Cultural media revenue accounts for only 1%, the former "film and television giant" plans to acquire a million-kilowatt thermal power plant

On the evening of February 12th, Zhongnan Culture (002445.SZ) announced a suspension of trading regarding its plans for a major asset restructuring. The company intends to acquire a thermal power plant with a capacity of one million kilowatts and raise supporting funds. The company states that it expects to disclose the transaction plan within no more than 10 trading days. This acquisition may signify that the company’s core business will further focus on “manufacturing + energy,” and this former “film and television giant” will gradually distance itself from the cultural media industry.

The acquired power plant has a total installed capacity of 1.215 million kilowatts

Zhongnan Culture announced that it is planning to purchase controlling interest in Jiangyin Sulong Thermal Power Co., Ltd. (hereinafter referred to as “Sulong Thermal”) through issuing shares and paying cash, along with raising supporting funds. According to the “Management Measures for Major Asset Restructuring of Listed Companies” and other relevant laws and regulations, this transaction is expected to constitute a major asset restructuring and a related-party transaction, but not a reorganization or listing. Due to uncertainties regarding the relevant matters, and to protect investors’ interests and avoid significant impacts on the company’s securities trading, Zhongnan Culture has suspended trading starting from the market opening on February 13.

Public information shows that Sulong Thermal is a large energy enterprise mainly engaged in power and heat production and supply. The company has a registered capital of 2.4 billion yuan, with Jiangyin Electric Power Investment Co., Ltd. as its controlling shareholder. It is regarded as a “benchmark power plant” in Jiangsu Province’s electric power industry. Sulong Thermal has built six coal-fired generating units with a total installed capacity of 1.215 million kilowatts. In recent years, the company has actively expanded into new energy fields such as offshore wind power and photovoltaics, with wind power rights capacity of 450,000 kilowatts. In 2025, the company was approved to build a four-phase 2x660MW high-efficiency clean coal power expansion project, which uses ultra-supercritical reheat unit technology, and is planned to be operational by 2027 with an annual power generation capacity of up to 6 billion kilowatt-hours.

According to the announcement, Zhongnan Culture has signed a “Share Acquisition Intent Agreement” with Jiangyin Electric Power Investment Co., Ltd., the controlling shareholder of the target company. The agreement stipulates that the company will purchase the target company’s equity through issuing shares and paying cash. The final price will be based on the valuation report issued by an appraisal agency qualified under the “Securities Law of the People’s Republic of China,” and will be negotiated by both parties. The above agreement is a preliminary intention for the transaction. During the suspension period, the transaction parties will actively negotiate, and the specific plan will be formalized through a separate agreement.

The former “film and television giant” gradually distances itself

Zhongnan Culture was originally a manufacturing enterprise that experienced a “fork in the road” during its development. In 2013, Zhongnan Heavy Industry (the company’s original name), which mainly engaged in metal pipe fittings manufacturing, restructured by acquiring Datang Glory Media Co., Ltd., entering the cultural industry. It also co-founded a merger and acquisition fund with Zhongnan Group and Zhongzhi Capital as a platform for integrating the cultural media industry. Subsequently, Zhongnan Heavy Industry began frequent acquisitions of companies in the film, television, and gaming sectors, and officially renamed itself Zhongnan Culture in 2016.

From 2015 to 2017, this listed company, fully named Zhongnan Hong Culture Group Co., Ltd., saw net profits rise from 140 million yuan to nearly 300 million yuan. During that year, it participated in blockbuster films such as “Dying to Survive” and “Brotherhood of Blades 2,” enjoying great popularity. By 2018, the company had planned other cultural industry acquisitions, but some of these reorganizations were hindered or terminated due to market conditions, internal control issues, or litigation.

In the same year, 2018, Zhongnan Culture experienced a huge loss. Its annual report showed that the company achieved operating revenue of 970 million yuan, a year-on-year decrease of 36.4%. Revenue from the cultural entertainment sector was 362 million yuan, down more than 60%, and its proportion of total revenue dropped from 64.74% in 2017 to 37.36%. Its net profit was -2.1 billion yuan, a year-on-year decline of 817%. Subsequently, the company was close to delisting and bankruptcy.

Between 2020 and 2021, after restructuring and operational recovery, Zhongnan Culture refocused its main business on machinery manufacturing, including pipe fittings, flanges, pressure vessels, etc., while still maintaining some cultural media operations, forming a “manufacturing + cultural media + new energy” business structure. The third-quarter report of 2025 showed that last year’s first three quarters, Zhongnan Culture achieved operating revenue of 910 million yuan, a year-on-year increase of 40.10%, and net profit attributable to the parent of 82.2257 million yuan, up 130.97%. However, the same period’s net profit excluding non-recurring gains and losses was only 43.2318 million yuan, down 33.69%. In the first half of 2025, the company’s cultural media sector generated revenue of 5.6954 million yuan, accounting for only 1.02% of total revenue.

Notably, during an investor relations event on November 4, 2025, an investor asked when the asset injection promised during the restructuring (reorganization) would be implemented, and whether the company’s main business and name are mismatched, and if there are plans to change the name. Zhongnan Culture responded that the company will strictly disclose information according to relevant requirements, and if the disclosure standards are met, it will fulfill its obligation to disclose information in a timely manner. Regarding the company’s name change, the company will consider it prudently based on strategic development plans and business needs.