile devices to the full range of industrial layout, but also makes their business with explosive growth. Quiet period now in the grand literature does not provide additional information, but its prospectus, in the past three years, revenues were 52.98 million yuan, 1.34 billion yuan, 393 million yuan in the first quarter revenue of 1.4 billion yuan, increase of 100% or more, it is consistent with U.S. investors to pursue high-growth preferences.

Yu Yi, an analyst at Analysys International analysts believe that the listing of the grand literary tradition of the copyright management and offline publishing will play a better role in promoting, but also will get more resources, thus contributing to the formation from the video, online games Literature of the industrial chain to the network integration for the future development of better market opportunities. In addition, if the successful listing, Shanda Literature will be the following Shanda Shanda Group, Actorz, a grand game, cool, 6 after the fifth listed companies, but also toward Shanda "Disney entertainment empire of China," the dream forward.

Loss of performance is Nie Bahan

"Despite the rapid revenue growth, but still faces big losses in troubled literature." Shanda Literature in the prospectus, and did not avoid a loss on the fact that: In the past three years, loss of 22.5 million yuan, respectively, Shanda Literature, 74.5 million yuan, 56.48 million yuan . In the first quarter loss of 3.69 million yuan is still a grand literature, but less than a year earlier loss of 12 million yuan.

One pair of grand literary analyst who has studied the operations, says: grand literary acquisitions one after another, "looks very good," are actually "thunder and rain", and earnings and poor, in particular, but also in the United States had very Nie Bahan.

Literary site into more than output. Recently, the Internet writer Murongxuecun claimed his best-selling book, "Forgive me for the Red reverse" its Web site in a grand literary obtained within three years of 550 million hits, but eventually received only 455 dollars divided, in part Literature on the Internet led to the profitability of the industry's challenge. Literature in the grand literary seven sites, only a starting point for the Chinese network, try to create a fee to read mode, a slight profit.

Reader market in recent years, the cloud of a grand literary bookstores and book promotion as an important future development of the layout, I hope to form a new profit point. However, due to the more feature-rich, more stylish, more trend iPad impact, the reader is not to be optimistic about the market, not only the sharp drop in sales and marketing efforts for many years cultivating in vain. According to Analysys think tank, the latest data, the first quarter of this year, China sold tablet PCs 1,036,700 units, which accounted for 78.33% of the Apple iPad share, basically forming a monopoly; domestic e-book sales over the same period was only 28 million units, not to one-third of Tablet PC, and half of the country occupied by the HW. In this case, the grand literary Bambook difficult to mass production, profit potential is also not optimistic.

Some familiar with the situation of the grand network of literature in recent years, and users can not help but expressed concern: "Shanda Literature will be listed will not 'break'?."

Only read on the phone, this is the best piece of business of the grand literature. With the 2010 base of China's mobile phone to read the rise of the grand literary reading base of China's largest mobile phone premium content providers, its wireless business revenue last year of 6,000 million, more than 5.8 million yuan in 2009 increased by 10 times accounted for 15.4% of total revenue. But the future of the business risk is that some authors and publishers will go directly to the base of mobile phones by reading published literature and no longer need to go through a grand.

Industry experts point out that in the United States is not no risk, not allowing companies to "Council", made the concept of storytelling. Their market in China, and in the United States, not necessarily be understood, but also easily susceptible to abandon pursuit. If investors do not have confidence, is likely to fall below the issue price or withdraw from the market. Listed in the U.S. this year, 12 Chinese enterprises, including all web companies, including nine break, due to timely information disclosure and other reasons, the Chinese concept stocks of Wall Street investors were "abandoned" - Shanda Literature in the U.S. listing, can escape the bad luck, we'll see.

Investment in the emerging concept of cultural industries

"Loss of cultural enterprises in the domestic market did not meet the requirements of overseas listing is no choice." Culture Industry Research Institute of Peking University Professor Chen Shaofeng concluded, "can not be listed in the domestic market, to market in the United States, shows the two countries on the emerging concept of cultural differences in industrial investment. "

Professor Chen Shaofeng analysis that the NYSE and the Nasdaq hi-tech companies have preferential policies to value the company room to grow, as long as operating income, cash flow, not profitability but also the immediate market. Despite the loss of more U.S. investors dare to invest, is that the United States inclusive of creative enterprises and improve the mechanism, the loss does not mean they think that future losses, high-tech business and cultural enterprises are from the feeding of the growing have the capital support. Clearly, in our national innovation system, financial innovation can not fully meet the needs of enterprises, financial support not only to "icing on the cake" for emerging industries, the cultural assets of the light industry, especially in new technology platform is more cultural industries its specificity, the need for time to find new business value, develop the market, financial products should also be "timely."

Historical development experience shows that financial support can promote the rapid development of an industry, and now China is to promote the great development of cultural industries, we must study and solve the cultural and financial "mismatch" phenomenon, but also tactical from strategic fall in culture identify all aspects of industrial development issues, every breakthrough, the combination of promotion of culture and finance.

Reporter ZHANG Yu-ling