In 1997, Guo Jingyu, newly minted as an assistant director, was enthralled by the wonders of a new video-editing software. However, the use was not cheap: RMB100 per hour of footage. Also, the budding filmmakers had to fiddle with the software themselves in the clunky editing suite instead of having someone do it for them.
Nevertheless, the technology deeply impressed and inspired Guo, who was then in his twenties. In the two decades since, he has remained curious about technological developments and the potential they hold for motion pictures. “We have a company-wide philosophy that’s close to my heart: we will always stay open to new things,” says Guo in an interview with The Edge Singapore.
That’s certainly true for Guo himself. As director, his remake of the 2008 Mediacorp hit series, The Little Nyonya, was released on streaming platform iQiyi earlier this year. Also, Guo is moving from one director chair to another — this time in the boardroom. Now, the Singapore-based GHY Culture & Media, of which Guo is executive chairman and group CEO, is planning a listing on the Singapore Exchange (SGX).
Close partnership
On Dec 2, the Cayman Islands-incorporated media production group lodged its preliminary prospectus. If successful, it will be the third non-REIT Mainboard listing on the SGX this year. GHY plans to use the proceeds to expand its concert, TV and film production business via investment in production, acquisitions, joint ventures and or strategic alliances, as well as for general corporate purposes.
“I feel Singapore’s market regulation is strict, and there is rule of law here,” says Guo. He reveals that he had briefly considered listing in Hong Kong, but settled on Singapore for a number of reasons.
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Firstly, he believes that the Southeast Asian film industry will heat up in the coming years, particularly in Singapore, spelling more market opportunities for his company. While Hong Kong is a bigger and more liquid market, by listing there, GHY will face stiffer competition in vying for investors’ attention.
Secondly, the company has shown an interest in Straits Chinese culture, which is unique to this part of the world. The Little Nyonya and another of the company’s recent production, The Ferryman • Legends of Nanyang, are both centred on Singapore and Malaysia. “I feel that getting our company closer to the source of this content and direction will be beneficial,” says Guo.
iQiyi, with which they have a close production-distribution partnership, has also set its sights on the region, says Guo. In November 2019, the Chinese streaming platform announced a strategic partnership with Malaysia’s cable provider Astro, which was extended on Dec 8 with the addition of original Astro content on iQiyi International.
“We want to expand together into the Southeast Asian market,” says Guo. “We do have plans for the future, including staging new variety shows and fostering variety show talent in these countries.”
In addition, GHY may one day tap its Singapore and Malaysia operations to expand into Australia. “We are not limiting ourselves to just Chinese artistes and filmmakers. Art has no boundaries. We hope to create world-class works that will serve as a bridge for culture,” says Guo, who is a China citizen.
Finally, Guo has weighed internal factors, such as the direction of GHY’s strategy, against external factors, namely, the market environment. “Between investment potential and company growth, company growth is more important. We feel that our company has better chances for growth in Singapore,” he says. “I think when assessing a country to do business in, you must also examine the nature and operations of your business. If your internal operations are not functioning well, then it doesn’t matter which market you enter — you will not succeed,” he adds.
The company’s earnings, due to the nature of industry, tend to be lumpy — the recognition of revenue and costs of productions are not always in sync. For FY2019 ended December, it generated revenue of $66 million, a surge from $3.4 million in the preceding year, as the company collected revenue from the sales of its productions.
FY2019 earnings came in at $12.4 million, compared to losses of $1.5 million. For 1HFY2020, the company generated revenue of $37.2 million, and recorded earnings of $13 million.
For 1HFY2020, television programme and film production accounted for 58.9% of revenue, compared to a full 100% of revenue in the preceding period. This was because the company had diversified into the concert promotion business, which accounted for 39.8% of revenue in the half-year. Guo notes that GHY has organised concerts for Jay Chou, a leading Mandopop idol. “Whether within or outside of China, we see ticket sales doing well,” he claims.
According to the company’s website, GHY was due to host Chou’s Carnival World Tour in Australia and Malaysia, among others, but the performances have either been cancelled or postponed because of the pandemic. A Singapore stop on Taiwanese singer Yoga Lin’s world tour, originally scheduled for Jan 30, 2021, and organised by GHY, was also cancelled in light of border closures.
“We also discussed organising concerts by American pop stars, but those talks have been affected by the Covid-19 border closures,” adds Guo.
China, however, has recovered enough from the spread of Covid-19 for concerts to boom once again. In October, GHY organised two concerts in Beijing. Besides film, TV and concert productions, GHY is also dabbling in talent management and costumes, props and make-up services, although these businesses have yet to make meaningful contributions with 0.4% and 0.9% of 1HFY2020 revenues, respectively.
For now, GHY does not have a fixed dividend policy, although it plans to pay dividends equivalent to at least 30% of its earnings for FY2020 and FY2021. This excludes the $10 million in interim dividends declared by the board on Nov 23.
Behind the scenes
Prior to establishing GHY, from 2011 to 2018, Guo was a producer, director and scriptwriter with Perfect World Co, which is listed on the Shenzhen Stock Exchange and engaged in similar production work as GHY. GHY was formed through the collaborative efforts of Guo Jingyu, executive directors Yue Lina and Wang Qing, and non-executive director Yang Jun Rong, with the help of the Singapore-based group adviser, John Ho.
In 2017, Ho and his spouse, Lian Lee Lee, incorporated Perfect World Pictures (Singapore), later renamed GHY Singapore, with Guo appointed as the sole director. Perfect World, through its subsidiary, Perfect Credit Pictures (Singapore), became a 60% shareholder of GHY Singapore in September 2017.
GHY Culture and Media was established in 2018 following a couple of other rounds of restructuring that saw additional partners coming on board, including Yang, who is a veteran music producer. Guo is now the largest shareholder with a 64% stake, while Yang, Ho, Lian and Perfect World hold 8%, 13%, 3% and 12% respectively.
GHY currently has a headcount of some 125 employees, along with close to 50 artistes. “In terms of production, we are a new team but with old teammates,” says Guo. “We’ve been in the industry for more than 20 years. We’re very strong in what we do.”
5G and film
With theatres shut for much of this year, the timing of the planned listing does seem less than ideal. Is Guo worried about the future of cinema and the industry? “Even without Covid-19, people were progressively migrating from cinemas to their devices, from movies to livestreams. Covid-19 only accelerated this migration,” he notes.
He points to Warner Bros.’ decision to close the window between a movie’s premiere in theatres and its release on streaming platforms. On Dec 3, the Hollywood studio announced that its entire 2021 slate of 17 films, including the fourth Matrix film, and the latest addition to the Godzilla franchise, will stream on HBO Max the moment the films open in theatres.
However, Guo, like many filmmakers, recognises the particular “magic” of theatres — the kind of viewing experience that only big screens and their professional audio setups can deliver. “I feel that cinema will not perish, but it will grow increasingly niche in its focus to offer elements that other formats cannot provide,” he says.
“It’s a mobile generation today. Anyone with a phone can create a personal film,” he adds. “I believe personal, relational content will be the future of cinema.”
On a wider scale, Guo believes the future of film will be aided by the widespread launch of 5G mobile networks, where high-definition video content can be effortlessly transmitted. “The biggest new film format will be interactive films, which stand in between film and gaming. They may grow exponentially both in China and around the world,” he says.
By experimenting with such multi-plot films, which let viewers choose what their character does in the narrative, Guo hopes to gain a first-mover advantage in the format — for he already has a track record in this industry, with both the technical artistry and artistic inclination. “When this new era formally arrives, any prior experience will become very important.”
