Long Yun Co. Announces Strategic Acquisition of Yuheng Media Group

On February 6, 2026, Shanghai Long Yun Cultural Creation & Technology Group Co., Ltd. (stock code 603729) announced a major restructuring plan that will see the company acquire a 58 % stake in Xinjiang Yuheng Media Group (愚恒影业) through a share‑issuance transaction. The deal is expected to complete on February 9, when the company’s shares will resume trading following a temporary suspension.

Deal Structure and Valuation

  • Acquisition Method: Long Yun will issue new shares to Shanghai Bing Ming and Duan Zekun, the current holders of the 58 % stake in Yuheng Media.
  • Target Valuation: Preliminary assessments place the value of Yuheng Media between 4.5 billion CNY and 5.3 billion CNY. The final purchase price will be confirmed by an independent valuation report once the audit of the target is completed.
  • Resulting Ownership: Upon completion, Yuheng Media will become a wholly owned subsidiary of Long Yun, expanding the group’s portfolio into the full content‑production chain.

Strategic Rationale

Long Yun, known for its television advertising media agency and overall design services, has historically operated primarily as a service‑provider within the media sector. The acquisition represents a deliberate shift toward content production and distribution:

  • Vertical Integration: By owning a production house, Long Yun can move beyond fee‑based advertising into content‑value and marketing revenue streams.
  • Synergy Leverage: The two companies already share client bases and operational overlap. Full integration is projected to unlock additional synergies that will drive operational efficiencies and enhance revenue diversification.
  • Industry Trend Alignment: The Chinese media landscape is increasingly consolidating, with advertising agencies expanding into original programming to capture higher margins. Long Yun’s move aligns it with this broader industry trajectory.

Financial Snapshot

  • Market Capitalisation: Approximately 1.65 billion CNY.
  • Price‑to‑Earnings Ratio: -28.71, reflecting the company’s loss‑making status and high operating leverage typical of media‑service businesses.
  • Recent Close Price: 17.85 CNY (as of 2026‑02‑04).
  • 52‑Week Range: 12 – 18.74 CNY, indicating modest volatility within the broader market.

Implications for Investors

The restructuring is classified as a material asset‑restructuring and a related‑party transaction, requiring careful monitoring of post‑deal financial performance. Key points for investors include:

  • Capital Structure Impact: Issuance of new shares will dilute existing equity holders unless the acquisition is financed through an efficient capital structure that balances risk and growth potential.
  • Revenue Diversification: Transition from a single‑service fee model to a dual‑stream model (content creation plus advertising) may improve long‑term earnings resilience.
  • Regulatory Oversight: As a public company listed on the Shanghai Stock Exchange, Long Yun will need to adhere to stringent disclosure and governance standards throughout the transaction and integration phases.

Conclusion

Long Yun’s announced acquisition of a majority stake in Yuheng Media marks a pivotal evolution from a traditional media‑service provider to a vertically integrated content‑producer. The move, set to complete in early February, positions the company to capture higher margins and diversify revenue in a rapidly consolidating Chinese media market. Investors and market observers will closely watch how the integration unfolds and how it influences Long Yun’s financial trajectory in the coming fiscal periods.