The Zhitong Finance App learned that Debon Securities released a research report saying that this year's Spring Festival box office exceeded expectations, mainly driven by demand for movie viewers. The number of movie viewers was 161 million, over 129 million in 23 years. It is recommended to focus on targets related to films with a schedule that exceeds expectations, targets with a rich list of subsequent films, and leading cinemas; at the same time, OpenAI released the Sora model, and it is recommended to focus on changes in the film and television industry brought about by the catalytic “AI+ video” technology. 1) The overall Spring Festival market exceeded expectations, so it is recommended to focus on leading theatrical ticketing companies. 2) Focus on the topics related to films whose schedule exceeded expectations: “Hot and Hot” - Reading Group; “Speeding Life 2” - Bona Pictures; “Bears Incurred · Reversing Time and Space” - Huaqiang Fangte and Hengdian Film and Television. 3) It is recommended to focus on the targets with a rich list of subsequent films, as well as leading cinemas.

A shares: Optical Media (300251.SZ), Hengdian Film and Television (603103.SH), Shanghai Film (601595.SH), Wanda Film (002739.SZ), Bona Pictures (001330.SZ), Huayi Brothers (300027.SZ); Hong Kong stocks: Maogan Entertainment (01896), Reading Group (00772), China Ruyi (00136), Alibaba Pictures (01060), etc.

Debon Securities's views are as follows:

As of 16:00 on 2/17, the box office of the Spring Festival in '24 exceeded 7.96 billion yuan, and demand drove box office growth. As of 2/ 1716:00, the box office of the Spring Festival in '24 had surpassed 7.96 billion yuan, over $6.765 billion in '23, and $7.842 billion in '21. The bank believes that this year's Spring Festival box office surpassed expectations, mainly driven by demand for moviegoers. The number of movie viewers was 161 million, more than 129 million in 23 years. In terms of ticket prices, the average ticket price is 49.2 yuan, which is lower than the 23-year 52.3 yuan, or mainly due to special effects films such as “Wandering Earth 2” in '23, the demand for higher-priced special effects studios is even stronger.

Supply side: The quantity is basically the same. The themes are in full bloom under the cover of comedy, and the quality of the first film exceeds expectations. In terms of numbers, 8 movies were scheduled for the Spring Festival this year, 7 of which were screened on the first day of the new year, which is basically the same as in the past five years. In terms of subject matter, there are 6 comedy films, but the content varies. “Speeding Through Life 2” is closer to traditional comedy, starring Shen Teng, and the theme is racing, which is relatively more appealing to male audiences; “Hot and Hot Hot” is a female inspirational theme, and women account for 77.5%; “Article 20” is about popularizing the law, which discusses section 20 of the Criminal Code; “When Bears Came: Reversing Time and Space” is an animated film aimed at parents and children. The bank believes that comedy is highly compatible with the family fun attributes of the Spring Festival program, so most of this year's Spring Festival movies include comedic elements; however, from the perspective of the core and audience, they are not all the same, thus stimulating the demand for watching movies among all kinds of people.

In terms of quality, the number of films grossing more than 1 billion reached 4, surpassing previous years, and box office predictions were drastically revised after the release of the top films. “Hot and Hot” has grossed 2,699 billion, with a total box office forecast of 26 to 32 billion, and a total box office of 4,031 million; “Flying Fast Life 2” has reached 2,373 billion, the total box office forecast before the screening is 1,75-24 billion, and the total box office for “The Bears Are Incurring: Reversing Time and Space” has reached 1,397 billion. We believe that the increase in box office expectations after the film is screened, reflecting the excellent quality and reputation of the film. Adequate high-quality supply boosts demand for movie viewing, and is the key to sustainable box office growth. Furthermore, the schedule competition is fierce and the Matthew effect is remarkable. The top four films all have grossed over 1 billion dollars, while the fifth place has not yet grossed more than 100 million. “Let's Rock the Sun Together”, “Mr. Red Carpet”, and “Huang Wei: The Fortune Cat” have been withdrawn one after another.

Demand side: Driven by high-quality supply, the habit of watching movies on a regular schedule has resumed, and publicity has further boosted the demand for movie viewing.

The bank believes that the main source of demand for watching movies during the Spring Festival is: 1) A variety of high-quality comedies with various themes to meet the movie-watching needs of all kinds of people. 2) Under the impetus of various programs such as the Spring Festival program in '23, the summer program, the Lunar New Year program, and the New Year's Day program in '24, movie viewing habits have gradually resumed, especially during the schedule. 3) The number of publicity campaigns is highly correlated with the film's box office. According to Cat's Eye Pro, as of 2/16, the total number of new Spring Festival movies distributed over 52.24 billion people in '24, of which “Hot and Hot and Hot” had spread to more than 21.338 billion people, far surpassing the 10.186 billion people of “Flying Fast”.

Risk warning: Competition in the industry intensifies; box office falls short of expectations; film withdrawal, etc.