It has been more than 170 days since cinemas closed, and 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.

A reporter from company e visited a number of cinemas in Shenzhen and Beijing. "the door is closed" is still the current state of the cinema line.

Recently, there has been a lot of news from the film and television industry, and film and television stocks are also active in the secondary market, with the market capitalization soaring by more than 60 billion yuan since July.

In view of the relevant situation and progress of cinemas, a reporter from company e interviewed relevant listed companies and industry experts, and some of them have responded that the company has made it clear that it has not yet received the news of cinema resumption, and the specific resumption time will be further determined according to the epidemic situation and the requirements of government departments.

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 the resumption of cinema production.

The market capitalization of the film and television sector increased by more than 60 billion in July.

On July 13, the film "the first Farewell" was announced to be released across the country on the first day of the resumption of work in cinemas. this is the first film to officially announce a clear schedule since the Spring Festival this year. Although the release time has not been set, it has also brought expectations for the cinema line to resume work.

Affected by this, in the secondary market, film and television stocks rose against the trend, Hengdian Film and Television, Lugang Culture rose by the limit, Huayi Brothers and Jinyi Film and Television rose by more than 9%. A reporter from company e noticed that many film and television stocks began to rise in early July. According to statistics, there are 30 stocks in the Wind film and television sector, with a market capitalization increase of 63.7 billion yuan compared with the end of June.

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

In terms of funds, the funds known as smart funds have also increased their positions in the north. In terms of the market value of the holdings, 60% of the film and television stocks in the wind film and television sector have recently been increased by northward funds, and the market value of the positions has increased by more than 700 million yuan compared with the end of June.

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 been closed since January 23, and overseas studios had also suspended business since the end of March. at the same time, films such as "investigation of Chinatown 3," controlled by the company's chief investor, were not released as scheduled.

Zhou Maohua, a financial market analyst at Everbright Bank, told E Company that against the background of the gradual recovery of the film industry and policy support, the darkest moment of the film industry is passing, and the market response is often ahead of time. 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, and people are still worried about the spread of the epidemic, it also takes a process for the film industry to have a smooth upstream and downstream industrial chain. it means that this round of recovery of the "vitality" of the film industry will take a long time, and the profit recovery of relevant enterprises is also unbalanced and slow. Therefore, investors need to avoid conceptual speculation risk.

Are waiting for the cinema to return to work.

According to the requirements of epidemic prevention and control, cinema films have been withdrawn and adjusted one after another since January 24, 2020, and now it has been more than 170 days since cinemas closed. It can be said that cinemas are the last few industries that have not yet returned to work, and they are also one of the industries hardest hit by the epidemic.

More than 170 days after the cinema was closed, the film "the first Farewell", which won three major awards in Berlin, Tokyo and Hong Kong International Film Festival, will be released nationwide on July 13, becoming the first film to officially announce a clear schedule after the Spring Festival.

Although the release time has not been determined, it also brings some hope to the resumption of work in cinemas across the country.

Zhou Maohua believes that the film industry is one of the industries most severely affected by the current epidemic. As the global epidemic prevention situation is still grim, the drag on the cinema line has not completely disappeared, but the epidemic situation in China has basically been effectively prevented and controlled. the trend of epidemic prevention in Beijing is getting better, and the official release of "the first parting" indicates that the domestic film industry is expected to speed up the release and resumption of production to a certain extent. The resumption of the film industry is something to look forward to.

Liang Junjian, an associate professor at the School of Journalism and Communication at Tsinghua University, said in an interview with the Securities Times e company that the resumption of work in the cinema industry is closely related to the resumption of work in other industries and the gradual recovery of social life. "the premiere of the cinema industry after the resumption of work and production will be a classic old film, which can gradually cultivate the habit of watching movies under the normalization of epidemic prevention and control, and the new film will not be released until the viewing market recovers to a certain extent. This is the possibility that I have thought of at present." He thinks.

In addition, recently, there are media reports that the official website of the Shanghai International Film Festival has suddenly updated some of the schedule. At that time, the production dates can be found from July 25 to August 2, including Claude Chabrol's "Beautiful Serge", Wu Yigong's "Old stories in the South of the City" and Ayano's Japanese film "Paradise". However, these screenings quickly dropped from the official website to "Please look forward to", which has not yet been publicly disclosed by the authorities.

"the withdrawal of the film after a brief appearance of the film festival may be a backstage system problem, but it reflects that the content of the festival is indeed under preparation, but the specific schedule and relevant summits should be coordinated by all parties, and at the same time, we also need to see the changes of the external epidemic." Zhu Zhu, an analyst at Guohai Securities Media, told the reporter of e company.

According to media reports, the Shanghai International Film Festival has been approved by the State Film Administration before the Dragon Boat Festival and will be held from the end of July to early August.

On July 14, a reporter from Company e called the official phone of the Shanghai International Film Festival, and the staff said it had not been confirmed yet, mainly by official announcements such as Weibo Corp, Wechat and the official website.

"since the resumption of work in the cinema line requires the decision of various local leaders, the progress of the first-tier cities will also lead to the progress of the second-and third-tier cities, so the Shanghai Film Festival is a relatively important time node. In addition, July and August is the traditional summer vacation, and the popular style in previous years also comes from this, so it is everyone's hope for the cinema line to resume work in July and August." Zhu Zhu told reporters.

For the film industry, although the news of the upcoming Shanghai International Film Festival has not been officially confirmed, it undoubtedly reveals a signal that the industry is looking forward to speeding up the resumption of work and production.

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.

The film and television industry may usher in an inflection point

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

In this regard, Yan Ming, secretary of Ciwen Media, told reporters 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 the derivative industry of IP 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.

E company reporter noticed that since 2020, many Internet companies (platforms) continue to enter 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.

This may mean that the future of the film and television industry is generally optimistic. The research report released by Huatai shows that as the epidemic in Beijing slows down, the possibility of the film industry returning to work in the near future increases, and the short-term plate will usher in a restorative rebound, and the long-term view is also a better time point for configuration. "Film and television and cinema industry after a long period of adjustment, from the fundamental point of view, there are signs of bottoming out. On the development trend of the industry, the content of Wang Logic is further highlighted, and in the post-epidemic era, the concentration of the industry is expected to be further enhanced, and leading companies are more likely to benefit from it. "

Huaan Securities believes that with the epidemic in Beijing under control and the news that the Shanghai Film Festival is expected to be held by the end of July, we expect cinemas 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, thus leading to a rapid increase in the attention of the sector. the upstream and downstream companies of the film industry are also expected to enter a wave of valuation repair.

In addition, the state has issued a number of policies to support the development of the film industry. In May, the Ministry of Finance and other departments issued an announcement on the tax support policy for the film and other industries. According to the contents of 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.

How to get back to work?

"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 reporter of e company.

He also believes that many film and television enterprises have closed 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."

And the cinema line is also making positive preparations for the resumption of work and production. The head of a cinema told the Securities Times e Company 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 e company that Ciwen Media has been actively exploring the C-end market, and has tried to launch the online movie "Great earthquake" before, which has achieved very good 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 be gradually formed 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 hospital line epidemic prevention infrastructure 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.

In fact, on February 22 this year, the China Film Distribution and projection Association issued the proposal of the Technical Branch of the China Film Distribution and projection Association on the preparatory work for cinemas to resume work, which clearly stated that preparations should be made for cinemas to resume work.

The proposal points out that it is recommended that cinemas should carry out overall cleaning and disinfection of the air-conditioning fresh air system before resuming business, and that cinemas should be equipped with professional 3D glasses cleaning and disinfection equipment to guide viewers to bring or purchase 3D glasses to watch movies. In addition, specific requirements for projection equipment, temperature and humidity are put forward, and it is suggested that the facilities in the projection room should be carefully checked for safety risks and be shown in strict accordance with the operation procedure.