Events:
On August 29, the company announced 2023H1 results, with 2023H1 revenue of 372 million yuan (YOY+66.47%), net profit of 66 million yuan (YOY+140.51%) and non-return net profit of 23 million yuan (YOY+113.16%).
Main points of investment:
2023H1's robust performance recovery:
(1) the revenue of 2023H1 is 372 million yuan, the net profit of YOY+66.47%; is 66 million yuan, and the net profit of YOY+140.51%; is 23 million yuan. The non-recurrent profit and loss of YOY+113.16%, are mainly the change in the fair value of financial assets and the net profit and loss from the beginning of the first year to the merger date. The revenue of 2023Q1/Q2 is 1.78 / 194 million yuan, and the net profit of YOY+12.9%/+193.8%; is 0.36 billion yuan, YOY+2894.58%/+118.52%.
(2) the gross profit margin of 2023H1 is 24.60% (4.57pct higher than 2021H1), and the sales / management expense rate is 2.49% and 10.79%, which is higher than 2022H1 + 1.3/-1.42pct.
Take a good look at the recovery of the movie market and the "Cinema +" strategy to promote the sustained recovery of the film investment business:
(1) the cinema directly operated by 2023H1 achieved a box office of 282 million yuan, YOY+113%, recovered to 72% of 2019H1, and its market share was 1.19%, which was lower than that of 2019H1 by 0.17pct. According to Maoyan, as of August 29, the summer ticket sales of 2023 exceeded 20 billion yuan, the 2023Q3 box office has surpassed 2023Q1, and the National Day blockbuster Yunji Inc is optimistic that the recovery of movie habits will lead to the improvement of the company's box office, sales and advertising performance throughout the year.
(2) Cinemas continue to adjust dynamically, and the "Cinema +" plan will be comprehensively upgraded: at the end of 2023H1, the number of cinemas / screens directly operated by the company is 50 / 368, which is 4 / 24 less than that at the end of 2021; continue to explore "movies + IP+ periphery + business circle" to promote the rapid growth of box office and non-ticket business.
Firmly value the big IP development strategy:
The company's Shadow Yuan Culture has the right to operate 60 well-known IP, such as "Chinese fantastic Tan". ① will develop 15 feature films and 15 animated films in Shanghai Film Studio for the first time, and more than 20 film and television projects are expected in 2023-2025. ② promotes IP licensing cooperation from various angles: classic IP cooperates with McDonald's Corp and other multi-brand licensing products to launch Fantasy Planet to build 300+SKU around its classic IP image. ③ "Movie +": taking the upgraded Shanghai Cinema as a template, landing the immersive format of "China Qitan" and derivatives sales, etc., the second half of the year will focus on the layout of offline integration experience scenes to create an IP real-time interactive immersive R & D and theme interactive entertainment experience center. ④ IP digital development: Shang Yingyuan and cloud rendering, digital human and other areas of leading enterprises to start IP digital innovation ecological cooperation.
Profit forecast and investment rating: the company has formed a complete film distribution and projection industry chain of "specialized distribution company + comprehensive cinema line + high-end cinema operation", box office recovery is expected to improve profitability, the acquisition of IP operation company after the layout of new business, large IP development strategy is expected to open the second growth space. Based on this, we raise our profit forecast and estimate that the company's homing net profit from 2023 to 2025 will be 1.55pm 228pm 324 million yuan respectively, corresponding to EPS 0.35pm 0.51 pound 0.72 yuan per share, PE 44.17max 31.07X, maintaining the "buy" rating.
Risk tips: technology R & D / application practice / IP operation development is not as expected, box office recovery is not as expected, AI ethical risks, increased competition, brain drain, core talent team recruitment is not as expected, offline consumer demand is lower than expected, repeated epidemic situation, derivative quality, valuation center shift down and other risks.