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Lin Ling: M&E Investment, Changes Often Happen

2019.11.30 Su Wen Views:

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“New contents and forms of the M&E industry can find traces in the past. They are embodied by new ways of consumption through new media.”

Lin Ling: M&E Investment, Changes Often Happen


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Lin Ling, one of first investors who kept his eyes on the M&E industry, cultivated 100X-return projects like Everyday Network (300295.SZ) and influential companies like Huashang Media Group, Motie, Omnijoi (300528.SH), SilkroadCG(300556.SH), Original Force, Ergeng, MeWe Media and Spiritual Wealth Club. Being in the competition for 16 years, he has gone through the rise and the fall of M&E industry. He is still confident about the way ahead of this industry. This explorer as well as an alchemist has developed a set of mature investment philosophy. He divides M&E companies into the following three types:

  • First, technology-based companies. These companies normally possess core industrial technologies which enable them to offer exceptional services of cultural and creative products and social media like animation, special effect and VR. The best demonstrations are SilkroadCG (300556.SH) and Original Force.

  • Second, platform-based companies. These companies will first draw high volume through online and offline measures, create their own business ecological systems and then gain profits from their platforms. Firstly, an excellent platform should possess big amounts of content providers and consumers with strong buying power. Secondly, the platform should generate ways of converting contents into cash or introducing the consumers to other profitable channels. Thirdly, the platform should create some barriers and thresholds to secure its originality and competitiveness. Huawen Media Group (000793.SZ), Everyday Network (300295.SZ) and Ergeng are strong proves.

  • Third, content and IP-based companies. A hit IP is rare, but contains enormous economic potential. However, the sustainability and structure of an IP should be taken into consideration. CoStone normally values streamlined content production. In other words, the quality content can be produced regardless of individual capability, wills, experience and exterior factors. The factory-like production model, long adopted by Hollywood, can reduce risks on M&E investment. Omnijoi (300528.SH), MeWe Media, Spiritual Wealth Club, lrts.me and Vancools demonstrated it.

Lin Ling concluded, “New contents and forms of the M&E industry can find traces in the past. They are embodied by new ways of consumption through new media.” He indicated two important concepts – technology and channels shift. As the Internet, the mobile Internet, 4G and 5G are widely applied, more forms and communication channels of contents are created. “We should focus more on the relationships between technological advancement and find opportunities to bring contents closer to consumers. Because it is nurturing many quality M&E projects and sound investment” he added.

 

Above: Excerpt of the interview with Lin Ling from Manager. Please refer to the link below to view the interview in full: http://stonevc.com/news_view.aspx?TypeId=5&Id=795&Fid=t2:5:2

Rewritten by: Luo Xinying, Edited by: Du Zhixin, Wei Yiyi

 

 

The year 2019 marks the fortieth anniversary of China’s Reform &Opening-Up, once again, we meet at the turning point of history. What’s the next step for the game, is there any clear guidance? The answer is affirmative.

Our country is enjoying a good momentum of development, which does not come from the Washington Consensus nor the Beijing Consensus. China’s experience has proved that both the visible hand and the invisible hand are crucial: the visible hand, stands for the government-led reform, and would yield benefits for reform and opening up; the invisible hand, stands for the Marginal Power represented by the private sector, and would improve economic efficiency and tax collection, create jobs and employment opportunities.

Provided that we want to protect and expand the benefits form reform, three simple but mandatory agreements are to be made and followed: No.1 Private ownership must be recognized, protected and treated equally with public ownership constitutionally, both ownerships are scared and inviolable;No.2 Make further clarification of the principal position of market economy, “deepen economic system reform by centering on the decisive role of the market in allocating resources”, as President Xi addressed in the third Plenary Session of the 18th CPC Central Committee;No.3 Implement the guiding principles of “comprehensively promoting law-based governance” of the fourth plenum. The rule of law is essential for economic growth, irreplaceable to protect private ownership, and necessary to encourage innovation and entrepreneurship.

Above are three rules for us to avoid falling into the Middle-income Trap. Assuming that we are breaking systematic barriers to private enterprises’ participation in market economy, and boosting innovation and entrepreneurship of our society, then we are heading towards a promoting direction. We are marching in the path of light, regardless of the ups and downs of Sino-US relationship, the drop in GDP growth rate, or the monetary policy.

These principals also apply on knowing how better to run a business: don’t be hedged by rules and regulations at the beginning, pay more attention to your survival, and you’ll learn more when you start your second business.

For many years, Huawei has been the only Chinese company on the list of the Top 50 R&D Spenders. Regardless of the economy and its income, what Huawei has been doing is investing in its future, dedicated to R&D, continuously and resolutely. This provisional work underscores Huawei’s accomplishments, makingHuawei anindustry leader.

So, there are standard answers on how to run a company,which could be summarized as concentration and professional dedication, continuous investment on innovation and trying harder in R&D. Entrepreneurship is also important, every single company needs entrepreneurs to push aside all obstacles and difficulties, to implement strategies and ideas. We, as investors, are destined to look for such outstanding entrepreneurs and their companies, invest in them and partner with them.

At this key point of history, a country, a company, or asingle individual, will all need to find the right path. Four decades after the Reform and Opening-up, it’s time to learn from our experience and stop “wadding across

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