Zhongjin released a research report stating that with the recent intensive scheduling of films, the visibility of the release schedules has been increasing. According to Ent Group, from January to May 2024, the cumulative box office revenue (including service fees) has reached RMB21.65 billion, a decrease of 2.3% compared to the same period in 2023. It is recommended to pay attention to the box office elasticity potential driven by the focus on summer content. In the short term, the summer schedule has a higher capacity and contributes more to the annual box office, and it is recommended to pay attention to trading opportunities brought by single movie box office performance exceeding expectations. In the medium and long term, content is king and the trend of brand being king remains unchanged. We recommend Wanda Film Holding Co., Ltd. (002739.SZ), Beijing Enlight Media Co., Ltd. (300251.SZ), Maoyan Entertainment (01896) and Ali Pictures (01060); pay attention to Bona Film Group Limited (001330.SZ) and Hengdian Entertainment Co., Ltd. (603103.SH).
CICC's main points are as follows:
Box office tracking: the scheduling effect continues, and the demand for viewing needs to be released.
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Review of historical summer schedules: in 2023, it reached a record high, which is referential for forecasting the overall box office for the year.
After 2020, the box office of the summer schedule shows a basic consistent recovery trend with the overall market. In the 2023 summer schedule (including the Dragon Boat Festival schedule), driven by movies such as 'She Vanished,' 'The Investiture of the Gods,' and 'Gum Chips,' the box office revenue (including service fees) reached RMB20.63 billion, which is the best box office performance for the same period in nearly five years, an increase of 14.1% compared to 2019. Zhongjin believes that the summer schedule has a large capacity, and new types and styles of movies have a greater development space. The supply of diversified theme films is attractive to young users. In addition, as the longest period of the year, the performance of the summer schedule has referential value for predicting the recovery of the film industry and the final box office points for the year.
Prospects for the 2024 summer schedule: pay attention to the performance of key films under a high base, and it is expected that the box office revenue will decrease by 15% to an increase of 5% YoY.
The key films already scheduled for the 2024 summer schedule include 'The Little Store on the Cloud Edge,' 'Customs Warline,' 'Umbrella Girl,' 'Legend,' 'Wild Child,' 'Successor Plan,' 'Under Human,' 'Life Against the Current,' and 'White Snake: The Floating Life.' Zhongjin pointed out that there is considerable pressure on the high base of last year's top films with a box office of over RMB1 billion, and the total box office revenue this year may be between 85% (RMB17.5 billion) and 105% (RMB21.7 billion) of last year's box office. The performance of the top films may have an important impact on the final box office results. It is recommended to continue to pay attention to the progress of scheduled key film releases and the box office performance after the release of scheduled films.
Risk factors: lower-than-expected quality and quantity of content supply, intensification of competition, spread of piracy, and tightening of supervision.