Considering that many key films are expected to be released during the summer season, the box office market is expected to rebound after July with the successive release of key films.
According to the research report released by China Galaxy Securities, nationwide box office revenue in June was 1.89 billion yuan (including service fees), a year-on-year decrease of 44.57% and a month-on-month decrease of 35.91%, according to Lighthouse Professional. During the Dragon Boat Festival holiday from June 8 to 10, 2024, the total box office of China's film market reached 378 million yuan, with a total of 1.382 million screenings. Considering that many key films are expected to be released during the summer season, the box office market is expected to rebound after July with the successive release of key films. It is recommended to focus on the tracks with stable performance foundation or obvious supply-side recovery and sector valuations that are attractive. After that, seek steady progress and look for elastic varieties with incremental dimensions or improvements in peripheral factors.
China Galaxy Securities' main points are as follows:
Weak performance in the first month of the summer season, with subsequent key films gradually being released.
According to Lighthouse Professional data, nationwide box office revenue in June was 1.89 billion yuan (including service fees), a year-on-year decrease of 44.57% and a month-on-month decrease of 35.91%. On the demand side, there were 11.88 million movie screenings in June, a year-on-year increase of 6.38% and a month-on-month decrease of 3.17%, setting a new record for the number of screenings; attendance rate was 3.6%, a year-on-year decrease of 43.75% and a month-on-month decrease of 26.53%; 43 million people went to watch films, a year-on-year decrease of 50.57% and a month-on-month decrease of 41.10%. On the supply side, the number of films released in June was 41, a decrease of 26.79% and 30.51% compared to the same period last year. Considering that many key films are expected to be released during the summer season, the box office market is expected to rebound after July with the successive release of key films.
The overall supply of the gaming market is stable, and the performance of new summer games has been impressive.
In the first six months of 2024, 628 licenses were issued, an increase of more than 20% from the same period last year. The trend of steady and incremental issuance of licenses is expected to continue, with the supply side of the industry continuing to improve and new gaming product cycles starting one after another. As the summer season approaches, major manufacturers are reserving new games and scheduling them online one after another. Key new games such as "DNFm" and "Three Kingdoms: Strategic Conquest" have all performed well. It is expected that new summer games will contribute new increments to the entire gaming market.
The marketing market has increased year-on-year, and sub-channels have fluctuated and adjusted.
According to the overview of advertising market data released by CTR in April 2024, the advertising market in April 2024 increased by 4.0% year-on-year. Looking at the changes in advertising spending in industries (categories), half of the industries, such as cosmetics/bathroom products, high-end drinks, and entertainment and leisure, had a year-on-year increase in advertising spending of more than 20%, which are the main forces driving advertising market placement.
Apple has launched Apple Intelligence and is bullish on the promotion of AI applications.
In the early morning of June 11, 2024 Beijing time, Apple officially announced Apple Intelligence at the WWDC24 conference, using AI to reshape and upgrade its entire product line. Apple has integrated the ChatGPT of OpenAI into Siri, significantly enhancing its conversational intelligence. Through artificial intelligence and machine learning, Apple Intelligence can better provide users with powerful personal products, simplify people’s lives, and push the experience of using Apple products to new heights.
It is recommended to focus on the tracks with stable performance foundation or obvious supply-side recovery and sector valuations that are attractive. After that, seek steady progress and look for elastic varieties with incremental dimensions or improvements in peripheral factors.
1) Hong Kong Internet: The expected improvement in the profitability of head Internet companies strengthens the investment cost performance. It is recommended to pay attention to Tencent (00700), whose various businesses are steadily growing and has a sound fundamental; and Internet video platform companies such as Bilibili (09626) that have opportunities to reverse losses. 2) Publishing industry: The publishing industry will accelerate its digital, personalized, and intelligent development. The new increment of AI+publishing and research and learning businesses will bring new opportunities to the industry. The management of central state-owned enterprise market cap may also be included in the assessment. It is recommended to focus on Shandong Publishing (601019.SH), Southern Publishing and Media (601900.SH), and other stocks with sound fundamentals and certain business incremental space. 3) Film and television chains & gaming industry: Quality content is still a rare resource in the industry. It is recommended to pay attention to film and television chain companies empowered by AI, such as Ultraman Movie & TV (300002.SZ), Kingnet Network (002517.SZ), Beijing Enlight Media (300251.SZ), Wanda Film Holding (002739.SZ), and others.
It is recommended to focus on the tracks with stable performance foundation or obvious supply-side recovery and sector valuations that are attractive. After that, seek steady progress and look for elastic varieties with incremental dimensions or improvements in peripheral factors. 2) Publishing industry: The publishing industry will accelerate its digital, personalized, and intelligent development. The new increment of AI+publishing and research and learning businesses will bring new opportunities to the industry. The management of central state-owned enterprise market cap may also be included in the assessment. It is recommended to focus on Shandong Publishing (601019.SH), Southern Publishing and Media (601900.SH), and other stocks with sound fundamentals and certain business incremental space. 3) Film and television chains & gaming industry: Quality content is still a rare resource in the industry. It is recommended to pay attention to film and television chain companies empowered by AI, such as Ultraman Movie & TV (300002.SZ), Kingnet Network (002517.SZ), Beijing Enlight Media (300251.SZ), Wanda Film Holding (002739.SZ), and others.
It is recommended to focus on elastic stocks with sound fundamentals and certain business incremental space, such as: 1) Hong Kong Internet: Tencent (00700), whose various businesses are steadily growing and has a sound fundamental; and Internet video platform companies such as Bilibili (09626) that have opportunities to reverse losses. 2) Publishing industry: The publishing industry will accelerate its digital, personalized, and intelligent development. The new increment of AI+publishing and research and learning businesses will bring new opportunities to the industry. It is recommended to focus on Shandong Publishing (601019.SH), Southern Publishing and Media (601900.SH), and other stocks with sound fundamentals and certain business incremental space. 3) Film and television chains & gaming industry: Quality content is still a rare resource in the industry. It is recommended to pay attention to film and television chain companies empowered by AI, such as Ultraman Movie & TV (300002.SZ), Kingnet Network (002517.SZ), Beijing Enlight Media (300251.SZ), Wanda Film Holding (002739.SZ), and others.
Risk Warning: Risks of slower-than-expected progress in AI technology development; risks of content regulation; risks of industry competition due to risks of unexpected technology application.