主营业务明显恢复，整体经营稳健。创作板块：1H23 公司主导或参与出品的电影覆盖率较高，其中春节档《流浪地球2》取得亮眼票房表现。1H23创作板块收入6.59 亿元，同比大幅增长。发行板块：1H23 公司共发行影片296 部，其中国产影片234 部，进口影片62 部。根据艺恩，截至8 月25 日，年初至今进口影片含服务费票房占比为17.3%，我们认为进口影片需求偏好仍未完全恢复。1H23 发行板块收入12.78 亿元，同比增长105.7%。放映板块：1H23 放映板块收入5.36 亿元，同比增长48.1%，且放映板块毛利率同比转正至15.2%，我们认为放映业务跟随市场大盘逐步复苏。科技板块，1H23 科技板块收入2.54 亿元，同比增长18.7%。我们预计下半年CINITY 新安装或加快，伴随CINITY 影厅增加，公司在高新技术格式影院中优势有望加强。1H23's performance met our expectations
The company announced 1H23 results: 1H23 revenue of 2,857 million yuan, up 88% year on year; net profit of 360 million yuan, a sharp increase over the previous year, falling into the predicted profit range of 280 million to 380 million yuan; net profit after deducting non-attributable net profit of 323 million yuan, a sharp increase over the previous year, falling into the range of 260 million yuan to 360 million yuan in the performance forecast, in line with our expectations. In 2Q23, operating income was 1,412 million yuan, a year-on-year increase of 146%; net profit of 179 million yuan from loss to profit year on year; net profit of 141 million yuan after deducting non-return net profit of 141 million yuan, changed from loss to profit year on year.
Development trends
The main business has clearly recovered, and overall operations are steady. Creative sector: 1H23's films led or participated in production had a high coverage rate. Among them, the Spring Festival “Wandering Earth 2” achieved impressive box office performance. The 1H23 creative sector had revenue of 659 million yuan, a significant increase over the previous year. Distribution sector: 1H23 has distributed a total of 296 films, including 234 films made in China and 62 imported films. According to Yi En, as of August 25, imported films accounted for 17.3% of the box office year to date, including service fees. We believe that demand preferences for imported films have not fully recovered. The 1H23 distribution segment had revenue of 1,278 million yuan, an increase of 105.7% over the previous year. Screening sector: 1H23 The revenue of the screening sector was 536 million yuan, an increase of 48.1% over the previous year, and the gross margin of the screening sector was adjusted to 15.2% year on year. We believe that the screening business followed the gradual recovery of the general market. In the technology sector, 1H23, the technology sector had revenue of 254 million yuan, an increase of 18.7% over the previous year. We expect CINITY to be installed or accelerated in the second half of the year. As CINITY theaters increase, the company's advantage in high-tech format cinemas is expected to increase.
Gross margin has improved markedly, and operating expenses have been relatively controlled. 1H23/2Q23's gross margin was 27.6%/26.2%, respectively, a significant increase over the previous year, mainly due to the improvement in the gross margin of the screening business as the film market recovered. In 2Q23, the company's sales/management/R&D expenses ratio was 2.3%/7.5%/1.1%, respectively, and the overall level was quite moderate. We expect that as the external environment gradually recovers, the company's operating capacity is relatively stable, and the 2H23 profit level may recover further.
The content reserve is rich throughout the year, so pay attention to the performance of films related to the National Day program. Looking forward to the future, the company mainly submitted the film “Volunteers: Soldiers Attack” for the National Day (October 1). In the distribution section, reserves for subsequent imported films include “Oppenheimer” (domestic schedule August 30), “Captain Marvel 2” (North American schedule November 10), “Wonka” (North American schedule December 15), and “Neptune 2” (North American schedule December 20). It is recommended to pay attention to the actual introduction progress of imported films. We believe that the company has a solid advantage in content investment and distribution, and it is recommended to pay attention to the box office performance of the film “Volunteers: Soldiers Attack” released on the National Day festival.
Profit forecasting and valuation
Considering declining demand preferences for imported films, we lowered our 2023/2024 net profit forecast by 10.7%/5.1% to 901/1,123 million yuan. The current stock price corresponds to 30.7/24.6 times P/E 2023/2024. Maintaining an outperforming industry rating, due to lower profit forecasts, we lowered our target price by 10.1% to 17 yuan, corresponding to 35/28 times P/E 2023/2024, which is 14.9% upward from the current stock price.
risks
The schedule and box office of key films fell short of expectations, the introduction of imported films fell short of expectations, and competition in the industry intensified.
