We expect the company to have a revenue of 3.293 billion yuan (YoY+141.1%) and a net profit of 383 million yuan in 2021. As the prevention and control of the domestic epidemic tends to be stable, and the enthusiasm of the audience continues to recover, we are optimistic about the positive trend of the film market for the whole year. Cat's Eye, as the leader of film ticketing and publicity, is expected to usher in a more deterministic performance repair. We are optimistic about the value and potential of the company to grow into a platform company in the film industry chain, giving the company a target price of HK $16 and maintaining a "buy" rating.

The film market will enter a recovery period in 2021, and the company's revenue is expected to achieve high growth for the whole year. As the control of the epidemic tends to normalize, the domestic film market as a whole is in a state of recovery. In 2021, the box office of the film was 47.26 billion yuan (State Film Administration), an increase of 131.5% over 2020 and 73.5% in 2019. Cat's Eye, as the leader of domestic film ticketing and promotion, is expected to increase with the market in 2021. We estimate that the company's revenue in 2021 will be 3.293 billion yuan (YoY+141.1%), of which online entertainment ticketing services / entertainment content services / advertising services and other services will generate revenue of 1.728 billion yuan, 268.4% and 3.1%, respectively, compared with the same period last year. The company's gross profit margin in 2021 is estimated to be 54.5% (YoY+15.1pcts). The estimated sales / management expense rate is 21.1% YoY-14.5/15.5pcts 10.4% respectively. Considering that the epidemic still has a certain impact on the film industry chain, the financial asset impairment of 2021H1 Company in 2020 is 418 million / 42 million yuan respectively. For the sake of prudence, we estimate that the company's financial assets for the whole year of 2021 will be impaired by 262 million yuan. The company is expected to return to the mother of 383 million yuan in net profit, corresponding to 11.6% of the return net interest rate (YoY+59.0pcts).

The leading position of ticketing and publicity is stable, and the content investment continues to be diversified. As a platform enterprise with film and television content investment production, publicity and ticketing services, advertising and derivatives services, the company occupies more than 60% of the domestic film online ticketing market share. In terms of publicity and distribution services, with the support of big data, the company continues to deepen the intelligent publicity product system, create an one-stop distribution capability of the whole network, achieve the service coverage of leading cinema projects in the industry, and further expand its promotion advantages; in terms of content investment, the company continues to dig deep and expand the field of content, and participated in the production of a number of key films, including "Hello, Li Huanying", "famous Liwan", "serious case of anger" and other key films. Looking forward to 2022, the company's self-developed films such as "Flame on the Plain", "three expensive Love History" and "Genius Games" are expected to contribute high reputation and popularity.

Yunji Inc, a good film for the Spring Festival in 2022, the film market is expected to get off to a good start, and is optimistic about the stable recovery trend of the market throughout the year. According to Cat's Eye Professional Edition, "Watergate Bridge of Changjin Lake", "Miracle stupid Kids", "four Seas"

Wait for 8 films to be scheduled for the first day of the Lunar New year. During the Spring Festival in 2022, Cat's Eye participated in the production and distribution of films such as "the four Seas", "this Killer is not calm" and "Bear haunts". We believe that as the prevention and control of the domestic epidemic tends to stabilize and the enthusiasm of the audience continues to recover, the film market for the whole year of 2022 is expected to continue to develop.

With the further consolidation of the trend of online ticketing rate of films in China and the continuation of the dominance of Maoyan market, Maoyan is expected to benefit from being the leader of film ticketing and publicity.

Risk factors: the duration and degree of the epidemic exceeded expectations, the repair of the film industry chain did not meet expectations, the repair of advertising did not meet expectations, and the return on content investment fell short of the expected risk.

Investment advice: as the domestic epidemic prevention and control tends to be stable, film and television content production and development resume smoothly, we expect the film market to continue to recover in 2022. Considering that the cinema market will continue to be affected by the sporadic epidemic, and it will take time for the market to recover to 2019, we have lowered the company's 2021E~2022E revenue forecast to 3.893 billion yuan (the previous forecast is 4.769 billion yuan) and introduced 2023E revenue forecast of 4.463 billion yuan. Taking into account the slower-than-expected recovery process of the box office in the film market, the improvement of the expense rate brought about by the reduction of ticket replacement, and the potential impairment pressure of financial assets, we downgrade the company's 2021E net profit forecast to 383 million yuan (the previous forecast value is 386 million yuan). Raise the company 2022E net profit forecast to 763 million yuan (the previous forecast value is 735 million yuan), introduce 2023E net profit forecast 922 million yuan. In the long run, we are still optimistic about the company's dominant shareholder resources, full-text entertainment strategy and the value and potential of growing into a platform company in the film industry chain. The company's current stock price corresponds to 25.0x/12.5x/10.4x in 2021-2023, respectively. We refer to the valuation level of Light Media and Wanda Film, the head of the film industry chain, and combine the niche of the industry chain where the company is located. We give the company 2022E 20x target PE, corresponding to the target price of HK $16, and maintain a "buy" rating.