花房集团尚未复牌，但继续出现大额减值的可能性较小。根据花房集团的2024 年中期报告，花房集团2024 年上半年实现营业收入9.65 亿元，实现净利润0.34 亿元，同比扭亏为盈。截至2024 年三季度末，公司长期股权投资账面价值7.89 亿元，参考二季度花房净资产价值21 亿元，公司持有花房集团股权比例为35.35%，公司持有的花房股权价值基本与花房净资产价值相等，公司在此项资产继续减值的可能性较低。截止到24 年6 月末，花房集团账面存在19.25 亿的现金，计算可得也基本和长期股权投资的账面价值相符，大额减值可能性较小。Key points of investment:
The company announced its 2024 three-quarter report, and the results were in line with the unanimous expectations of the market. In the first three quarters of 2024, the company achieved revenue of 2.013 billion yuan, an increase of 24.46% over the previous year. Achieved net profit of 1.008 billion yuan, a year-on-year increase of 28.04%, and realized net profit without deduction of 0.994 billion yuan, an increase of 28.05% over the previous year. The company achieved revenue of 0.836 billion yuan in the third quarter, down 4.69% from last year, realized net profit of 0.457 billion yuan, a year-on-year decrease of 5.54%, and realized net profit deducted from non-mother of 0.446 billion yuan, a year-on-year decrease of 7.1%. The company's gross margin for the third quarter was 76%, down 2 pct year on year, and sales expense ratio/management expense ratio were 5.4%/5.0%, respectively, +0.6 pct/+0.8 pct year on year. We believe that the slight decline in revenue in the third quarter was mainly due to: 1) a year-on-year decline in Lijiang and Sanya projects; 2) there were many discounts on nurturing project activities, which lowered customer unit prices.
In the first three quarters, asset-heavy projects were newly opened in Foshan, Guangdong, and the asset-light project was newly opened in Yichang, the Three Gorges. Since the opening of the new project, it has performed very well. During National Day Golden Week, Songcheng Performing Arts's 13th National Scenic Area received more than 2.6 million visitors over 7 days, which is 159.7% of the 2023 National Day Golden Week. The 13th National Congress of “Love Through the Ages” performed 481 shows. At its peak, “Love Through the Ages” was performed at a maximum of 95 shows in a single day. Among them, there were 69 shows during the National Day of Love in Songcheng, Hangzhou, and the retail rate reached 72%. Since opening Theater No. 2 in the summer, “Love Through the Ages in Xi'an” has started a parallel mode with two theaters, completely turning on the traffic ceiling. It has performed 17 shows in a single day for multiple days, with a total of 86 shows during Golden Week, making it the large-scale tourist entertainment with the most number of performances on the National Day in Xi'an and the largest audience. “Love Through the Ages in Guangdong” performed 47 shows during Golden Week, with a retail audience rate of 87%. Live performances of 10,000 people, such as “Love with the Bagpipe” and “Carnival of Flames”, were launched. “Three Gorges Through the Ages” is an asset-light management project newly launched by the company in July. It has achieved 9 shows in a single day for many consecutive days, breaking many records such as the number of large-scale tourist entertainment shows and the number of spectators in Hubei.
HUAFANG GROUP has yet to resume trading, but it is less likely that it will continue to experience significant depreciation. According to HUAFANG GROUP's 2024 interim report, HUAFANG GROUP achieved operating income of 0.965 billion yuan and net profit of 0.034 billion yuan in the first half of 2024, turning a loss into a profit over the previous year. As of the end of the third quarter of 2024, the book value of the company's long-term equity investment was 0.789 billion yuan. Referring to the net asset value of Huafang in the second quarter, the company held 35.35% of HUAFANG GROUP's shares. The value of Huafang's shares held by the company is basically equal to the value of Huafang's net assets, so it is unlikely that the company will continue to lose value in this asset. As of the end of June '24, HUAFANG GROUP had 1.925 billion in cash on its books. The calculated availability is also basically consistent with the book value of long-term equity investments, and the possibility of significant depreciation is less likely.
Investment analysis opinion: Subsequent large capital expenses were gradually reduced, and revenue and profit gradually rebounded in the first half of the year. Considering the pressure on terminal demand, we lowered net profit to mother for 24-26 to 1.082/1.153/1.279 billion yuan (previous value 1.197/1.407/1.577 billion yuan). The current stock price corresponding to 24-26 PE is 21 times, respectively, maintaining a “buy” rating.
Risk warning: Competition in the entertainment industry increases risks, and the risk of falling customer unit prices due to insufficient terminal demand as expected, etc.
