On September 4, 2025, Shanghai Film Co.,Ltd. (601595) announced the completion of its acquisition of a 19% stake in Shangying Yuan (Shanghai) Cultural Technology Development Co., Ltd. The total acquisition amount reached 66.215 million yuan, increasing Shanghai Film's shareholding in Shangying Yuan to 70%.
The evaluation report shows that the total shareholder equity value of Shangying Yuan was assessed at 349 million yuan, representing an appreciation rate of 314.43% compared to its book value of shareholders' equity. This stands in stark contrast to Shangying Yuan's performance in the first half of 2025, with revenue and net profit of 40.0634 million yuan and 13.0976 million yuan respectively, declining 37.45% and 38.10% year-over-year.
**Paradox of High Valuation and Declining Performance**
Shanghai Film's acquisition can be described as "sparing no expense." According to the announcement, the company paid Shanghai Film Group 48.79 million yuan to acquire a 14% stake and paid Shanghai Animation Film Studio 17.425 million yuan for a 5% stake.
This transaction corresponds to a total shareholder equity valuation of 349 million yuan for Shangying Yuan, while as of the end of 2024, Shangying Yuan's book shareholders' equity was only 84.09 million yuan.
This means Shanghai Film offered an appreciation rate of up to 314.43%, far exceeding market averages. Such high valuation premiums are typically based on expectations of rapid future performance growth, yet Shangying Yuan's actual performance has gone in the opposite direction.
**Shadow of Past Glory**
Shangying Yuan has not always performed poorly. In 2023, Shangying Yuan's revenue and net profit were 79.7819 million yuan and 20.9414 million yuan respectively, reaching 93.8652 million yuan and 27.502 million yuan in 2024, with year-over-year growth of 17.65% and 31.33%. These figures became important justification for Shanghai Film's high-priced acquisition.
However, the significant decline in performance in the first half of 2025, with revenue and net profit falling 37.45% and 38.10% year-over-year respectively, has cast a heavy shadow over Shangying Yuan's future.
**Reality of IP Strategy Challenges**
As the implementation entity of Shanghai Film Group's major IP development strategy, Shangying Yuan owns copyrights to 60 classic animation and film works including "Calabash Brothers" and "Black Cat Detective."
The company previously claimed to continuously expand IP influence through licensing partnerships and gaming collaborations. In 2023, Shangying Yuan's licensing partnership projects generated over 6.78 billion in online buzz.
However, IP popularity has failed to consistently translate into stable revenue. The performance decline in the first half of 2025 indicates that the path to IP monetization is not smooth, and over-reliance on licensing partnership models may lack sustainable growth momentum.
**Shanghai Film's Predicament**
Shanghai Film itself faces performance pressure. In the interim period of 2025, the company achieved revenue of 362 million yuan and net profit attributable to parent company of 53.76 million yuan, declining 4.96% and 22.18% year-over-year respectively, showing less than ideal performance.
The company's 2024 operating revenue was 690 million yuan, down 13.19% year-over-year; net profit attributable to parent company was 90.0471 million yuan, down 29.08% year-over-year.
Against this backdrop, spending heavily to acquire a subsidiary with declining performance raises questions. After the acquisition completion, how to integrate resources and improve performance becomes an urgent issue for Shanghai Film.
With Shanghai Film's main business facing pressure, choosing to acquire a subsidiary with obvious short-term performance decline at a high premium undoubtedly increases future operational risks.
The capital market has already reacted: Shanghai Film's current price-to-earnings ratio is as high as 132.4 times, with valuation levels far above industry averages.
Although Shangying Yuan has content reserves such as "Chinese Tales 2" and "Little Monster's Summer," whether these contents can reverse the declining performance trend remains unknown in an increasingly competitive IP market environment.
Shanghai Film's acquisition represents a high-risk gamble, betting on long-term IP value, but the significant short-term performance decline has already sounded alarm bells.
(Note: This article incorporates AI tools and does not constitute investment advice. Markets carry risks, and investment requires caution.)
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