In the evening of April 25, CNS disclosed its 2015 annual report. The revenue income reached 10.085 billion Yuan, increased by 11.58%; profit gained 1.806 billion Yuan, grew by 16.55%; the net profit to shareholders of the listed company was 1.695 billion Yuan, up by 15.41%. The eye-catching achievements are mainly resulted from the steady growth of its traditional business in publication, business scale expansion in financial service and digital education. Analysts said, “in 2015, due to the establishment of the first fund management company in publication and media sector, CNS successfully accelerated its implementation of “culture+finance” strategy for the transformation and upgrading, and stepped forward more firmly in its combination of industry with finance. And we can see new change resulted from the combination is ready to show”. During the Twelfth Five Year Plan period, CNS has taken a development path that combined online and offline businesses, and culture with finance (Two Combinations in short). Hence, the establishments of the financial company and BOFO fund are inherited in the extension of its industrial chain.
The Two Combinations has been lifted to be the core strategy for future development of CNS. And the road map, time line and action plan would be in place for better integration of culture with finance, cultural industry with capital.
Capture the “Gravitational Wave” for Coordination of Industries
“ The financial company provides service for the member units of the Group. Meanwhile, it also can be taken as a platform that generates gravitational wave”. Wang Libo, GM of the financial company said in her exclusive interview with REDNET. What she referred to as “a platform that generates gravitational wave” is the first one of its kind in China’s cultural industry-- Hunan Publishing Investment Holding Group Financial Co., Ltd.. On May 6 of 2014, the official opening of the financial company symbolized that Hunan’s publication sector began to explore a new mode that combines industries and finance. Through utilizing the financial company’s expertise and platforms, the Group could unify and standardize the management and usage of capital, lower the cost of capital usage and increase its efficiency of capital use inside, while also improve its financial and bargaining strength, attract and leverage more capitals, and build a cultural financial system outside. From her experience in the financial company in the past two years, Wang Libo had a profound understanding of the leverage effect of the financial platform, she said, “ the gravitational wave means that our financial demand for industrial development could be met through the financial company. Although the company could not conduct businesses with everyone like banks, at least it could attract companies that are closely linked or related to the industry, and concentrate companies that coordinates with the industry. This attraction is a request for quality improvement of the industry and a gravitation for companies that seeks more powerful strength and cooperation”. Public information shows that the financial company maintains fast development momentum this year. Due to more efforts in capital collection and deeper cooperation with banks and suppliers, the financial company realized annual income revenue around 296 million Yuan with 143 million Yuan net profit in 2015.
Besides that, CNS has been exploring more methods for combing finance with culture, and steadily pushing forward its development strategy of Two Combinations in a consortium style. “Our strategy is much clearer, that is, Two Combinations”, Chairman Gong Shuguang explained.
During the Thirteenth Five Year Plan period, the strategic goal of the financial company is to be a center for capital collection and management, a center for providing integrated financial service, a center for profit coordinating among industries.
Currently, the financial company makes different judgments from other giant financial companies based on the characteristics of cultural industry and its own understanding of the industry. Wang Libo said quite frankly, “the Group’s industries must be prioritized in the business of the financial company. Therefore, our financial support would be targeted and focused rather than peppers sprinkle. And in order to facilitate coordination among industries, the company should work with others. For instance, the fund company could expand its businesses beyond the business scope of the Group while the financial company involved in capital business of the Group. Only by doing so, can we genuinely build a good platform for finance, industries and business.
BOFO Fund Might Embrace Golden Period for Development
According to the development plan during the Thirteenth Five YearPlan period, the three carriages of CNS, financial company, BOFO Fund and the strategic investment department, would have different mission and expectations. But the general goal is the same, that is, to provide full financial services for investment needs at different development stages ofcultural industrybased on its features .
Long Bo, Vice GM of CNS and Chairman of BOFO Fund Management Co., Ltd., believes that the Fund could gain substantial achievements from businesses with traditional cultural companies. At the early stage, focus should be collecting cultural resources; in the middle stage, coordinating these resources by utilizing Internet as well as other tools and platforms; at the late stage, companies should be involved and form benign interaction among them. In the Twelfth Five Year development plan, CNS drew a blueprint to build an ecological closed-loop of the cultural industry: the financial company for investment on bonds and notes, the strategic investment department for merger and acquisition of resources and products needed for core businesses, BOFO for equity and creditors investment. What position BOFO would be put during advancing the Two Combination strategy? Long Bo informed REDNET, “the Fund and the fund management company will play three roles. The first role is a powerful collector. The Fund would be the collector of both domestic and international cultural resources including TMT and overseas companies. The second role is a pushing hand. The Fund would push the industrial coordination of the Group and the coordination among acquired companies and other parts inside the Group. The third role is a trader. The Fund and the fund management company will seek the objects based on CNS’s advantages and the advantage from unique PE+listed company mode”. Public information shows that BOFO Fund will place key investments to fields that enjoy coordinating effects with the businesses of CNS, mainly cover the industrial chains of digital media, publication and distribution, films and television, music, cartoon and animation, cultural, sports, education and new media.