Core views:
Alibaba Pictures announced its fiscal year 24 results: (1) In fiscal year 2024 (2023.4.1-2024.3.31), the company achieved revenue of 5,036 billion yuan, an increase of 43% over the previous year; net profit to mother (continuing operations) was 335 million yuan, turning a year-on-year loss into a profit. (2) In FY24 H2, the company achieved revenue of 2,420 million yuan, an increase of 43% over the previous year; net profit to mother (continuing operations) - 129 million yuan.
Movie ticketing and investment promotion are gaining momentum. (1) In FY24, the movie ticketing and technology platform achieved revenue of 920 million yuan, an increase of 76.26% over the previous year; achieved segment performance of 346 million yuan, an increase of 51.64% over the previous year. Mainly due to the overall recovery of the domestic film market, the leading position of ticket hunters and Phoenix Yunzhi is stable. (2) In FY24, film investment, production and promotion achieved revenue of RMB 2,072 billion, an increase of 68.58% over the previous year; achieved segment performance of RMB 467 million, an increase of 77.70% over the previous year.
During the reporting period, the company participated in the production/distribution of over 60 films (nearly 30 main promotion projects and 6 homemade and co-production projects), with a box office share of more than 60%. Among them, joint production projects include “Give It All” and “She Disappeared”. The main production/main promotion projects include “Hot and Hot” and “30,000 Miles in Changan”.
Barley also showed a significant increase in profits and growth potential. If barley were to be consolidated from the beginning of FY24 (actually consolidated on November 30, '23), the company estimates that it would increase annual revenue of 888 million yuan and EBITA of 659 million yuan. Barley has an absolute leading edge in the domestic ticket agency market and has benefited from the dividends of rapid industry growth. According to the China Performance Industry Association, the national performance box office increased 151% compared to 2019, and the national performance box office increased 117% year-on-year from January to January '24.
Profit forecasts and investment recommendations. We expect that in the 2025-2027 fiscal year, the company will achieve revenue of 70.12/79.47/8.867 billion yuan, and net profit to mother of 9.19/10.75/1,212 million yuan. Referring to comparable companies, Alibaba Pictures was given a PE valuation of 20 times the FY2025 fiscal year. The corresponding company's reasonable value was HK$0.68 per share, maintaining a “buy” rating.
Risk warning. Box office falls short of expectations; uncertainty about film and TV drama projects; increased market competition; changes in regulatory policies; risk of investment losses.