Considering the rapid recovery of the domestic film market, the company actively distributes low-line cities and actively participates in the distribution of films to provide higher flexibility for its performance, it is estimated that the net profit of 2023 and 2024 in 2025 will be 2.88 / 3.61 million yuan respectively. 414 million yuan, corresponding to the valuation of 36.9max 29.5, 25.7 times, for the first time to cover the "highly recommended" investment rating.

China's leading private cinema line and cinema investment company. The company's film and television industry has the layout of the whole industry chain, and its box office revenue ranks in the forefront of film investment companies. The company's main business is cinema investment, production, cinema distribution, film projection and related derivative business. The company produced and participated in the production of "send you a Little Red Flower", "Hello, Li Huanying", "Life events", "alone on the Moon" and other films have achieved good box office and reputation. In 2023, the company participated in the production of films "Anti-Drug 3: people at the end of the World", "Super Family", "warm", "forget each other" and "Burning Winter" were released in the summer.

The cinema market recovered faster than expected, and the clearance of the post-epidemic industry accelerated. We believe that cinema movies are a unique type of entertainment products, with irreplaceable experience advantages. At present, the audience market tends to mature, and cinema in low-line cities is growing. under the joint action of the promotion of high-quality content and the recovery after the epidemic, for the first time in the history of the Spring Festival, the two men compete for hegemony, ushering in a win-win era of high-quality content of domestic films, and a concentrated outbreak of high-quality content in the summer holidays. the total box office far exceeded expectations and broke the record, indicating that the general trend of the recovery of the film market has been very obvious. From the perspective of the competition pattern, the cinema market is more than strong, and the layout of the city line may be the winner or loser.

Forward-looking layout of the third, fourth and fifth line of the market, with excellent operation and management skills. The company distributes high growth potential cities ahead of schedule, accounting for 70%. Relying on the brand promotion effect of Hengdian film and television cultural industry and dominated by asset-linked cinema investment, the company has expanded rapidly in cities at all levels throughout the country. As of June 2023, the company has invested in the construction of 421 asset-linked cinemas across the country, with 2686 screens, covering 29 provinces, autonomous regions and municipalities directly under the Central Government. The proportion of asset-linked cinemas is 83.7%. In business, it relies on the scale advantage of cinema projection terminals to enhance cinema derivative income. Layout of the film and television industry chain, the advantage of operation and management ability to promote business development.

For the first time, it covers giving a "highly recommended" investment rating. Considering the rapid recovery of the domestic film market, the company actively distributes low-line cities and actively participates in the distribution of films to provide higher flexibility for its performance. It is estimated that 2023x2024xx will achieve a net profit of RMB 2.88 / 3.61 / 414 million respectively in 2025, corresponding to 36.9pm 29.5x25.7 times valuation, giving "highly recommended" investment rating for the first time.

Risk hints: the risk of content censorship, the continuous risk of enthusiasm for watching movies, and the risk of intensified competition.