Industry core view:
From the national box office trend after the Spring Festival in 2022, compared with the box office data in 2021, the decline from the 6th week to the 16th week (2.7-4.24) was more than 40%, and the decline after the Qingming Festival week was more than 60%. The reason is that the epidemic situation is severe, the quality of many foreign films is lower than expected, and the reputation is poor, which is difficult to drive the box office to recover. In terms of month on month comparison, excluding the 14th week of Qingming Festival, the box office increased by 89.07% and decreased by 68.85% year-on-year. The box office in the remaining weeks showed a downward trend in varying degrees. Judging from the current trend, the epidemic situation in various places has eased, and the number of cinemas has recovered, but the situation is still relatively severe. The May 1st file will be greatly affected, which is the same as that of the Qingming Festival. At present, many films have been withdrawn, and the box office performance is expected to be lower than expected..
Key investment points:
(I) eight films were withdrawn, and half of the remaining films were animated films, which was difficult to carry the box office. Of the 10 new films scheduled for May day earlier, only “I really hate long distance love” and “villain alliance” will be released as scheduled, and the other 8 films originally planned to be released on May Day, including “procuratorial situation”, “Hello brother”, “keep you safe” and so on, will be postponed. Half of the scheduled films are animated films, and the audience is relatively narrow, which will not stimulate the rebound effect of the box office of cinemas in the recent downturn as expected. From the perspective of film themes and audiences, Beijing Enlight Media Co.Ltd(300251) “I really hate long distance love” focuses on the emotional topic of “long distance love”, and is expected to become the largest domestic film in the schedule and lead the market; After the release of DreamWorks “bad guys alliance” in North America, its reputation quality has been highly praised and is optimistic about the long-term box office trend.
(II) the epidemic situation has slowed down and the number of cinemas has picked up. As of April 25, the total number of operating cinemas in China had decreased from 11822 in early February to 6316, with a national operating rate of 52.4%. According to the lighthouse professional version of the national cinema map, cinemas across the country have been affected to varying degrees. Among them, due to the severe epidemic situation in Shanghai, all cinemas have been closed. Jilin, Anhui and Qinghai have been seriously affected by the epidemic, and the business proportion of cinemas is less than 20%. The number of cinemas has picked up compared with the Qingming Festival, because the epidemic situation in various places has eased and cinemas have slowly resumed operation.
(III) the closure of all Shanghai cinemas will affect the national box office revenue, and the date of full resumption of operation is expected to be in the summer. Compared with 19 years ago, the May 1 box office in Shanghai has decreased by 1.31pct to 4.68%, but it is still far higher than the level in 2017 and 2018, accounting for a large proportion of the national box office. The epidemic situation in Shanghai is still severe, and it is difficult to predict the date when cinemas resume business. The suspension of cinemas in the city has a great impact on the box office of May 1. It is expected that the cinemas will fully resume normal operation until the summer. Investment suggestion: comply with the strict regulatory environment of the policy, promote industrial reform, and grasp the innovation needs brought by the post epidemic era and Z era. According to the data of the film and television sector, the performance of the film and television sector is relatively good in 2021. However, the repeated epidemic has led to lower than expected box office growth in 2022. At the same time, there are still some problems, such as insufficient high-quality films released in non schedule, insufficient introduction of external films, decline in film viewers and so on. There is no consensus logic of long-term holding. In the medium and long term, the cinema will enter the transformation of new business forms and seek performance breakthroughs in non scheduled periods.
Risk factors: stricter regulatory policies; Risk of recurrent outbreaks; The reputation of the new film is less than expected; Goodwill impairment risk.
