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Jiang Toon animated by possible listing on GEB

By Zhou Lihua and Chen Limin (China Daily)
Updated: 2009-09-30 08:52

Public float will give Jiang Toon Animation a shot in the arm for its growth. [China Daily]

Jiang Toon Animation, like many other companies, has expressed animated interest in listing on the fast-approaching NASDAQ-like Chinese growth enterprise board (GEB).

Founded in 2000 with a start-up fund of 15 million yuan, it has grown from an obscure company to one with considerable market clout.

In 2008, its sales reached 130 million yuan, with total assets of 200 million yuan.

Zhu Youlan, founder and chairman, started the business with her friends out of a keen enthusiasm for animation. Inspired by the popularity of Pig Guy, a main character in the Chinese classic "Journey to the West", Zhu set out developing a Pig Guy cartoon series immediately after founding the company.

Her initial enthusiasm, however, ended in great disappointment.

"It cost 20,000 yuan to produce just one minute of the cartoon series, but TV stations offered us only 1,000 yuan per minute as their broadcast fee," said Zhu, recalling the unexpected setback.

That was in 2000 when foreign cartoons dominated the Chinese cartoon market. By selling cartoon series to TV stations at very low prices or even charging nothing, foreign companies occupied most of the market share and then made profits from selling spin-offs.

"We couldn't die before realizing our dream," said Zhu, who then decided to save the enterprise by providing outsourcing services for foreign companies.

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"We visited all kinds of animation festivals to find business partners," Zhu added. The company even took a losing proposition at the very beginning with the hope of winning a partner.

In shifting its focus to outsourcing activities Jiang Toon Animation set up offices in France and the United States and bought a Chinese animation company with overseas resources.

Now Jiang Toon's outsourcing business is worth $10 million every year, making up a large proportion of the company's overall revenues.

"By taking outsourcing orders, we survive and, more importantly, we've learnt from others how to develop original cartoons and how to run the business," said Zhu.

In 2004, the government drew up policies to encourage the development of the animation industry. Jiang Toon, as the largest animation base in Hubei province, got much support from the provincial government. It was then that Zhu's long-dreamed-of Pig Guy cartoon began to take off. In the next year, "Happy Lucky Piggy" came out and was soon a hit.

Now the company's annual production capacity is around 5,000 to 10,000 minutes, making it one of the biggest cartoon makers in China.

Zhu hopes a GEB listing will help her to further develop her company. "We would use two thirds of the funds raised to make original cartoons and the rest to do product research and development and enlarge our production capacity," said Zhu, without disclosing how much she would like to raise from the possible listing.

"We will gradually focus more on copyright granting, spin-off selling, and animation-related investment in the following five years," said Zhu. The company has a branch in Guangzhou, which is responsible for spin-off development.

"The Chinese animation industry has entered its golden age and we will make the most out of it," said Zhu.