Yuehua entertainment's successful IPOs- Fan economy

After hitting the market for the 4th time in 8 years, "The Godmother of Entertainment" Du Hua's Yuehua Entertainment finally rang the bell in Hong Kong, with a share price of HK$6.22, up 52.45% from the issue price and a market value of over HK$5.4 billion.

Based on the 43.26% shares held before the over-allotment, Du Hua's fortune exceeds HK$2.3 billion.

Ranked No. 1 among Chinese talent management companies based on 2021 talent management business revenue, with a 1.9% market share.

Yuehua Entertainment has received three financing rounds, with pre-IPO founder Du Hua holding 50.18%, Sun Yiding (Du Hua's spouse) at 3.31%, Ali Pictures at 14.25%, Chinese Culture at 14.25%, and Byte Jump at 5%.

The initially proposed offering of about 130 million shares at HK$6.8-8.5, with total financing between HK$900-1.1 billion.

At the relaunch, the site was updated to 120 million shares, with a final offering price of HK$4.08, raising about HK$390 million, a reduction of nearly half.

Initially valued at around HK$7 billion, the market value was discounted by 70% based on the opening price on the first day of listing.

Previously, Harvest International and Blue Cursor withdrew, and Cat's Eye stayed. There are three new investors: Sun Mass Energy (China Ruyi Holdings), Ding Shijia (Anta Sports), and Haozan.

A few months ago, it was proposed to invest about 40% of the IPO proceeds in artist operations; about 15% in expanding the music IP library; about 15% in investments and acquisitions; about 5% in promoting artists' foreign performances; and about 5% in working capital.

Today, the percentage of artist operations has increased to 60%, with 45% going to "acquiring and renovating an artist training center" and 15% to artist promotion and operations.

Its artists: Han Geng, Wang Yibo, Fan Chengcheng, Meng Meiqi, etc., are all from Yuehua Entertainment.

For 2019, 2020, 2021, and the nine months ending September 30, 2022, the top ten artists accounted for 74.8%, 83.0%, 85.6%, and 87.2% of revenue, while the top artist accounted for 16.8%, 36.7%, 49.5%, and 58.8%, and that artist It was Wang Yibo. Therefore, Yuehua is also known as "Wang Yibo stock."

Supporting a higher valuation beyond the single idol business becomes the next problem to be solved.

Going public is not the end but the beginning.