An Analysis Of Capital Opeartion On The Culture And Media Industry

Capital operation is an effective way of industry integration andupgrading. Judging by its different means, capital operation can becategorized into horizontal merger, vertical merger and conglomerate.The former aims to expend while the latter focuses on integrating thewhole industrial chain. Judging by its effect, some pursue the operationsynergy while others focus on financial synergy. Judging by itsapproaches, traditional acquisition, joint-venture and merger based onasset and liability gradually develops into reverse acquisition andgambling which are based on profit and liquidity. This transition is morepopular in the culture and media industry which relies heavily on people'screative ideas and unique operation pattern. The paper tries to point outthat capital operation plays an important role in integrating industrialchain, constructing operation pattern as well as improving the profit making ability of the company.This thesis first analysed the historical development of the culturaland media industry horizontally, giving the whole picture of the industryand the specific historic phase of capital operation. Secondly, it explainedhow the industry should develop itself beyond the manufacture operation,and grow stronger through capital operation. Thirdly, the paper analysedthe growing process of first video company–a Hongkong-listed publiccompany (HK0082),which successfully used capital operation from IPO,mergers&acquisitions to splitting. By studying gambling and othercapital operation means in the process, the paper aimed to show how asmall company grows into a more competitive one by using indirectfinancing, M&A of upstream and downstream industries and other capitaloperational means to make profit in the shortest time.It is hoped that this paper can evoke some thoughts on thefast-growing cultural and media industry in China, that while developingits mainstay, the industry has to take further step to gain its corecompetitiveness through capital operation. The future belongs to one whocan make the combination of the process of manufacturing and capitaloperation.