Continue to create new phenomenal mainstream films and explore multiple genres of films with multiple themes. The company has produced more than 250 movies, with a total box office gross of more than 60 billion yuan. Among them, it successfully created the “Mountain, River and Sea Trilogy” composed of “Smart Tiger Mountain”, “Operation Mekong”, and “Operation Red Sea”, the “China Pride Trilogy” composed of “Time to Win”, “Captain China”, and “Heroes of Fire”, the “Chinese Doctor”, “Changjin Lake” series, and “Unknown”. Among them, “Changjin Lake” topped the list of Chinese movies in history with a net box office of 5.4 billion yuan Room champion. Since 2023, the company has made positive adjustments to the film business. While retaining projects with good themes, the company is actively exploring new themes and new genres. Currently, there are nearly 15 creative development projects, and reserves are abundant. The film “Legend” starring Jackie Chan and applying AI technology was screened on July 12, 2024, and “Dream of a Red Mansion to Jinyu Liangyuan” is scheduled to be screened on August 16, 2024; the blockbuster IP sequel “Operation Jiaolong” continues to be filmed, preliminary preparations are underway for the animated film “Battle of the Humans” directed by Xu Ke, and Liu Weiqiang's spy blockbuster “Princess Kashmir” has completed the project.

The company actively explores the multi-genre long, medium, and short series business. The blockbuster drama “Shangganling” is scheduled to be broadcast in 2024; the youth inspirational drama “Haojiang Chaochong” and the urban suspense romance drama “Hunting Time” are scheduled to be filmed, including “Chaochong in the Haojiang River” is scheduled to be broadcast in 2024; the major historical drama “Lin Zexu” is under script development. The company has established and maintained long-term cooperative relationships with many outstanding talents in the industry, such as directors, producers, actors, screenwriters, etc., to ensure high content quality, high output, and outstanding resource integration advantages.

In February 2019, it obtained a cinema license to add a cinema line business, and built its own cinema to achieve a complete layout of the entire industry chain. The company has built its own cinema. By the end of 2023, the company had 108 cinemas that had opened its own, with a total of 892 screens, including 32 IMAX screens, 17 BONA ONE screens, 3 CINITY screens, 20 Chinese giant screens, and 13 SCREENX halls, covering first-tier cities such as North China, Shanghai, Guangzhou, and Shenzhen, as well as major ticket warehouse provinces such as Sichuan, Hunan, Hubei, Shandong, and Jiangsu. The company's film voting room ranked 7th in the country, ranking stable. In addition, the company obtained a cinema license in February 2019. By the end of 2023, Bona Cinemas had 127 cinemas, including 26 external participating cinemas. Bona Cinemas ranked 13th in the country, with a market share of 2.26%.

New direction: In terms of AI, the company has set up a professional AIGC team; carries out research and development, including new technologies such as virtual studios, to train and attract AI technical creative talents; in terms of copyright, it strengthens the digitization of copyright assets and actively expands copyright business sales.

Profit forecasting and valuation. We expect the company's total revenue for 2024-2026 to be 2.59 billion yuan, 3.26 billion yuan, and 3.59 billion yuan, with year-on-year growth rates of 61.0%, 25.7%, and 10.3% respectively; net profit to mother of 0.268 billion yuan, 0.474 billion yuan and 678 million yuan, respectively, with year-on-year growth rates of 148.4%, 77% and 43.1%; corresponding fully diluted EPS is 0.19 yuan, 0.34 yuan and 0.49 yuan per share, respectively. Referring to a comparable company's 2024 PE valuation of 22 times, we gave the company a PE valuation of 25-30 times in 2024, corresponding to a reasonable value range of 4.75-5.70 yuan/share, which is “superior to the market” rating.

Risk warning: The performance of the national film market fell short of expectations, and the company's film project development progress fell short of expectations.