存量项目运营稳中向好，场次同比大幅提升。根据宋城演艺公众号，24 年上半年期间公司共计演出场次约4371 场，同比23 年增长47.1%，同比19 年增长38.4%，其中杭州/三亚/丽江/桂林分别647/524/507/427 场，同比23 年分别上升31.8%/10.1%/10.5%/26% ， 同比19 年分别下降25.4%/21.1%/1.7%/11.2%。Song Cheng Entertainment announced that in the first half of 2024, the company achieved revenue of 1.177 billion yuan, a year-on-year increase of 59.00%, and net profit of 0.55 billion yuan to mother. It was 0.303 billion yuan in the same period last year, recovering to 70% of the same period in 2019.
In the second quarter, the company achieved revenue of 0.618 billion yuan, a sharp increase of 22.07% over the previous year, and net profit to mother reached 0.299 billion yuan, an increase of 23.17% over 0.242 billion yuan in the same period last year.
Song Cheng's revenue and profit increased dramatically in the first half of the year, and gross margin increased significantly. In the second quarter of 2024, the company achieved revenue of 0.618 billion yuan, a sharp increase of 22.07% year on year, and net profit to mother reached 0.299 billion yuan, an increase of 23.17% over 0.242 billion yuan in the same period last year. Mainly, the gradual recovery of business after the pandemic, the increase in the number of days of operation of stock projects, and the good performance of new projects throughout Guangdong.
The operation of existing projects was steady, moderate and positive, and the number of projects increased significantly over the same period last year. According to the Songcheng Performing Arts website, the company performed a total of about 4,371 shows during the first half of '24, up 47.1% from '23, and up 38.4% from '19. Among them, Hangzhou/Sanya/Lijiang/Guilin had 647/524/507/427 shows respectively, up 31.8%/10.1%/10.5%/26% from '23, respectively, down 25.4%/21.1%/1.7%/11.2% from '19.
Hangzhou scenic spots led the way, revenue from Lijiang scenic spots declined, and gross margin generally declined. In the first half of 2024, the revenue of Hangzhou/Sanya/Lijiang Scenic Area increased by 29.42%/6.45%/-7.72% year-on-year respectively, and gross margin was -0.26/-0.20/-3.49pct, respectively. The Hangzhou/Sanya/Lijiang Scenic Area achieved profits of 0.132/0.064/0.072 billion yuan respectively, an increase of 36%/3.4%/-15% year-on-year. In addition, Jiuzhai, Guilin, Xi'an, and Foshan Qianguqing achieved net profit of 0.065/0.027/0.026/0.049 billion yuan respectively, and the Zhangjiajie/Shanghai project lost 0.0075/0.02 billion yuan.
The gross margin increased significantly, and the cost ratio declined slightly during the period. In the first half of 2024, the company's gross sales margin was 69.2%, an increase of 5.2 pct over the previous year. The sales expense ratio was 4.5%, up 1.8 pct year on year, mainly due to the increase in the company's advertising investment in various scenic spots; the management expense ratio was 7.4%, down 0.6 pct year on year; and the financial expense ratio was -2.1%, a decrease of 1.7 pct year on year.
The Love Through the Ages series has been upgraded and innovated, and the application of technology enhances the tourist experience. On the basis of maintaining the quality of the performance, the company made in-depth upgrades to “Xi'an Through the Ages” and “Shanghai Through the Ages” to enhance the visitors' experience.
With its rich historical elements, Xi'an Ancient Love has become a tourist hotspot, and Shanghai's Ancient Love has won praise from tourists after being updated. On February 10, 2024, the Guangdong Ancient Scenic Area in Foshan opened and quickly became the focus of cultural tourism in the Pearl River Delta. The company uses technological innovation, such as applying immersive technology in “Three Gorges Through the Ages” and introducing advanced technology such as naked eye 3D in various scenic spots to respond to the diverse needs of visitors.
Investment advice: Since 24, the company's scenic spots have gradually resumed operations, and the number of scenic spots in stock has increased dramatically over the same period last year. Looking ahead to the future, the company's self-operated Xitang Qianguqing and asset-light Three Gorges and Yan'an projects are expected to contribute to the increase in opening one after another. The company's net profit for 2024/2025 is estimated to be 1.16/1.43 billion yuan, and the corresponding PE valuation is 17x/14x.
Risk warning: The epidemic is repeated, domestic and foreign passenger flow continues to be sluggish; macroeconomic growth is declining; travel consumption falls short of the expected risk, and opening a business falls short of the expected risk.
