Chapter 626: Devouring the Wife

Seeing Hua Yi's stock price plummet continuously from nearly eighty billion to just over forty billion, Big Wang and Little Wang were desperate to eat the Principal's flesh and drink his blood—this was outright oppression.

Its market cap has now been dragged down to the same level as Guangxian.

Even Guangxian today cannot match Hua Yi; the highest market cap now belongs to Wanda Film, reaching the hundred-billion level.

Think about how huge the bubble in the entire film industry market is.

This is policy-driven good news, coupled with the overall film box office market surging wildly—last year it didn't even reach thirty billion, but this year it might break through forty billion.

With such a massive market, capital is very optimistic about the future of the film industry, driving up the market caps of major film companies.

Hua Yi is one of the film companies with the fastest market cap growth, given its status as the leader in film stocks, while Yutu hasn't gone public.

But optimism aside, individual management matters—the film market is far from peaceful, with fierce encirclement from Yutu, Guangxian, Bona, and Wanda, plus pressure from online platforms like AiYouTeng.

The "Limit Foreign" trend has pushed these platforms to pour funds into domestic film and television content production.

And it's large-scale investment—inevitably impacting traditional film companies. Fang Hong isn't worried at all; let them strike—survival of the fittest has always been the rule.

People like Big Wang and Little Wang should've been eliminated long ago; they just got lucky riding the tide of the times, lacking ability, talent, and strategy, knowing only how to blacklist and being utterly lazy.

You could at least be hardworking—show up at eleven, circle around, then go back to nap. Yes, I'm talking about Big Wang.

If a person like this and a company like this don't collapse, how unfair is that to those working 996?

So Hua Yi is extremely unremarkable, hasn't properly focused on its core business, and has recklessly invested in all sorts of unrelated ventures—real estate entertainment, theme parks, games, esports, social media, finance—all dabbling.

And many of these are still in the storytelling phase.

For example, the theme park is telling Disney's story, aiming to build an "film + real estate entertainment + internet entertainment" ecosystem.

But the problem is, you haven't even made good films yet, and now you want to jump into real estate entertainment and internet entertainment—yet you have no IP.

Disney has a huge library of IPs.

And real estate entertainment is capital-intensive—theme parks require massive investment in construction and ongoing maintenance.

As for esports, Hua Yi is doing the same thing as Tencent and Chang'e—developing competitive games like "All People Gunfight" and "Peak Battleship."

It's also organizing mobile esports tournaments covering games like "All People Gunfight" and "Shadow Blade," and even developing esports hardware, launching the Hero Esports Phone.

Are these things even what Hua Yi should be doing? Xiao Wang only does live streaming and esports clubs.

Of course, Hua Yi is copying Fang Hong's film-game integration—but they don't integrate; they just do cross-promotion, because Hua Yi lacks the technical capability to truly integrate.

They just embed movies into games.

And they're going for full industrial chain control—Fang Hong only handles games and esports, controls the upstream, never deeply enters live streaming, and hasn't touched hardware at all. How did Hua Yi get such confidence?

Esports isn't just about game content—that's the source—but also includes live streaming, clubs, hardware manufacturers, and more.

And competition in esports is fierce—not only are Xiao Wang, Chang'e, and Tencent involved, but Alibaba is in too.

Xiao Wang is focused on live streaming and clubs; his Panda Live and IG are currently red-hot.

Alibaba is betting on StarCraft 2, aiming to merge esports with e-commerce—everything tied to e-commerce.

He can't touch Hero Glory or Honor of Kings—those are controlled by Chang'e, meaning he's at their mercy.

Tencent is laying out a full industrial chain, investing in Douyu, Huya, and VSPN, planning to launch another MOBA game to challenge Chang'e.

Esports isn't just about capital—Jay Chou, Lin Junjie, Yu Wenle, and others have all founded their own esports clubs; celebrities still have money.

Also, global top clubs like SoftBank and NBA stars have invested.

Esports has flourished globally thanks to Fang Hong's relentless push to develop the industry—he never charged any licensing fees domestically and supported live streaming platforms.

Basically, esports is still in its wild growth phase.

In truth, esports has flourished because professional esports players have all made money!

Once they make money, more people are drawn into the industry, driving its growth.

Even Shanghai plans to become an esports capital.

Esports is rooted in games—whichever game becomes popular controls the source; how it's played still depends on Fang Hong's decisions. At first, he only wanted to get the industry off the ground.

Hua Yi's film division is now weak; everything else is floating debris—if the film business collapses, its market cap will collapse with it.

Because like Alibaba, they always want to embed film into every sector—Alibaba wants to embed e-commerce into every sector; that's just their nature.

So now Hua Yi is a company that wants everything, tries to do everything, but fails at everything.

Recently, Fang Hong has been busy—not only actively pushing the "Limit Foreign" bill, but also wrapping up affairs related to Hua Yi.

His goal is to crush Hua Yi completely within this year, reducing it to a second- or even third-tier film company until it becomes utterly insignificant.

He learned that although Hua Yi is currently profitable, it's overall in debt—around 5.8 billion in liabilities, with a debt-to-asset ratio of about 41.5%, a relatively stable financial structure.

Financial problems arise only when debt reaches 50%.

Fang Hong's plan is to raise their debt ratio, slow their profit growth, until they explode.

In his past life, Hua Yi's debt was around 4.6 billion; this life, it's increased by 1.2 billion—partly due to Fang Hong's years of sustained attacks reducing profits, partly because Warner took about 500 million.

They're collaborating with Warner on film investments, but no one knows how Warner will handle that money—probably planning to swallow it whole, given Warner's nature.

Fang Hong doesn't actually want Warner to swallow it—he just wants to stall, to delay until Hua Yi explodes, then make Hua Yi use that money to pay off its debts.

By then, Hua Yi will have money but it won't matter—the holes are too big to fill.

Currently, Hua Yi is still a profitable company, with its main profit coming from online games—only a few hundred million, so we'll see what Hua Yi does next.

In the Oval Office, Fang Hong, Liu Tianxian, and Chen Zhixi are discussing matters.

"Hua Yi has made a new move—Feng Kuzi just founded a company called Dongyang Meila, and Hua Yi plans to acquire 70% of Feng Kuzi's shares for 1.05 billion—this is a shell company."

"The goal is to secure Feng Kuzi's future director contracts, to stabilize the stock market." Chen Zhixi just found out.

With its market cap crashing so hard, Hua Yi couldn't possibly make no move—other sectors are doing poorly, so they're using financial tactics to hold on.

Liu Tianxian listened and whistled inwardly—1.05 billion just for a shell company, just for a director contract? That's valuable? Then isn't she valuable too?

"It's not that simple, is it? Just a contract for one billion?" Fang Hong said.

"It's not that simple. Feng Kuzi promises that the net profit from his films over the next five years will be no less than 100 million, 115 million, 132 million, 152 million, and 175 million respectively—if it falls below these figures, he'll make up the difference from his own pocket," Chen Zhixi said.

That makes sense—it's a Betting Agreement. For the next five years, Feng Kuzi will be working for Hua Yi.

Feng Kuzi is still very valuable; at least Hua Yi could rise up, and this man played an indispensable role—those two brothers wouldn't even make a damn movie.

"He alone can't stabilize Hua Yi's ship," Fang Hong said.

No matter how powerful Feng Kuzi is, he can't stabilize Hua Yi—Hua Yi's operations are now too large; it's no longer a small company.

"Indeed, Hua Yi has decided to pay a huge sum to acquire the talent agency contracts of Li Chen, Da Baobei, Shaofeng, Zheng Kai, Du Chun, Chen He, and other stars. The exact amount is still unknown, but we know it's still a bet," Chen Zhixi said.

Fang Hong fell silent, thinking about how Hua Yi had operated with those stars in his past life.

Hua Yi paid 756 million to acquire 70% equity of Dongyang Haohan Film & Entertainment Co., Ltd. —this company was founded one day and immediately acquired by Hua Yi, clearly just to serve as a vehicle for this deal.

It was still a shell company; those stars promised that starting in 2015, the company's net profit would not be less than 90 million, and its annual net profit growth rate would not fall below 15% until 2019.

It's already August now; Fang Hong remembered this deal happened in October, meaning those stars made Hua Yi 90 million in just three months.

Next year, they must make Hua Yi 135 million, shared among a few stars.

This bet shows how incredibly rich stars are—they make more than damn public companies; 90 million net profit in three months.

Net profit means profit after deducting team costs, taxes, and many other expenses.

Whether taxes were evaded? Unknown!

This is roughly the same profit Feng Kuzi needs to create, and it will need to be even higher going forward—but Feng Kuzi is a creator of film content.

These stars need Hua Yi to provide resources; they rely solely on their own fame—the nature is quite different!

"What's their purpose in doing this? What benefit does it bring Hua Yi?" Liu Tianxian asked involuntarily.

She had just silently calculated: Hua Yi paid 1 billion to acquire Feng Kuzi's company, but Feng Kuzi only needed to deliver 674 million in net profit over five years.

Isn't that still a loss of hundreds of millions?

"Of course there's benefit—it uses capital methods to boost the company's market value, attract capital attention. Paying a billion to acquire proves the company is worth a billion—so can't the parent company's valuation rise further?"

"Most importantly, it locks in star resources. The bet shifts risk onto the stars or directors, securing the company's financial statements—public companies all look at statements."

"They must make money; if they don't, they pay the difference out of their own pockets. The one-billion profit I just mentioned is just the minimum standard," Chen Zhixi explained to her.

"This is what's called a bubble—the stars and films are now being financialized; they no longer earn money through traditional means," Fang Hong added.

Liu Tianxian nodded, as if understanding a little: net profit of one billion, but perhaps they made several billion—this was just the minimum standard.

And with one billion net profit, the market value could be pushed up by several billion—they profit on both sides, because if they lose, the stars must pay the difference out of their own pockets.

"Hey!" Fang Hong nudged her soft white arm—she was wearing a short-sleeved shirt, exposing her arms.

Liu Tianxian turned her head, her almond eyes puzzled as she looked at him.

"Look, any star can form a company and get capital coming in with hundreds of millions to buy it—think about how valuable you are," Fang Hong smiled.

"So you want to sell me for cash, right?" Liu Tianxian glared.

She could earn hundreds of millions a year too; if she signed a bet under that standard, she alone could be sold for one or two billion.

"How could I? Seeing you, I just feel inexplicably at ease," Fang Hong patted his chest, looking perfectly calm.

"What do you mean?" Liu Tianxian didn't understand.

"If one day I fail at starting a business and am buried in debt, I can just rely on my wife," Fang Hong laughed.

"You really have ambition—others rely on their parents; you rely on your wife!" Liu Tianxian said.

"No parents to rely on? Then I can only rely on my wife," Fang Hong laughed "ha ha."

Liu Tianxian raised her tiny fist and playfully tapped his arm twice.

This intimate gesture made Chen Zhixi smile mysteriously.

(End of Chapter)