\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 977 China Film Co.Ltd(600977) )
The company announced the financial statements of 2021 and the first quarter of 2022:
1) in 2021, the revenue reached 5.816 billion yuan, with a year-on-year increase of 97.16%; The net profit attributable to the parent company was 236 million yuan (last year - 556 million yuan); The net profit attributable to the parent company after deduction of non-profit was 93 million yuan (last year - 680 million yuan);
2) in 2022q1, the revenue was 946 million yuan, a year-on-year decrease of 24.83%; The net profit attributable to the parent company was 116 million yuan, a year-on-year decrease of 19.32%.
Comments:
The performance in the past 21 years was basically in line with expectations, and the epidemic caused performance fluctuations. In the first half of 2020, the national cinemas were shut down, and the film market was gradually repaired in 2021. The total box office of national films in 2021 was 47.258 billion, an increase of 131.46% over 2020 and restored to 73.53% in 2019. Under the trend of industry restoration, the company's performance improved significantly in 2021, with a revenue of 5.8 billion, a year-on-year increase of 97%, but it has not yet returned to the level of 2019 (the revenue in 2019 is about 9.1 billion). At the beginning of 2021, the epidemic was repeated in many places and cinemas in some areas were affected, resulting in the decline of the performance of 2021q1 company, realizing a net profit of 116 million, a year-on-year decrease of 19.32%, but the gross profit margin increased, with a gross profit margin of 29.05% (+ 7.75pct).
All sectors develop in a balanced manner and maintain a leading position in the industry. In terms of business: 1) the revenue of creative business is 1.158 billion (YoY + 250.5%). In 2021, the company produced and put on the market 24 films, including "above the cliff", "me and my parents", which are mainly invested and controlled by the company, accounting for 60.01% of the total box office of domestic films in the same period. The market share increased by 27pct and 42pct respectively compared with 2020 and 2019; 2) The revenue of distribution business is 1.847 billion (YoY + 96.3%), and the box office market of distribution films accounts for 76.74%, maintaining the industry leading advantage and market leading position of "China film distribution"; 3) The revenue of projection business was 1.148 billion (YoY + 118.4%), 7 new holding cinemas were opened and 9 closed, and the box office market share of holding cinemas reached 2.25%; The average single screen output is 919200 yuan, and the business indicators are leading in the industry; 4) The revenue of science and technology sector is 1.4 billion (YoY + 41.3%), and the equity acquisition of cinity has been completed. By the end of 2021, 60 cinity cinemas have been opened in China, and the market of China Film Barco, which has newly added screens in China, accounts for 50.8%. Overall, the company's businesses have developed in a balanced way. The film industry under the epidemic is facing a reshuffle. China film covers the whole film industry chain, and the leading effect is prominent.
Rich reserves of follow-up content, and vigorously participate in the investment or issuance of important domestic films to grasp the important schedule.
In the past two years, the company's content creation business has developed steadily, and has participated in many large-scale film projects. In 2022, the films "shuimen bridge of Changjin Lake" and "miracle" stupid child "won the first and third place at the box office respectively. The subsequent projects to be released or under production include" walking alone on the moon "," secretly in love with "orange born Huainan", "wandering Earth 2", "Chinese table tennis" and "Mozart in outer space"; In terms of distribution, the prosperity of domestic film content has improved. The company will increase its efforts to participate in the investment or distribution of important domestic films and grasp the important schedule. According to the announcement, the company will strive to control the distribution of 10 films in 2022.
Investment suggestion: at the beginning of 2022, the epidemic situation in many places across the country is repeated, and the impact or continuation of the epidemic situation in the short term will bring certain pressure on the company's performance. We expect the company's net profits from 2022 to 2023 to be 340 / 840 million respectively, corresponding to EPS of 0.18/0.45 yuan and PE of 55x / 22x. Considering the recurrence of the epidemic in 2022, we give the company a valuation of 25X in 2023 based on 2023, with a corresponding target price of 11.3 yuan and a rating of "overweight-a".
Risk tip: the epidemic has repeatedly affected the film schedule, the performance of participating films is less than expected, and the viewing demand is less than expected.
