Lehua Entertainment has suspended the IPO, and highly relies on "Wang Yibo" to become a hidden concern

The actor Li Yifeng was detained for his sorrow, making the topic of "artist turn over" once again the focus. In the capital market on the other side, the listing of the "first share of the artist's agent" also encountered twists and turns.

Lehua Entertainment, which was originally planned to officially land on the Hong Kong Stock Exchange on September 7, suddenly issued an announcement on September 2nd, deciding to delay global release and temporarily slow down the IPO. The sound of market sounds generally believes that the reason why Lehua suspends the IPO is that the valuation is too low.

After Li Yifeng's "rollover", some investors commented that if Lehua's head entertainer is also "ruming" like Li Yifeng, how can the business single and highly depend on the head artist Lehua Entertainment how to bring continuous and stable benefits to investors? How does Lehua maintain the attraction of capital?

Lehua temporarily stops Hong Kong stock IPO

The market sound believes that it may be too low due to the low valuation

On September 7, it was originally the day when Lehua Entertainment was listed on the Hong Kong Stock Exchange, but at the time of the door, Lehua Entertainment suddenly "braked".

In March of this year, Lehua Entertainment, who was embraced by Wang Yibo and Han Geng, submitted a prospectus to the Hong Kong Stock Exchange; on August 7, through listed hearing; August 24th, the prospectus was opened; August 31st, on August 31, Complete the prospectus.

However, Lehua Entertainment, which was originally planned to officially land on the Hong Kong Stock Exchange on September 7, suddenly issued an announcement on September 2nd, deciding to delay the global offering and temporarily relieve the IPO. Lehua Entertainment did not explain the reason for the suspension, but only mentioned the words "in view of the current market conditions".

↑ Announcement Screenshot

According to the Southern Metropolis Daily, Lehua related persons responded that due to factors such as international geopolitical and global inflation, anti -bulling economy and epidemic situation, the capital market continued to sluggish, coupled with the continued fall of the HSI, a large number of new shares broke, Lehua Entertainment was cautious after carefulness. Considering, the decision to temporarily relieve the IPO of the Hong Kong stocks, and stated that "this decision has been supported by the original shareholders including bytes and Ali, and subsequent arrangements will be determined according to market conditions."

However, the market sound generally believes that the reason why Lehua suspends the IPO is that the valuation is too low. Earlier, Lehua intends to offer 133 million shares worldwide, of which 13.256 million shares were sold in Hong Kong, 119 million shares were available in international offerings, and 15%of the off -shares were extended. The issuance price was HK $ 6.8 ~ 8.5 per share.

Artist "rollover" is a hidden worry

How does Lehua highly rely on Wang Yibo to attract capital?

From the perspective of the prospectus, Lehua's main source of income is the artist management business. From 2019-2021, the business brings Lehua 530 million yuan, 808 million yuan and 1.175 billion yuan in income, respectively, accounting for the proportion of total revenue. As high as 84%, 87.7%, 91%, and it has risen year by year.

↑ Wang Yibo's picture according to IC Photo

Despite the huge scale of Lehua artists, 66 signed artists and 71 trainers such as Wang Yibo, Han Geng, Meng Meiqi, and Wu Xuanyi. However, most of the entertainer management business revenue comes from head artists, especially the popular artist Wang Yibo.

The Red Star Capital Bureau noticed that from April 2019-2022, the top ten artists should account for 74.8%, 83.0%, 85.6%, and 84.5%of the total revenue of the same period. The ranking of the first artists should account for 16.8%, 36.7%, 49.5%, and 56.8%of the total revenue of the same period, respectively. In the next two years, they contributed almost half of the mountains.

In the prospectus, Lehua clearly stated that the dependence on supplier B was the largest, and the purchase amount of the above time period was as high as 563 million yuan.

The information about supplier B points to his head artist Wang Yibo. Lehua said that the supplier B signed the entity controlled by the male artist and a graduate of the Lehua training program. The artist's contract was valid until 2026. The Red Star Capital Bureau noticed that Wang Yibo and Lehua's disclosure contract was in line from October 2026.

Nowadays, it is highly dependent on "Wang Yibo", one can bring performance to Lehua on one side, and the other side has become Lehua's hidden concerns. How to maintain the attractiveness of capital may be the key to Lehua Entertainment's IPO.

Red Star Journalist Qiang Ya Mill

Edit Yu Dongmei Zhang Li

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