How can you become a star without money?

Chapter 217 Trading to Resume Next Week [10,000-Word Update, Please Subscribe]

The interconnection of the three networks signifies the official opening of the digital age.

Stocks across major markets rose, and investors’ interest in the film and television and internet industries surged to new heights. Amid these positive developments, Wang Yao finally released Tianhuo Media’s Q2 revenue figures.

With total revenue of 1.6 million and gross profit of 6700 million, the growth rate of nearly 130% has once again shocked all industry peers.

Because Huayi, currently the leading Chinese-language media company, only had revenue of 1.2 million yuan in Q2, with a gross profit margin of 45%!

Although Tianhuo Media is a company that combines film and television production with e-commerce, its revenue scale is still too astonishing.

Two months ago, Tianhuo's first Series A funding round valued the company at 30 billion yuan, with revenue of 7000 million yuan.

Not only has revenue doubled, but although it borrowed 4 million yuan from external parties due to the repurchase of its parent company Meishe, the directly controlled suspended company 'Tianhuo Entertainment' is not a negative asset at all.

So what is the current valuation of Tianhuo?

This is the question that everyone is most concerned about. Some organizations even claimed that Tianhuo was the first listed company in China's media industry, but this claim was quickly met with skepticism.

After all, Tianhuo is not just in media and film, but also in e-commerce. In the end, it can only be classified as an internet company, and the valuation method has changed again.

While everyone was discussing it, many others sighed with regret.

"What a coincidence! They just repurchased shares, and the revenue growth rate for Q2 is already this high?" Cai Chongxin asked, looking at the data displayed on the screen.

"Advertising and promotion accounted for 70% of its business, so it could be considered a media company. Its valuation could have reached 40 to 60 billion yuan. We sold it at a loss, but not by much," Ma Yun commented.

If Wang Yao hadn't agreed to buy back the shares two weeks ago, the investment in Meishe would have been profitable by now.

"This is terrible. This must be a bottleneck for the online new media industry. Unless the film and television sector can achieve a breakthrough in revenue in the second half of the year, although he does have quite a few overseas projects," Cai Chongxin said, frowning.

He was the one who pushed for the investment in Meishe. He originally thought that losing 2 million was a loss, but he didn't expect to miss out on the opportunity.

“More than a thousand social security employees? And such a high gross profit margin? There’s something wrong with his revenue.” Ma Yun saw another key point.

"You mean?" Cai Chongxin also noticed the anomaly.

"An average employee generating 2 yuan in value per month? That's too high a premium. We'll probably suffer a huge loss in Q3," Ma Yun commented.

"Wang Yao announced that he wants to raise Series B funding to expand overseas, and Lao Shen and the others have been alarmed. They asked us if we should participate." Cai Chongxin looked at the text message.

“A hook,” Ma Yun commented, frowning.

"Shall we take another look?" Cai Chongxin was also a little unsure.

“We don’t have the energy to expand our business right now. Let’s see how things go in Q3. Anyway, I’ve already got Taobao in my grasp.” Ma Yun nodded.

The payment incident cost him a lot of money, and now he has to deal with the praise, Taobao Mall, and Double 11 in the second half of the year.

"50 billion?" Yang Zi swallowed hard after hearing Tianhuo's Q2 report.

He instinctively wanted to find someone to discuss with him whether there was definitely something wrong with Skyfire's revenue.

They discovered that Wu Kebo had disappeared, and Xu Chen had been "recruited" by Wang Yao. In the blink of an eye, these media veterans had not only been brought to their knees by a junior, but they had also watched helplessly as the junior grew stronger.

A friend's success is harder to accept than one's own failure, let alone an enemy's.

Yang Zi is now filled with regret, wondering why he didn't stand firm in helping Wu Kebo fight against the takeover bid for Chengtian Entertainment.

If he had been more resolute back then, he might now hold a significant number of shares in Tianhuo Media.

After thinking it over, it's probably for the best. The parent company's valuation is higher, which is definitely good news for the subsidiary, Tianhuo Entertainment. The stock price might rise, and then we might be able to pay back the money we owe him.

Yangzi could only console himself with this thought.

"Dude, you're really not loyal at all! Why didn't you tell your brother about such good revenue beforehand?" Zhang Chaoyang called immediately to interrogate him.

If Tianhuo were just a company valued at two or three billion, he might only see Wang Yao as a potential stock.

However, with the release of these Q2 data, the company's valuation has at least doubled. As long as the company doesn't have any major scandals, its future IPO will definitely surpass Huayi. Moreover, it also controls a listed entertainment company. If Wang Yao was previously an entrepreneur in this industry, this is a significant achievement.

But now he can definitely be considered an 'entrepreneur'.

"I just got the data too. I didn't expect Q2 revenue growth to be so good. However, it's mainly due to advertising and marketing business, which is basically all annual contracts. Next quarter, it definitely won't be as much," Wang Yao said with a smile.

"Don't pretend. Even if there's no growth in the next two quarters, Tianhuo is still a company with annual revenue of over 5 million and net profit close to 3 million, right? It's comparable to Berna last year," Zhang Chaoyang said with a smile.

"It's not that high. We'd be lucky to maintain a net profit of 1 million. Otherwise, why would we be in such a hurry to raise funds to expand our business?" Wang Yao said with a smile.

The revenue report only disclosed the categories without details, leading Zhang Chaoyang to believe that online variety shows and similar programs were generating high profits. Little did he know that the real money-making opportunities were all in Wang Yao's hands, and all of Tianhuo's business was outsourced.

If all film and television investments are attributed to Tianhuo, then the revenue from the film and television sector alone could reach 2 to 3 million yuan in the second half of the year.

"So you've already reached Series B funding? It seems the pressure to meet performance targets is quite significant. How much are you planning to raise?" Zhang Chaoyang pondered for a moment. Alibaba's new company project had fallen through, so he did have some spare cash.

"Let me see if you can value it at 50 billion, and then I'll raise another 20%," Wang Yao said.

Although he only holds 20.5% of the shares, he amended the company's articles of association last time. Even if he only holds 5% of the shares in the future, he will still have absolute control due to the dual-class share structure, and he will have at least 3 votes on the board of directors in the future.

"It's a bit difficult, after all, the time is too short. But it also depends on how much the investors value you. If they want to raise funds, let me know, and Sohu will invest a little." Zhang Chaoyang did some mental calculations.

Unless Tianhuo Entertainment's stock price rebounds in the second half of the year, it will be difficult to provide strong asset support for Tianhuo Media. Tianhuo is currently a typical asset-light e-commerce company with fixed assets of less than 1 million yuan.

Originally the most valuable internet project, Taobao Girl website was greatly discounted due to Alibaba's involvement, and the acquired Meishe.com was even a 'negative asset'. Although the revenue growth rate was very fast, it was indeed like a castle in the air.

"No problem." Wang Yao agreed with a smile, exchanged a few pleasantries, hung up the phone, and looked at Guo Guangchang of Fuxing who had rushed over.

In the previous round, he was coerced by Shanghai Commercial Investment Group into investing in Tianhuo, but in less than three months, Wang Yao delivered a result that exceeded his high expectations.

Although the Taobao Girl project, which I had high hopes for, failed, Taobao Boss did support the core revenue and will drive the revenue of the company's peripheral businesses in the future, which can be considered as making up for some of the losses.

But he really didn't expect that Tianhuo's new media business line would be so powerful, taking on nearly 1 million yuan worth of advertising and film and television production business in Q2.

In this way, Tianhuo has become one of the largest media and film production companies in China. Although its valuation has shrunk somewhat due to its shift from science and technology innovation to the cultural and creative industry, the probability of listing and the premium have greatly increased.

Huaxia has put a lot of effort into promoting the cultural and entertainment sector this year. While Fosun has mostly invested in science and technology innovation companies, it does need a media company specializing in oral communication.

"Mr. Wang really gave me a big shock." Guo Guangchang looked at Wang Yao with a complicated expression.

"Why do you say that, Mr. Guo?" Wang Yao asked with a smile.

"The revenue growth has been too rapid, and I somewhat regret not investing more back then." Guo Guangchang smiled. "But it's still much better than Alibaba getting off the train halfway through."

"What does Mr. Guo think of Tianhuo's valuation?" Wang Yao asked in return.

"The truth? 30 billion." Guo Guangchang said truthfully.

Having lost its internet attributes, Tianhuo's revenue has doubled, but its potential is very limited. Currently, its only support has become advertising and film and television imagination, but it lacks copyright and core artist assets compared to Huayi.

Therefore, maintaining a valuation of 30 is quite reasonable.

"I'd like to estimate 50, is that possible?" Wang Yao asked in return.

"Yes, but it's very difficult." Guo Guangchang shook his head. "In terms of media advertising, there is Fenzhong Media in this field, which currently has a market value of 20 billion yuan. If Tianhuo also takes the lead in listing its media business, it will be very difficult to surpass it."

Fenzhong Media is currently the largest Chinese media company listed in the US, with a peak market value exceeding 10 billion US dollars. However, it claims to have a monopoly on LED and elevator advertising exposure nationwide.

Tianhuo's current revenue is negligible. "Unless President Wang acquires Mulan Street, the valuation could be at least 60 billion or more," Guo Guangchang said with a smile.

While everyone's attention was focused on Tianhuo, his eyes were already on Mulan Street. Although Mulan Street had not yet released its Q2 revenue, the fact that Guo Guangchang's wife, secretary, and other women around him were using the platform already spoke volumes about its value.

“That’s not very realistic. Mulan Street’s valuation is tied to JD.com.” Wang Yao shook his head.

"Mr. Wang, we can talk about the core business model of Firelink Future." Guo Guangchang smiled.

"We will still use Taobao Girls as a link to bind small and medium-sized businesses. Although Alibaba has had a great impact, I insist that Taobao Girls' services are of higher quality. In the long run, customers will judge for themselves. In the future, the e-commerce service market will still be worth hundreds of billions."

Although many people are pessimistic about it, I think it still has a chance. By leveraging Taobao models to promote the brand, I've calculated that top-tier beauty brands like Magic Formula, which we serve, can invest at least 3000 million yuan annually in marketing and promotion, while mid-tier brands spend 500 million yuan per year.
"As long as Tianhuo partners with 10 top-tier and hundreds of mid-tier brands, it can generate nearly 10 billion in advertising and promotion revenue. Adding in other film and television revenue, I'm quite confident that it can reach 20 billion in annual revenue in the future," Wang Yao said with a smile.

"Ten top performers are easy to manage; we at Fuxing can provide that. But hundreds of mid-tier performers—do we really have that many? Tianhuo is a media promotion company, not a guaranteed revenue model, which means that the e-commerce brand needs to have at least 100 million in revenue." Guo Guangchang doesn't have much confidence in the development of the e-commerce industry.

However, since the film and television industry relies on mass publicity, there is little objection to this.

After some discussion, Guo Guangchang's target price was 40 billion yuan, which is probably the maximum valuation that most investors would give to Tianhuo Media.

"I'll think about it some more," Wang Yao sighed.

"Mr. Wang, don't worry. Tianhuo is young, and you are even younger. I'll bring you a few big clients in the second half of the year to stabilize the revenue. Maybe next year we can reach a scale of 10 billion and go public in the US," Guo Guangchang said with a smile.

“Going to the US would require adjusting the IVE architecture, which is quite troublesome. I think we should just operate domestically,” Wang Yao said, frowning.

"We'll talk about that later." Guo Guangchang was taken aback.

Tianhuo's asset-light model is the type most favored by US stocks. On the contrary, listing in China might encounter some obstacles. Suddenly, I felt that Wang Yao was an outsider when it came to capital operations.

But then he thought about how easily he could acquire Chengtian, and suddenly his left and right brains started to fight each other.

Is this kid pretending to be stupid to fool me? Or does he really not understand?

"Why does Mr. Wang want to expand into overseas film and television markets?" Guo Guangchang asked, puzzled.

It's clear that the domestic media industry hasn't even established a firm foothold yet.

"The profits are high! My two variety shows in the first half of the year, the Korean version and 'Fairy Robe' only brought in 30 million in revenue," Wang Yao said with a smile.

“That’s true. Korea and Japan are developed regions, and their businesses value advertising investment.” Guo Guangchang nodded, feeling that although the strategy was somewhat risky, it wasn’t problematic.
"That concludes my opinion on Skyfire. By the way, is Mulan Street seeking financing?"

"The development of Mulan Street has reached a bottleneck. It's estimated that the earliest it can be done is after Singles' Day this year. Rong is at a disadvantage now," Wang Yao said with a smile.

The two were chatting when Wang Fan from Shanghai Commercial Investment Group arrived late.

"I had a short meeting, so I'm late. Please forgive me," Wang Fan said with a smile.

“The leader didn’t need to come in person; I was just spreading the word,” Wang Yao said, standing up.

"Sigh, with such a joyous occasion as Tianhuo, I definitely have to come and offer my congratulations." Wang Fan said with a smile.

The two briefly recounted the content of their discussion.

Wang Fan frowned and said, "I agree with what Mr. Wang said. No matter what, Taobao Girl is a new type of e-commerce platform and it will definitely have development in the future. The media and film industry is already a red ocean industry. On behalf of Shanghai Commercial Investment, I firmly support Mr. Wang's development strategy."

Just kidding. It's not easy for Shanghai to produce two promising new companies related to internet e-commerce. Even if you're just trying to brag, you have to try to get on their good side. E-commerce is a major trend.

"Thank you for your support, leaders." Wang Yao nodded with satisfaction: "In the future, Tianhuo may also be involved in other intelligent industries, such as AI and cloud computing. I plan to raise funds and jointly invest with Xiawei Company in several project research and development laboratories, which may be located in Shanghai."

Guo Guangchang's eyelids twitched upon hearing this.

Why didn't you say so earlier?

"That's great! Technology is our main direction for future development. But isn't Xiawei in communications? Are their R&D capabilities very strong?" Wang Fan asked doubtfully.

“Xiawei has always invested well in R&D, but it’s mostly in the communications field. However, it does have projects related to 5G and AI, and it has been cooperating with India since before the millennium,” Guo Guangchang nodded.

"3G isn't even widespread yet, and they've already started developing 5G? Impressive! Although I don't understand, Mr. Wang's thinking is sound. Shanghai needs these kinds of high-tech companies. Just ask for any support you need."
"By the way, do we need land to build a lab? I can help you apply for a plot. After Tianhuo goes public, it will need a base. Although the current office environment is good, it's not formal enough. Mr. Wang, you can start preparing for it." Wang Fan waved his hand.

“We don’t have the capability to take over Tianhuo right now. If needed, we’ll definitely contact the leadership.” Wang Yao raised an eyebrow slightly.

He just made a grand promise to win over local shareholders, but unexpectedly, Wang Fan actually got down to business.

However, it would be nice to have the opportunity to acquire a piece of land and hoard it. Wang Yao thought that there was a piece of land opposite the university town on the other side of the river that was perfect for building a commercial and residential integrated company building, so that people could take a boat to and from get off work.

"Okay." Wang Fan nodded and also asked about the financing and future development plans.

“Mr. Guo thinks the financing may not meet my expectations, so I’m going to wait a bit longer. Anyway, the company’s debt ratio isn’t high, so we can wait until Tianhuo Entertainment resumes trading and see how the shareholders react to Tianhuo,” Wang Yao said with a smile.

"Tianhuo Entertainment is going to resume trading? When?" Guo Guangchang raised an eyebrow.

With so many positive factors, Tianhuo Entertainment's stock price will definitely rise after trading resumes, but it's hard to say how high it will go. If Tianhuo continues to generate news, it might be worthwhile to trade it. At the very least, you can buy at the bottom, since Tianhuo Entertainment still has a 20% stake in Tianwang.

Fuxing is quite interested in this aspect.

"Trading will resume next week." Wang Yao smiled.

The Q2 financial report was released on Thursday the 8th. Wang Yao received various investors until Sunday. Most of them were interested in Tianhuo, but seemed resistant to the valuation of 50 billion, similar to Guo Guangchang's view.

With unclear business model positioning and the precedent of Meishe's collapse, everyone is very cautious about this type of asset-light company.

Wang Yao didn't force them; if you don't vote, plenty of others will.

The day they flew directly to Korea happened to be the premiere of Running Man.

Wang Yao secured the online and Chinese rights to Running Man two months in advance. These kinds of variety shows with star-studded casts are usually invested in by the TV stations themselves. Since he didn't get an investment quota, he secured the rights before the show even aired, and it was a cross-border copyright, which helped with the show's promotion. So he only spent a bargain price of over ten million.

Furthermore, Korean Television (TVK) has very strict regulations on product placement in its variety shows. Only opening and closing credits and short verbal announcements of less than 10 seconds are allowed to be broadcast, in order to ensure the purity of the programs.

The requirements for soft product placement are also very strict, so whether it is title sponsorship or sponsorship, it is relatively high-risk. However, in order to let Kim Ji-won, Kim Tae-ri and Han So-hee ride on the popularity of the first season's starting lineup, Wang Yao got KT a sponsorship.

The Korean branch is now very large, with nearly 300 people in the production department alone. The agency department recruits and acquires its own talent, and has signed more than 100 models. It mainly undertakes the online shooting business of Taobao models.

Among them, Kim Tae-ri and Han So-hee are the most popular. They are top influencers in China and have nearly a million followers on the Korean social media platform Ms., making them truly well-known internet celebrities.

Kim Ji-won's popularity is beyond doubt. She was dubbed the "most beautiful Korean girl" at the World Expo and appeared on the variety show "Fairy Robe". In Korea, she was given the persona of "the beautiful heiress who conquered China", even though she only had one commercial and one variety show.

But the fact that he had five million Twitter followers and over twenty million social media followers worldwide was a huge shock to the people of Korea, whose population was only fifty million.

This number of fans alone is enough to make Korean viewers blindly praise it.

In the first season of Running Man, Wang Yao had Kim Ji-won bring Kim Tae-ri and Han So-hee along in order to break into the Korean entertainment industry.

They have three nationally influential films—Silenced, Ho-won, and Plaything—waiting to elevate their status.

Each episode is 70 minutes long.

Just as Kim Ji-won reached her limit, she clung tightly to Wang Yao, panting heavily.

Wang Yao looked at Kim Ji-won on the TV, then at Kim Ji-won in his arms, gently patted her head and praised her.

"Performing well."

...[Data as follows: approximate]

(End of this chapter)