Core views
A boutique mid-sized cinema company, with IP+ content driving the second growth. The company's main business is cinema operation, mainly in Shanghai. Shanghai Film and Cinema (SFC) accounts for more than 80% of revenue. The main cinema business is “small but beautiful”, and the operating efficiency is higher than that of peers and is stable.
In '23, the company ushered in major changes. Through the acquisition of 51% of Shangyingyuan's shares, it obtained the right to operate 60 classic film and television IPs from the parent company Shangying Film Group, including “Hulu Brothers” and “Haunted Tiangong”, and switched to the IP+ content business, with plenty of room for monetization.
In addition to the 60 classic IPs in stock, the company continues to innovate the original IP and awaken the old IP. New IPs include “China Qitan,” which was popular after 95; old IPs have awakened, including “Sloppy King” and “New Snow Kid,” which are about to be remade, and the number and influence of IPs is constantly growing.
IP monetization is diverse, and game licensing is flexible. 1) Traditional licensing: Customer specifications have improved markedly, including Starbucks, etc.; 2) Game licensing: good model and high flexibility. The estimated annual revenue of medium- to short-term game licenses is 250-650 million, and the long-term space is 15-40 billion.
The parent company is rich in industrial resources, and the content business is expected to collaborate. The parent company Shanghai Film Group's Beauty Film Company and Shanghai Film Studio have leading animation and live action film production capabilities. The recent success of “Blossoming Flowers” clearly reflects the Group's production and resource integration capabilities. Listed companies can gradually expand into the content business by participating in investment, such as participating in the production of “China Qitan 2” and the original IP “Ao Five Family”. We expect that in 23-25, the company will achieve operating income of 9.23, 12.61, and 1,551 billion yuan, an increase of 150.67%, 36.58%, and 22.97% over the previous year; net profit to the mother was 1.52, 2.36, and 318 million yuan, an increase of 145.26%, 55.80%, and 34.56%. 34.38