Cinemas have been back to work for nearly two months, and the box office recovery rate has reached 94.8% since September. The market share of head cinemas and film companies has further increased. Looking back on the National Day archives in previous years, we can see that the head of the film is concentrated and the channel sinks obviously.
With the National Day in 2020 approaching, there are seven films participating in the competition, including "Jiang Ziya", "winning the Championship" and "me and my hometown". CICC expects the box office to reach 36-4.6 billion yuan during the eight-day holiday, returning to 86% of the same period of seven days last year.
In the short term, you can focus on the trading opportunities brought about by a single film that exceeds expectations at the box office. In the medium to long term, it is suggested that we should pay attention to the opportunity to increase the market share of the head cinema line under the further integration of the cinema line industry.
Return to work observation: the box office recovery has progressed steadily, and the concentration of the industry has increased.
During the two-month period when cinemas resumed work, the box office recovered 43.2% compared with the same period last year, and the national cinema resumption rate is currently more than 92%. Affected by the health incident, cinemas across the country will be closed from January 24, 2020, and cinemas in low-risk areas will resume business in an orderly manner on July 20 under the implementation of prevention and control. Since cinemas resumed work, the ticketing mode has been adjusted to adopt online real-name booking and contactless ticketing. The upper limit of attendance should not exceed 30% from July 20, 50% in mid-August, and 75% on September 15.
Driven by the supply of high-quality films such as "eight hundred", the national box office recovered steadily, with the national box office without service charge reaching 4.91 billion yuan from July 20 to September 20, up 43.2 percent from the same period last year.
Chart: the box office of cinemas across the country after the resumption of work (excluding service charge)
Source: Yi en, China International Capital Corporation Research Department
Chart: recovery rate of cinema box office (excluding service charge) after cinema resumes work across the country
Source: Yi en, China International Capital Corporation Research Department
Chart: average attendance rate of cinemas across the country after returning to work
Source: lighthouse Professional Edition, China International Capital Corporation Research Department
Chart: national cinema resumption rate
Source: lighthouse Professional Edition, China International Capital Corporation Research Department Note: the resumption of cinemas refers to the cinemas with open schedules on the same day, and the resumption rate is calculated by the total number of cinemas with open schedules on January 1, 2020 as the denominator.
The box office recovery rate reached 94.8% in September 2020 compared with the same period last year. According to the normal situation in previous years, due to the influence of students' summer vacation and the beginning of the school year, the box office from July to September has a strong seasonal fluctuation: there are fewer dates for new films in September after the summer vacation, and there will be a natural decline compared with August during the summer vacation. In July (July 20 to July 31), August and September (September 1 to September 20) in 2020, the year-on-year recovery rates of box office without service charge were 8.0%, 42.5% and 94.8%, respectively.
Chart: monthly box office comparison from July to September from 2018 to 2020 (excluding service charge)
Source: Yi en, China International Capital Corporation Research Department
Note: in order to maintain the comparability of the data, 20-31 data are taken at the box office in July and 1-20 data at the box office in September.
According to the urban level, the pace of resuming work in the first, second, third and fourth-tier cities is faster, while that in the fifth-tier cities is relatively slow. During the period from July 20 to September 20, 2020, the cumulative box office recovery rates of first-to fifth-tier cities compared with the same period in 2019 were 40.3%, 41.4%, 42.6%, 48.1%, 48.1%, respectively. Under external policy restrictions, the recovery rates of attendance in first-to fifth-tier cities were 77.2%, 77.6%, 74.2%, 76.6% and 80.6%, respectively. The resumption rates of cinemas in first -, second -, third-and fourth-tier cities are all over 90%, while those in fifth-tier cities are relatively low, with a resumption rate of 82.4%.
Chart: urban distribution of box office (excluding service charge) after the resumption of work across the country
Source: Yi en, China International Capital Corporation Research Department
Note: the box office does not include service charge, and the statistical range is from July 20, 2020 to September 20, 2020.
Chart: urban distribution of average attendance of cinemas in China
Source: Yi en, China International Capital Corporation Research Department
Note: the statistical range is from July 20, 2020 to September 20, 2020.
Chart: distribution of cinema resumption rate in cities across the country
Source: Yi en, China International Capital Corporation Research Department
Note: cinema resumption rate = number of cinemas on September 20, 2020 / number of cinemas on December 31, 2019
Since cinemas across the country have resumed work in stages, the market share of head cinemas and film companies has further increased. According to the cumulative box office from July 20 to September 20, 2020, cinema companies[1]CR3, CR5 and CR10 were 32.6%, 46.6% and 67.3% respectively, which increased 1.7ppt, 1.7ppt and 0.4ppt respectively compared with the same period last year. Among them, Wanda Cinema Line and Hengdian Cinema Line upgraded 1.73ppt and 0.49ppt respectively, with an obvious increase. Film investment companies CR3, CR5 and CR10 were 29.8%, 36.7% and 47.0% respectively, up 2.9ppt, 3.1ppt and 3.1ppt year-on-year, respectively, faster than cinema share year-on-year. Wanda Film and Hengdian Cinema Line improved 2.52ppt and 0.66ppt respectively.
On the one hand, the tail individual cinema is limited by funds and other factors, and has been cleared under the influence of health events; on the other hand, the head cinema line and the film investment company have made more adequate preparations for the resumption of work and production, and the recovery process is faster.
Chart: national box office market share Top 10 cinema line company resumes work
Source: Yi en, China International Capital Corporation Research Department
Note: the box office does not include service fees, and the statistical range is from July 20, 2020 to September 20, 2020; the statistical time point of cinemas is September 20, 2020; the resumption rate is the number of cinemas on September 20, 2020 / December 31, 2019.
Chart: national box office market share Top 10 film casting company resuming work
Source: Yi en, China International Capital Corporation Research Department
Note: the box office does not include service fees, and the statistical range is from July 20, 2020 to September 20, 2020; the statistical time point of cinemas is September 20, 2020; the resumption rate is the number of cinemas on September 20, 2020 / December 31, 2019.
According to the city level, from July 20 to September 20, 2020, the cumulative box office size of cinema company CR5 in first-to fifth-tier cities increased 2.4ppt, respectively, 1.9cm, 2.3ppt, 2.6ppt, and CR5, respectively, improved 4.9/1.7/4.5/2.5/3.9ppt in first-to fifth-tier cities. CICC believes that the impact of the 2020 health incident on the cinema industry mainly lies in the high fixed cost pressure under the cinema shutdown.
In the long run, as an important drainage entrance to shopping malls, and under the circumstances that favorable geographical locations in the business circle are relatively scarce, cinemas in first-and second-tier cities are on the verge of closure under the influence of health incidents, even if they face temporary cash flow pressure. because of its location scarcity and necessity, shopping malls will generally introduce new film investment companies to take over, and the overall number of cinemas in stock is in a relatively balanced state. The rents of first-tier cities are higher than those of second-tier cities, which may be under pressure in the short term. Because the population density of the third -, fourth-and fifth-tier cities is not as large as that of the first-and second-tier cities, and the location scarcity has been weakened, the probability of clearing out after it is on the verge of closure may be greater than that of the first-and second-tier cities. CICC believes that the actual impact of the closure of the health incident on the waist cinema in the sinking channel may be greater and the clearing speed may be faster.
Chart: distribution of CR5 cities after the resumption of work by cinema companies across the country
Source: Yi en, China International Capital Corporation Research Department
Note: the statistical range is from July 20, 2020 to September 20, 2020.
Chart: CR5 city distribution after the National Film Investment Company returns to work.
Source: Yi en, China International Capital Corporation Research Department
Note: the statistical range is from July 20, 2020 to September 20, 2020.
The prospect of National Day: it is expected to return to normal and focus on the box office performance of high-quality films.
With the National Day in 2020 approaching, CICC has combed through the situation of fixed-file films. The number of National Day films this year is relatively small, but the quality of high-quality films can be expected. From 2013 to 2019, the number of films released on National Day was stable at about 10, while this year, the number of films scheduled for National Day was 7, including 6 domestic films, including "winning the Championship", "Vanguard", "me and my hometown", "Jiang Ziya", "Mulan: born in the sky" and "coming Home at one o'clock". And an imported replay film "the Summer of Kijiro" (9.25).
Chart: number of films shown on National Day from 2012 to 2020 (as of September 22, 2020)
Source: cat's Eye, Yi'en, China International Capital Corporation Research Department
Combined with the film expectation index and the participation of listed companies, CICC suggested focusing on films such as Jiang Ziya, winning the championship and me and my hometown.
Among them, Jiang Ziya was produced and distributed by Light Media and other companies. as of September 22, the number of people who wanted to see Cat's Eye (01896) and Lighthouse had exceeded 3.22 million, making it the largest number of people wanted to see the film on National Day. It is an animated film in the second installment of the Divine Trilogy following the birth of the Devil Child of Naha.
Directed by Chen Kexin and starring Gong Li and Huang Bo, "winning the Championship" is produced by Huanxi Media, Chinese Film and BABA Pictures (01060), and released by BABA Pictures. It tells the history of the Chinese women's volleyball team winning the first world championship in 1981 to the tenth world championship in 2019.
"me and my hometown" is produced by Beijing Culture and Chinese movies, distributed by Beijing Culture, produced by Zhang Yimou and directed by Ning Hao, including "UFO falling from the Sky" directed by Chen Sicheng, starring Huang Bo, Wang Baoqiang and Liu Haoran; Ning Hao's "good people of Beijing" unit starring Ge You and Liu Mintao; and Xu Zheng's "Last lesson" module starring Fan Wei, Zhang Ying and Han Haolin Deng Chao and Yu Baimei directed the "Road back Home" unit, starring Deng Chao and Yan Ni; Yan Fei and Peng Damao directed "Magic Pen Ma Liang" unit, starring Shen Teng and Ma Li, with a high cast of directors and actors.
Chart: national Day film attention in 2020 (as of September 22, 2020)
Source: cat's Eye, Lighthouse, China International Capital Corporation Research Department
Note: cat's eye and lighthouse cumulative want to see the number of people statistics non-weight.
Chart: 2020 National Day pre-sale rehearsal (as of September 22, 2020)
Source: cat's Eye, China International Capital Corporation Research Department
Note: it is calculated according to the sum of the times of cat's eye pre-sale from October 1 to October 8.
Chart: 2020 National Day pre-sale box office (as of September 22, 2020)
Source: cat's Eye, China International Capital Corporation Research Department
Chart: 2020 National Day film list
Source: cat's Eye, Lighthouse, Douban Film, China International Capital Corporation Research Department
Forecast of the overall box office of the National Day in 2020
The box office can be broken down into "moviegoers * average ticket price". These two variables are predicted respectively, and CICC gets the range of the National Day box office.
Moviegoers: the number of moviegoers in the National Day stalls is closely related to the quality of the film, and word-of-mouth determines the sustainability of box office growth after the premiere. However, the National Day holiday in 2020 is as long as 8 days (7 days in 2019), and overseas travel is relatively limited under the influence of health events, so cinema watching activities may become a better choice for people's offline entertainment. Looking forward to the National Day in 2020, from the current fixed film director and starring lineup, the film quality is worth looking forward to, if there can be 2-3 word-of-mouth masterpieces, it will effectively pull the number of people to recover effectively. CICC estimates that in the three conservative / neutral / optimistic cases, the number of moviegoers will be 10663 / 11848 / 130.33 million respectively, and in the case of a high base in 2019, 10% of the same number as the same period last year.
Average ticket price: the average ticket price is determined by film format and ticket subsidy. The ticket price of 3D and IMAX films is significantly higher than that of 2D films. Among the seven films scheduled for the National Day in 2020, the number of 3D films accounted for 43% and the number of IMAX films accounted for 57%. Taking into account the film format and ticket subsidy, CICC estimated that in the three cases of conservative / neutral / optimistic, the average ticket prices were 33.67, 34.38 and 35.08 yuan, respectively, compared with the same period of last year.
According to the above assumptions, through the box office dismantling method, CICC predicts that the box office of the 2020 National Day file (October 1-8, 2020) is expected to reach 36-4.6 billion yuan, which is 110% compared with the same period last year (October 1-7, 2019).
Chart: forecast of the 2020 National Day box office (excluding service charges)
Source: Yi en, China International Capital Corporation Research Department
Note: box office statistics do not include service charge.
The increase in the number of moviegoers driven by high-quality content has a greater impact on the box office recovery, and the film market is expected to gradually return to normal from the National Day file, with a neutral estimate that the box office may reach 15 billion yuan in 2020. In the short term, you can focus on the trading opportunities brought about by a single film that exceeds expectations at the box office. In the medium and long term, it is recommended to pay attention to the improvement of the market share of the cinema line brought about by the further integration of the cinema industry.
Risks: repeated health events, lower-than-expected box office performance of headline films, and tighter industry policies.
Edit / Ray