\u3000\u3000 Wanda Film Holding Co.Ltd(002739) (002739)
Double factors led to the weak box office last year, and the logic of cinema recovery in 2022 is good for the screening end
In 2021, the national box office reached 42.86 billion yuan (excluding service fees), about 72% of that in 2019; According to the company's performance forecast, Wanda Film Holding Co.Ltd(002739) achieved a box office of 6.22 billion yuan in China in 2021, about 75% of that in 2019, and about 740 million yuan in Australia, about 92% of that in 2019. Although the epidemic situation in China was generally stable in 2021, the China Film Co.Ltd(600977) market was affected by the dual factors of projection end and supply end, and the annual box office performance was lower than expected. From the screening end, the repeated epidemic situation in some areas and the tightening of prevention and control policies have affected the scheduling of films. The supply of important films such as summer films is insufficient, which is about 10 billion less than the peak box office in previous years. From the supply side, the supply of Hollywood films is greatly affected by the epidemic: the number of imported films in 2021 is nearly half lower than that in 2019, and the box office is reduced by about 15 billion, accounting for 15.5% from 37.5% in 2019. Judging from the current trend of epidemic prevention and control policies and the progress of treatment technology, the negative impact of the epidemic on Chinese cinemas will accelerate in 2022, and the supply of domestic films will be relatively sufficient. At the same time, the supply of Hollywood films has initially recovered since September last year, and the overseas box office of many films is high. Spider man: no return of heroes has also set the highest box office record since Fulian 4. In 2022, the recovery of Hollywood film supply will continue, and Dr. strange 2 and Thor 4 will be released one after another. Although the introduction of imported films in China is generally tight, due to the extremely low base last year and the indispensable role of imported films in the adjustment of box office in unpopular schedules, the release of imported films in Chinese cinemas is expected to gradually recover in 2022. Overall, the recovery rhythm of China and Australia film markets will contribute performance flexibility to the company in 2022.
The expansion rhythm of leading cinemas is steady, and the cost control after the epidemic is good
As of December 31, 2021, the company has 790 cinemas and 6750 screens in China, including 699 directly operated cinemas and 6063 screens. The cumulative market share of the company's cinemas (including franchising) in 2021 was 15.3%, maintaining a steady increase. Affected by covid-19 epidemic, the company previously slowed down the construction of cinemas. In 2021, after adjusting the construction plan of some cinema projects, the company will continue to maintain the steady expansion of cinema scale and continue to improve the market share of cinema business by means of self built cinema + franchise. According to the company's announcement, from 2022 to 2023, the company plans to build 50 new cinemas in Guangzhou, Shenzhen, Tianjin, Chengdu and other cities. On the cost side of the cinema business, the company strengthened cost control under the epidemic, and the construction cost of new cinemas was reduced. At the same time, the company actively carried out rent negotiation with the cinema property party, reducing the rent cost by reducing the minimum rent.
Script killing and selling innovation enrich the theater business ecology, and theater advertising is expected to accelerate the recovery
At present, the company cooperates with Shanghai Fengyuzhu Culture Technology Co.Ltd(603466) in some cinemas to pilot script killing business. In 2022, the company will test the water and cooperate with IP authorized companies to operate the project through self operation, joint venture and other modes. The company will also continue to promote the expansion of multi-functional cinemas. In terms of non ticket income, the company's sales business has recovered well. In the Spring Festival of 2022, the company laid out in advance and launched the plush dolls of the year of the tiger series, the blind box of fat tiger series, the key chain of adding wings to the tiger and other commodities. When the box office in the schedule was relatively lower than expected, the per capita consumption (SPP) of the products sold in the schedule reached 11.2 yuan, a record high, and the sales revenue was basically the same as that in 2021. In terms of cinema advertising business, the company's advertisers were greatly affected by the epidemic in 2021. In 2022, the company is expected to increase cooperation with key customers and accelerate the recovery of advertising business.
Wanda film and television's performance commitment has not been completed, and the profit contribution of content business in 2022 is expected to increase. The company's content business is greatly affected by the epidemic. The company's performance forecast has indicated that Wanda film and television has failed to complete its performance commitment in 2021. We believe that the company has made steady progress in its content business and gradually enhanced its project control, which is expected to increase profits with the recovery of the epidemic. In 2021, a number of films invested and controlled by Wanda film and television, a subsidiary of the company, were released successively, and the box office performance of "Chinatown detective 3" and "manslaughter 2" entered the top ten domestic films in the whole year. In 2022, the company also has rich content reserves and will actively layout all schedules. In addition to manslaughter 2, which will be released in the new year, brother, Hello, starring Wei Xiang, Ma Li and Chang Yuan, has been set for April 30. The warm comedy, no spring will not come with the theme of anti epidemic, Mozart in outer space with the theme of science fiction Many films mainly invested and controlled by the company, such as "want to see you" with the theme of emotional youth, the theme of "peacekeeping and riot prevention team" and "Star Art", are planned to be released this year.
Combined with the logic of industry recovery and the company's performance forecast, we expect the company to achieve an operating revenue of RMB 11.98/15.67/16.75 billion from 2021 to 2023, with a year-on-year increase of 90.4% / 30.7% / 6.9%, and a net profit attributable to the parent company of RMB 120 / 12.7/1.92 billion, with a year-on-year increase of - 101.8% / 961.7% / 50.9%, corresponding to EPS of RMB 0.05/0.55/0.83 and PE of 267.0x/25.1x/16.7x. We believe that the reasonable P / E ratio of the company is 34-36 times, and the target price in 2022 is 18.7-19.8 yuan. For the first time, give a "buy" rating.
Risk warning: the global covid-19 epidemic situation has deteriorated; Changes in national film and television regulatory policies; The promotion of film and television projects was less than expected.
