The Zhitong Finance App learned that CICC released a research report stating that it maintained the “outperforming industry” rating of Maoyan Entertainment (01896), and raised the 2023/2024/2025 net profit forecast of 23.7%/9.8%/10.4% to 9.18/9.93/1,126 billion yuan, taking into account the performance and management expenses of Lunar New Year movies and adjusting the predicted income tax rate. The target price is HK$12, taking into account the increase in profit forecasts and the downward shift in the industry's valuation center. The company expects revenue of 4.7 to 4.8 billion yuan in 2023, up about 102.6% to 106.9% year on year; net profit to mother is 8.8 to 930 million yuan, a sharp increase over the previous year. The performance forecast exceeds the bank and market expectations, mainly due to the good performance of Lunar New Year movies, proper management cost control, and adjustments to the predicted income tax rate.

The main views of CICC are as follows:

The movie ticketing business recovered along with the steady recovery of the industry, and revenue from the performance industry may have increased significantly.

Movie ticketing: According to Yien, in 2023, the national box office with service fees was 54.9 billion yuan, an increase of 83.4%, and recovered to 85.6% in 2019; according to the Cat's Eye Pro Edition, the national online sales volume in 2023 was 1,129 million, an increase of 83.9%, and the overall recovery was steady. Performance ticketing: According to data from the China Performance Industry Association, the total number of spectators in the first three quarters of 2023 reached 111 million, surpassing the total number of spectators in 2019.

According to the announcement, in 2023, the company's performance ticket revenue and GMV both reached record highs in the same period, and progress was made in the large-scale performance event category. The bank determined that the company's movie ticketing business recovered steadily with the recovery of the industry; under strong supply and demand in the offline performance industry, the company's related revenue may have increased markedly. Overall, the bank expects online entertainment ticketing revenue to increase 115% to 2.3 billion yuan in 2023.

The content business performed well in 2023, and distribution capabilities continued to be verified.

According to the company's announcement, in 2023, the number of films and box office share of the company participated in the promotion reached a record high of the same period. Among them, the Spring Festival film “Manjianghong”, which was mainly distributed and produced, grossed more than 4.5 billion yuan; the summer film “Fengshen Part 1: Morning Song Fengyun” grossed more than 2.6 billion yuan, and “In the Octagonal Cage” grossed more than 2.2 billion yuan. As of February 22, according to Cat's Eye Pro, the Lunar New Year program “Can't Stop the Annual Meeting” had grossed over 1.29 billion yuan. The bank expects revenue from entertainment content services to increase 104% to 2.27 billion yuan in 2023.

The 2024 Spring Festival film “Flying Fast Life 2” won second place in the box office. Follow the performance of subsequent participating films.

According to the Cat's Eye Pro Edition, as of February 22, the 2024 Spring Festival program, “Flying Spur Life 2”, which was distributed and produced by the company, had grossed more than 2.8 billion yuan, ranking second in the Spring Festival box office; the company also participated in the production of “Bears Incurred: Reversing Time and Space” and “Hot and Hot”. Looking ahead to the future, the company's reserve films include “Spending Money at the End”, “Fire Thief”, “Rebirth”, “Child of Time”, and “Umbrella Girl.” It is recommended to continue to pay attention to the schedule pace and box office performance of subsequent films.