According to the requirements of epidemic prevention and control, it has been more than 170 days since January 24 that cinema films have been withdrawn and adjusted one after another. Cinemas are the last few industries that have not yet returned to work and production, and they are also one of the industries hardest hit by the epidemic. When a reporter from the Securities Times visited a number of cinemas in Shenzhen and Beijing, "closed doors" is still the current mainstream state.

The silence is being broken. On July 13, the film "the first Farewell" was announced to be released nationwide on the first day of cinema resumption, becoming the first film to officially announce a clear schedule after the Spring Festival. Although the release time has not been set, it also brings a glimmer of hope for the cinema line to resume work.

Affected by this, in the secondary market, film and television stocks rose against the trend yesterday, Hengdian Film and Television, Lugang Culture rose by the limit, Huayi Brothers and Jinyi Film and Television rose by more than 9%. Since July, the film and television stock market has risen by more than 60 billion yuan.

With regard to the progress of cinema resumption, some companies have made it clear that they have not received the news, and the specific resumption time will be further determined according to the epidemic situation and the requirements of government departments. In spite of this, the resumption of cinema work is still the common expectation of the industry, from listed companies to cinemas to the capital side, are actively preparing for cinema resumption.

Zhou Maohua, a financial market analyst at Everbright Bank, told reporters that in the context of the gradual recovery of the film industry and policy support, the darkest moment of the film industry is passing, the market reaction is often ahead of time, and investors are looking forward to improving corporate performance in the future. However, considering that the global epidemic situation is still grim, there is still a lack of specific drugs for the epidemic, people are still worried about the spread of the epidemic, and it takes a process for the film industry to have a smooth upstream and downstream industrial chain. This means that it will take a long time for the film industry to recover, and the profit recovery of related companies is also uneven and slow. Therefore, investors need to avoid the risk of conceptual speculation.

The market capitalization has increased by more than 60 billion since July

A reporter from the Securities Times noticed that many film and television stocks began to rise in early July. According to statistics, there are a total of 30 stocks in the film and television sector, with a market value of 63.7 billion yuan higher than at the end of June.

Prior to this, the film and television sector as a whole was in a downward trend, with the film and television concept index falling nearly 15% from the beginning of the year to the end of June and rising 25% since July.

In view of the recent surge in some film and television stocks in the secondary market, Pan Helin, executive director of the Institute of Digital Economics, Central South University of Economics and Law, believes that part of the reason is the expectation of resuming work. "for investors, they should be cautious about the investment in the film and television sector. the impact of the epidemic on the film and television sector in the first half of this year is still relatively great and cannot be separated from the fundamentals."

Affected by the epidemic, the performance of many film and television companies in the first half of the year is worrying. From the announced performance forecasts, Alpha Animation & Culture, Huakai creativity, Jinyi Film and Television and Wanda Film and other companies in the first half of the net profit are at a loss.

On the evening of July 14, Wanda Film issued an earnings forecast saying it expected to lose 1.5 billion to 1.6 billion yuan in the first half of the year, compared with a profit of 524 million yuan in the same period last year. As for the reasons for the decline in performance, Wanda Film said that it was mainly because the company's more than 600 domestic studios had closed since late January, and overseas studios had also suspended business since the end of March. at the same time, films such as "Chinatown Detective 3," controlled by the company's chief investor, were not released as scheduled.

Hengdian Film and Television Securities Department staff told reporters that Hengdian Film and Television City has resumed work, but has not received the news of cinema resumption.

Affected by COVID-19 's epidemic situation, all cinemas under the company have been closed since January 24, and the resumption time will be further determined according to the epidemic situation and the requirements of government departments.

Film and television industry in the first half of the year

Depth adjustment

In the first half of the year, affected by the epidemic, cinema business came to a standstill, but the market scale of online entertainment consumption showed explosive growth. A total of 30 online films grossed more than 10 million yuan at the box office, double that of 15 in the same period in 2019, and the cumulative box office of 30 online films totaled 528 million yuan, up 157.56 percent from 205 million yuan in the same period last year.

In this regard, Yan Ming, secretary of Ciwen Media, told the Securities Times that at present, with the gradual mitigation of the epidemic and the gradual implementation of support and regulatory measures in the industry, the film and television industry itself has carried out a series of deep adjustments, and the whole industry is in a situation of getting ready. With the cross-integration of long and short video platforms and the new application of 5G technology, more forms of content products and their derivative industries develop, and the whole market space is considerable.

"after this round of rapid clearance and centralized adjustment of the industry, the concentration of production resources has been further enhanced, which is conducive to the integration of industry resources and the improvement of industrial efficiency; in addition, with the continuous improvement of the aesthetic level of the audience, put forward higher requirements for content to promote the development of the industry to the direction of high quality. It can be predicted that the film and television enterprises that can survive and develop in the market in the future must be those film and television companies with rich content types, outstanding ability to create high-quality content, strong financial strength, and can adapt to new models and new technology. only those companies that can continue to mass-produce high-quality content have a chance to win the market. " Yan Ming thinks.

At the other end, Huayi Brothers, Wanda Film, Huatze Film and Television have all issued refinancing plans, and the increase in capital of all parties also shows their recognition of the improvement trend of the industry, especially the leading fundamentals in the future.

The reporter noticed that since the beginning of this year, many Internet companies (platforms) have been marching into the film and television industry. In January, byte beat announced that it would buy the online broadcast rights of "embarrassing Mom" for 630 million yuan for users to watch free on byte system platforms such as Douyin and watermelon videos. In March, Douyin Culture (Xiamen) Co., Ltd. was established, the company's scope of business includes film and television program production, distribution, performance brokerage business, cultural and artistic activity planning, literary and artistic creation and performance. In addition, 360, Kuaishou Technology, XIAOMI and other companies have also announced their entry into the film and television industry.

Huaan Securities believes that with the epidemic in Beijing under control and news that the Shanghai Film Festival is expected to be held at the end of July, cinemas are expected to open soon. With the opening of cinemas, the backlog of high-quality films will be released intensively in the first half of the year, which is expected to give birth to a number of popular films, which will lead to a rapid increase in the attention of the sector. the upstream and downstream companies of the film industry are also expected to usher in a wave of valuation repair.

At the national level, a number of policies have been issued to support the development of the film industry. In May, the Ministry of Finance and the State Administration of Taxation issued an announcement on tax support policies for film and other industries. According to the announcement, from January 1, 2020 to December 31, 2020, the income of taxpayers who meet certain conditions from providing film projection services will be exempted from VAT; for the losses incurred by relevant film industry enterprises in 2020, the maximum carry-over period will be extended from 5 years to 8 years; in addition, cultural undertakings will be exempted from construction fees from January 1, 2020 to December 31, 2020.

Actively explore a new profit model

"at present, cinemas have been closed for more than half a year, and the conditions for cinemas to resume work are basically ripe, especially in some low-risk areas. Effective protective measures are in place, and the risk factors are relatively controllable." Pan Helin told the Securities Times.

He also believes that many film and television enterprises are closing down, and cinemas should resume work and production as soon as possible. "under safe and effective conditions, the film and television industry should also boldly resume work and production in an orderly and selective manner, which is also in line with the central policy of resuming work and scientific epidemic prevention."

The cinema department is also making positive preparations for the resumption of work and production. The head of a cinema told reporters that during the closure period, the cinema line was also making some preparations for resumption of work and production, such as the preparation of epidemic prevention materials, irregular maintenance of projection equipment, and regular cleaning and disinfection of cinemas. However, the specific opening time of the cinema has not been determined, so we have to wait for the unified notice from the competent department at a higher level.

At the same time, film and television listed companies are also actively exploring new models. Yan Ming told reporters that Ciwen Media has been actively exploring the C-end market, and has tried to launch the online movie "Great earthquake" before, and achieved better social and economic benefits. With the maturity of C-end account sharing mode and content products, the pattern of the coexistence of "online cinema line" and "offline cinema line" is expected to gradually form in the near future, and the market volume is equal.

With regard to the suggestion that the hospital line industry should return to work and return to production, Zhou Maohua said that the epidemic prevention infrastructure of the hospital line should be reformed as soon as possible, such as temperature detection, in-line disinfection measures, ventilation system, seat spacing, and so on; on the other hand, learn from the practice of tourist attractions in our country, consider adopting the form of appointment to control passenger flow; in addition, establish emergency plans, and so on.