Five months after submitting the prospectus, Lehua Entertainment Group, the company behind Xiao Xianrou such as Wang Yibo and Fan Chengcheng, is about to officially land on the Hong Kong capital market.

　　On August 7, Lehua Entertainment successfully passed the listing hearing of the Hong Kong Stock Exchange. Du Hua, the leader, will realize the dream of Hong Kong stocks after several twists and turns.

　　The first stock brokerage for artists

　　Lehua's "history of making a family" revolves around the top-notch Han Geng at that time.

In 2010, Han Geng terminated the contract with South Korea's SM, returned to China for development, and joined Lehua as a shareholder of the company, holding 2.35% of the shares.

　　Han Geng brought the attention of the industry to Lehua; and Han Geng, a shareholder, put forward a strategic suggestion for Lehua: start idol trainee training.

Now the "pillar" of Lehua Entertainment, Wang Yibo, is a graduate of the Lehua trainee program and a member of the men's team UNIQ.

　　With the blessing of the trainee program, the development of Lehua Entertainment entered the fast lane and started the journey of listing.

　　In September 2015, "the first stock of artist brokerage" Lehua Entertainment was listed on the New Third Board.

After being listed on the New Third Board, Lehua Entertainment tried to go public through the backdoor.

Due to various factors, the merger and reorganization plan was terminated in early 2017, and the backdoor listing of Lehua Entertainment failed.

　　On March 22, 2018, Lehua Co., Ltd. was delisted from the New Third Board through a voluntary application for delisting.

　　On March 9, 2018, Lehua Entertainment considered exploring the plan of listing on the main board of the Shanghai Stock Exchange. On May 26, 2021, Lehua Co., Ltd. voluntarily terminated the pre-listing counseling.

　　Since then, Lehua Entertainment has hit IPO three times.

　　On March 9, 2022, Lehua Entertainment submitted an IPO application to the Hong Kong Stock Exchange, and it was heard by the Hong Kong Stock Exchange on August 7.

　　Artist management is the main source of income

　　According to the prospectus, Lehua Entertainment was established in 2009, and its main businesses include artist management, music IP production and operation, and pan-entertainment business.

As of April 30, 2022, Lehua Entertainment has a total of 66 contracted artists and 71 trainees including Han Geng, Wang Yibo, Meng Meiqi, Fan Chengcheng, Huang Minghao and Wu Xuanyi.

　　From the perspective of financial data, Lehua has maintained double growth in revenue and profit in recent years, of which operating income from 2019 to 2021 was 631 million yuan, 922 million yuan, and 1.29 billion yuan respectively.

In the first four months of 2022, revenue increased slightly by 3.4% year-on-year to 353 million yuan.

　　From the perspective of the specific composition of revenue, the artist management business is the main source of income, bringing in 530 million yuan, 808 million yuan and 1.175 billion yuan respectively from 2019 to 2021, and its proportion in total revenue also increased from 2019. 84% to 91% in 2021.

　　From 2019 to 2021, Lehua's purchases from Supplier B were 32.274 million yuan, 133 million yuan, and 302 million yuan, accounting for 43.9% of operating costs. In the past three years, the company has paid suppliers The purchase amount of B has increased by nearly 10 times.

In the first 4 months of 2022, Lehua's purchase amount from Supplier B reached 95.77 million yuan, accounting for 48.6% of the operating cost in the same period.

　　Who is Supplier B?

The supplier’s information shows that its business relationship lasts for 7 years, and the artist’s contract has been extended until 2026, adding that the artist’s attributable income is the main source of the company’s revenue growth, especially from 2020.

In 2020, 2021 and as of April 30, 2022, the company's revenue growth from this artist accounted for about 80% of the overall revenue growth.

　　It is reported that the initial date of Wang Yibo's contract is October 2014, and it has been 7 years until April 2022, and Wang Yibo's contract has been renewed for four years to October 2026.

In addition, in 2019, Wang Yibo quickly became one of the top players in the entertainment industry due to the fire of "Chen Qing Ling", and Lehua's purchase amount from Supplier B quadrupled in 2020.

　　It is worth mentioning that although pan-entertainment accounts for a small proportion of Lehua Entertainment’s current total revenue, it is growing rapidly.

From 2020 to 2021, the pan-entertainment business revenue will increase from 21.08 million yuan to 37.86 million yuan, a year-on-year increase of 79.6%.

In November 2020, Leroy Entertainment's first virtual group idol A-SOUL debuted and released the first single "Quiet" in December.

　　Lehua Entertainment stated that the income from the pan-entertainment business mainly comes from the commercial development of virtual artists, the authorization of variety shows, and the income from the sale of artist-related derivatives.

Comprehensive surging news, Southern Metropolis Daily, China Fund News