Description of the event
On March 21, 2024, Maogan Entertainment announced its 2023 annual results: in 2023, the company achieved revenue of 4.757 billion yuan, up 105.1% year on year; realized net profit of 908 million yuan, up 766.2% year on year; achieved adjusted net profit of 1,029 million yuan, up 342.2% year on year; adjusted EBITDA of 1,250 million yuan, up 290.4% year on year. Thanks to the strong recovery of the entertainment industry in 2023 and the company's control over high-quality content, many of the company's business and financial indicators have broken through record highs in the same period.
Incident comments
The entertainment market has recovered strongly, and the company's business has experienced breakthrough growth. In terms of the film market, according to data from the National Film Administration, the total box office of national films reached 54.915 billion yuan in 2023, an increase of 82.64% over the previous year; the box office of domestic films reached a record high of 46.05 billion yuan. The 2023 summer vacation program grossed 20.619 billion yuan, setting a new box office record for the same period; the Spring Festival and Dragon Boat Festival both had the second highest box office for movies and TV in the same period. In terms of the offline performance market, according to data from the China Performance Industry Association, the cumulative number of spectators in 2023 reached 171 million, an increase of 83.01% over 2019; in 2023, the national performance box office revenue was 50.232 billion yuan, an increase of 150.65% compared to 2019. In the context of industry restoration, the company's entertainment content service revenue increased 106.6% year on year to 230 billion yuan in 2023; online entertainment ticketing business revenue increased 111.5% year over year to 2,259 billion yuan.
Precisely control high-quality content and open up all links in the industrial chain. In 2023, the company participated in 54 domestic films, which reached record highs in the same period in terms of the number of participating films, cumulative box office, and market coverage. The number and depth of the company's participation in leading films has further increased. Among the top ten films in the Chinese box office in 2023, the company controlled and distributed 4 films, 5 as the main producer, and 8 participated in the production. The company's publicity capacity continues to improve, providing innovative promotion and marketing plans for “Man Jiang Hong” (6th place in Chinese film and television), “Fengshen Part 1” (Mainland box office winner of the year), and “One Twinkle, One Twinkle, One Star” (top three in the New Year's Eve box office), etc., to help the film box office and popularity; the “Cloud Package” service helped increase the box office by 227% year-on-year compared to 2022. In terms of online entertainment ticketing services, the company is deeply involved in the cinema scene, helping to develop the multi-functional characteristics of cinemas by increasing the number of special shows and providing marketing plans for membership and product sales services. In terms of advertising business, the company has broadened communication channels, and currently has more than 80 million fans in the new media; at the same time, the “Cat Eye Pro Edition” has increased AI investment to optimize video content production and distribution, and box office prediction capabilities, which helps to make targeted adjustments to publicity strategies. The company has a comprehensive layout of content, platforms and channels, and the collaborative advantages of the industrial chain are gradually showing.
The content reserve is rich, providing long-term upward potential. At the beginning of 2024, the New Year's Day and Spring Festival programs achieved record highs of the same period in Chinese film history with box office grossing of 1,533 billion and 8.016 billion, respectively. The company continued to increase participation and depth in the promotion and production of leading films. The film “Speeding Life 2”, which was mainly produced and produced by the company, ranked runner-up in the 2024 Spring Festival program; in addition, “Hot and Hot, Hot and Hot” and “Bears Are Incurring: Reversing Time and Space”, which the company participated in producing, also achieved excellent box office. Currently, the company's distribution/production of “Yellow Finch Is Behind”, “The Big “Anti-Party”, and “Spending Money at the End” have been scheduled; in addition, the company's reserves for various film projects with rich themes, such as “Sauce Garden Alley,” “Crisis Line,” and “Improvised Murder,” are progressing steadily. With high-quality content reserves, the collaborative advantages of the entire industry chain, and the integration of new technologies such as AI, the company will further expand the room for growth.
Risk warning
1. The recovery of film and television theaters falls short of the expected risk;
2. The film schedule falls short of the expected risk;
3. The box office performance of the work falls short of the expected risk.