Boehner Pictures, which has been hovering in the IPO review queue for years, has finally got some good news.

On the evening of July 28th, the official website of the CSRC announced that Boehner Pictures's IPO application had been formally approved, which means that it has been nearly five years since the listing application, and after 630 days of examination and approval by the Development and Review Committee, the film and television leader's proposed IPO project, which has experienced ups and downs, is about to officially enter the A-share market.

Although it passed as early as the end of the year before last, the uncertainty of performance prediction brought about by epidemic factors has always been a major obstacle to Bona Pictures' obtaining IPO approval, and the unsatisfactory income from films such as "Nezha Rebirth", which it invested in while waiting for approval, has further added haze to its IPO.

However, Boehner Pictures, which relies on many powerful shareholders, not only won the blessing of high-income works such as "Changjin Lake", which set a record at the box office in 2021, but also benefited from the overall recovery trend of the film and television industry under the control of the epidemic. Finally, it significantly improved its performance certainty, and finally successfully obtained initial public offering approval.

From the industry's point of view, the approval of Boehner Pictures IPO is expected to be seen as a signal that the film and television industry has "opened the floodgates" for investment and financing in the capital market, and is expected to further increase the risk appetite of the film and television industry, which will play a positive role in guiding capital to help the film and television industry recover.

However, some analysts believe that given the particularity of Boehner Pictures' return from US stocks to A, as well as the strong shareholder resources behind it, the IPO achievements expected by Boehner Pictures are still unreplicable to a certain extent.

The improvement of performance certainty may help.

Bona Pictures, which has been unable to get approval for nearly two years since November 2020, has been a major concern in the IPO team.

It is understood that bona Pictures IPO approval has not been issued for a long time before, pointing to the decline in the certainty of performance brought about by COVID-19 's epidemic factors in 2020.

An investment banker close to Bona Pictures pointed out that the "blockage" that blocked Bona Pictures' IPO approval was not the decline in performance itself, but the deviation between the performance estimates in its prospectus and the actual situation, which directly led to the lack of reasonableness of its performance forecasts.

"the reason why Boehner Pictures approved the document after the meeting was that there was a deviation between the forecast and the result of the performance in 2020 at that time, of course, the main reason was related to the epidemic factors that occurred that year." "it will be exactly the end of 2020, so there will be plenty of time in the first half of 2021 to verify previous performance forecasts," the investment banker said. "

According to Boehner Pictures' forecast in the last edition of the prospectus, its net profit will be 117 million yuan in 2020, down 33.64% from the previous period. The revenue premise for this judgment to be verified is that five films, such as the Rebirth of Nezhu, which was originally scheduled to be released in 2020, can earn no less than 4.09 billion yuan at the box office.

In response to this estimate, the CSRC raised questions about it after the meeting, such as "whether it is prudent and objective" and "whether it has a basis for realization".

Although Boehner Pictures did not disclose the 2020 results during the approval waiting period, due to the rescheduling of the release time of "Nezha Rebirth" to early 2021, and the box office hit at the end of that year, the carefully planned "Emergency Rescue" box office hit the street, the superposition of various factors, in the end, the performance prediction of Bona Pictures became a "misjudgment".

In fact, a number of film and television stocks have seen a sharp decline in revenue under the impact of the 2020 epidemic. Statistics show that the business income of 24 film and television companies in "CSRC radio, television, film and film recording operations" and the median decline in net profit after deducting non-return are all more than 50%.

"in fact, it is not to say that a sharp decline in performance can not be listed, mainly information disclosure should be in place, estimates of revenue and profits should be reasonable, but for film and television companies, in fact, the estimated box office already has a greater uncertainty. in addition, the continuous disturbance of epidemic factors has aggravated the uncertainty of Bona Pictures' performance." The investment banker said.

But from the industry's point of view, the release of popular works such as "Changjin Lake" led by Boehner Pictures in 2021, as well as the overall recovery of the film and television industry, finally allowed Bona Pictures to win back the chance of IPO approval landing-in 2021, the average and median year-on-year growth rate of 24 film and television stocks reached 56.49% and 47.03%, respectively.

"the main reason is that the performance certainty has improved, the epidemic has been brought under control to some extent in 2021, the industry as a whole has recovered, and Boehner has not only become a beneficiary, but also popular works such as" Changjin Lake "have achieved multi-dimensional results, including income, influence and so on." "the combination of these micro and meso recovery factors contributed to the final approval of Boehner IPO," the investment banker said.

Whether "inclusive benefits" remains to be tested.

Bona Pictures' IPO approval, which has been waiting for nearly two years, has also boosted the confidence of the film and television industry to raise money through the capital markets.

ID:TradeWind01 learned that on the night that Boehner Pictures IPO was approved, many people in the film and television industry publicly expressed congratulations, and at the same time, there was a discussion in the industry about whether there were signs of deregulation of A-share financing actions against the film and television industry.

"Boehner's final approval shows that capital market financing for film and television companies may be showing a trend of opening the floodgates, which will further increase the enthusiasm of more funds to invest in the film and television industry and play a leading role in the recovery of the industry." Said a practitioner in the film and television industry.

"the epidemic has had a great impact on the film and television industry in recent years, and the capital investment in the film and television industry has also been shrinking, and the prosperity of the industry has not come up all the time." A PE person who follows the media industry in Shanghai also said, "but Boehner Pictures finally got the initial approval, in a sense, it is also a kind of recognition to the film and television industry."

If Boehner Pictures can really become a "loosening signal" of A-share financing for film and television companies, it will undoubtedly be a "rainy day" for the industry. According to Wind, the most recent film and television stock IPO dates back to IPO (002905.SZ) and Hengdian (603103.SH) in 2017, and no film company has entered the A-share market in the past five years.

"Jinyi and Hengdian are still targeted at cinemas that account for a relatively high proportion of projection business, while production and distribution revenues account for a relatively small proportion. If they are really production and distribution companies, they may still have to list targets such as 601595.SH and 600977.SH earlier." "production and distribution depends largely on box office performance, which is uncertain and asset-light," said an investment banker who follows IPO, a film and television company in Beijing.

By contrast, Bona Pictures, which is not purely in the projection business, has a more balanced income-its film projection revenue accounted for 28.89% in 2019, followed by agent distribution, main investment, participation, buyout / guaranteed distribution accounted for 22.67%, 18.23%, 13.22% and 8.17% respectively.

In addition, in the IPO project that Boehner Pictures intends to raise 1.425 billion yuan, in addition to 820 million yuan to be invested in cinema construction, another 605 million yuan is planned to be invested in the film project.

"in fact, investing in a film project must be a relatively high-risk investment in the city, and this is also where the film and television stocks are controversial. Boehner's inclusion of the film investment project in the fund-raising plan was finally approved, indicating that there are certain signs of loosening in the specific fund-raising matter of film and television investment." Said the investment banker who focused on the film and television company.

But some analysts believe that the final approval of IPO by Boehner Pictures also has some particularity. On the one hand, Boehner Pictures as a delisting from the United States "A project", the release of its IPO has a certain reference significance for Chinese stocks; on the other hand, Bona Pictures relies on BABA, Tencent, Sequoia, CITIC and other strong shareholders, these shareholder resources will also provide corresponding capacity to break through the IPO barrier.

"Boehner Pictures still has a certain particularity. It comes back from the US stock market, and its shareholder lineup is relatively strong. Many of the films and television productions currently involved also have different influences. These elements are not comparable to ordinary film and television companies." The investment banker close to Boehner Pictures said, "so to observe whether the financing policy of the film and television industry has really been relaxed, it depends on whether more similar projects are declared and listed in the future."