3 years ago, Nasdaq-listed company AirMedia announced to sell 75% equity interest of AM Advertising for a consideration of RMB2.1 billion in cash, the buyer was Beijing LongdeWenchuang Fund Management Co., Ltd and Beijing Cultural Center Fund under Beijing Municipal Cultural Center Construction and Development Fund Management Co. Ltd. Ji Lianqiang, then-general manager of Beijing Cultural Center Fund, officially took over AM Advertising.

Even with years of investment experience, Ji Lianqiang still faced numerous challenges after taking the helm. Competing with complicated media resources, how AirMedia will set sail again after changing hands? What other big movement will this sophisticated investor make in the investment circle? At 2018 Grand Ceremony of China Entrepreneurs and Investors, Ji Lianqiang joined iAsk Leaders and shared his views with Gloria Ai about the new future of investment in culture and technology industry.

Has the AirMedia acquisition case unveiled the story of a young wanderer ?

The acquisition of AirMedia is the first "big event" that the newly-founded Cultural Centre Fund has invested. Ji Lianqiang revealed his experience to iAsk Leaders.

"We acquired AirMedia two years ago with an underestimated asset value. There is a very interesting phenomenon in the media industry. The traditional media was in decline and vanished, the new media was not developed, where did the advertising fee go? We made a bold bet that it might go to the scarce outdoor advertising. When AirMedia’s tender documents showed up in front of me on June 1, 2015, we made the decision within two days on June 3. Of course, we had a good fight with the investment committee before making the investment. Everybody said the price was too high, the actual value was over-estimated. But I questioned all the committee members at the meeting, what does 75% mean? It means you are the owner, you are the boss. So the question was not whether the price was high or not. The thing you had to do is to double or quadruple the price at which you bought it, rather than tossing around whether it was worthy or not.

In retrospect, Ji Lianqiang's team made this judgment for two reasons:

The first reason was the promising situations in the domestic capital market. In 2015, nearly 30 Chinese companies listed on US stock market announced privatization, many of them hoped to return to the domestic A-share market. AirMedia was one of them, which created a good opportunity for the acquisition.

Secondly, the business analysis of AirMedia showed that the company’s aviation advertising was the most profitable and most developed sector. So, there was no doubt that it became a suitable target.

It turned out that Ji Lianqiang’s judgment was right. When people outside were still worrying about what path AirMedia would follow after changing hands, its market value has grown rapidly from 2.8 billion Yuan to 4 billion Yuan in 12 months. Nowadays, AirMedia has occupied 90% of the country's airport screen resources, covering more than 30 airports. It also has excellent traditional media resources in core airports, and its advertising revenue has leapt to the second place of the world.

People suddenly realized that the story of this young wanderer was just beginning.

Gloria Ai: what do you think are the key elements of operating a business?

Ji Lianqiang: actually if you want to do something, you won’t do a bad job as long as you have the following four preconditions. First of all, you have money. Secondly, you've operated a relatively good business in the right headmost industry. Thirdly, you have an excellent team. And fourthly, you know how to promote your business in this new era. With these four conditions, you almost complete a closed loop and run a good enterprise.

Ji lianqiang, a financial cook who lifts the sedan chair?

"I am a financial cook who lifts the sedan chair. I think that financiers are the people who lift the sedan chair, entrepreneurs are the people sitting inside, and I cook better." This is the self-statement of Ji Lianqiang.

In the eyes of outsiders, he is the boss of AirMedia and a trader at the Cultural Center Fund. What makes people wonder is how this 1981-born idealist becomes a commander of clear strategies and effective tactics.

Before going to college, Ji Lianqiang liked painting. He thought design was the most advanced science. But under pressure from his parents, he eventually chose accounting.

"From the first day when I began to study accounting, I found out that I was no longer romantic." it was a feeling of helplessness. After he entered the industry, Ji Lianqiang found that the rule of the industry was very simple. In everyone’s life, there is both credit and debt, the credit and debit must be equalized. Therefore, he tried to forget his sensibility and be rational all his life.

Rationality is also the foundation of Cultural Center Fund’s corporate culture. At the start of the fund, Ji Lianqiang built an internal "think tank" team, the equivalent of an analyst team of other investment institutions. But what differed were that it was a team comprising of professionals in management, society and history, who had independent thinking abilities, cooperated with first-class research institutions at home and abroad and set up research subjects and made research reports from cultural, social, humanity and economic perspectives.

In specific operations, think-tank team, investment managers and risk control team would collaborate together, with think-tank providing directions and advices, investment managers analyzing the business model and feasibility, and risk control team inspecting compliance and financial model of the project. The three teams were associated, interactive and restrictive and integrated as a whole to realize the optimization of investment plans.

To maintain rational thinking and independent judgment is the attribute that Ji Lianqiang has defined to this undertaking.

Another label on Ji Lianqiang is "a post-80s entrepreneur and investor". The characteristics of entrepreneurs and investors are that they address both enterprises and investment, attach sufficient importance to both and integrate wisdoms from operating the enterprises into venture capital investment to realize the geometrical growth of wealth. In responding to this view, Ji Lianqiang's own evaluation is that "I am a hard-working entrepreneur and investor who is destined to find a balance across the boundary for a lifetime."

How to better combine these two identities? Ji Lianqiang shared his views with iAsk Leaders. On the one hand, he suggested to integrate and invest around the upstream and downstream of your industry, because in this fast-improving age, you don't know where the next industry integration will be, so you have to buy your own tickets and chips. On the other hand, you need to set a baseline of expectations when you invest, maybe you won’t get an excess return, but five years from now you're going to beat everyone.

iAsk• Proust questionnaire

Gloria Ai: are you satisfied with your present state?

Ji Lianqiang: OK.

Gloria Ai: is there any person you admire a lot?

Ji Lianqiang: my father.

Gloria Ai: which aspect do you think you are most capable of?

Ji Lianqiang: I have a sense of awe. And I know trade-off.

Gloria Ai: what do you hate most about yourself?

Ji Lianqiang: wasting time.

Gloria Ai: what do you hate most about others?

Ji Lianqiang: it’s the same, wasting time.

Ai cheng: what do you cherish most?

Ji Lianqiang: family love.

Gloria Ai: if one day you have to leave the world, how do you want to be remembered?

Ji Lianqiang: forget me.

If you invest in culture in the next decade, where are you going to invest?

Total asset of Cultural Center Fund led by Ji Lianqiang has reached to RMB100 billion. It is not difficult to get a project with quick value realization, but it is not what Cultural Center Fund is pursuing. In the view of Ji Lianqiang, the Cultural Center Fund is not simply a "start-up company", he summed it up as "A to O theory". To be specific, Cultural Center Fund is integrating different sources of capitals to build an all-around ecosystem from the early stage A to the later O round investment until the final IPO, based on the development stages of the project, and to complete the industry resources integration and restructure with the invested enterprise as the center of the circle.

Based on the "A to O theory", Cultural Center Fund has worked together with several leading industrial companies in China like Huace Media, Laiyin Sports, Qihoo 360, etc. and invested dozens of cultural projects like Huajiao Live Broadcast Company, Canwell Culture and Technology Company and has launched more than ten "A to O" funds.

Ji Lianqiang once said that "there is nobody who doesn't like culture”. And perhaps it is because of this fondness of culture that he chooses to take “A to O theory” as the theoretical basis and undertake the responsibility of cultural inheritance.

For the future, he remains a firm belief for investment opportunities in multi-cultural fields. “I hope in the next decade, the combination of technology and culture and the combination of artificial intelligence and culture would be the focus." He told iAsk Leaders that based on the strong ideological orientation that cultures exhibit, he thinks highly of “technology + content production”, along with the artificial intelligence, he believed the combination of the three would be very worthy of attention.

Gloria Ai: how do you think the media will change in the next 10 years?

Ji Lianqiang: First of all, I think the era of outdoor advertising will last at least for another 50 years. Furthermore, the future of terminal advertising has arrived, do not reject it.