WANDA FILM(002739)2022-04-28 16:00Business Expansion and Strategy - Wanda Film's main business has expanded from primarily cinema operations to include film investment, production, distribution, and related derivative businesses, covering the entire industry chain [11]. - Future outlook includes a focus on expanding cinema investments and enhancing film production capabilities to capture a larger market share [11]. - Wanda Film aims to strengthen its market position through strategic acquisitions and partnerships within the entertainment industry [11]. - The company is actively developing new technologies and products, including advanced cinema formats like Dolby Cinema and its proprietary PRIME theaters [7]. - The company plans to continue adapting to the evolving market conditions and focus on recovery strategies post-pandemic [23]. - The company plans to pursue strategic acquisitions to enhance its competitive position, targeting a minimum of two acquisitions in the next 18 months [138]. - The company will continue to innovate and implement refined management to transform into a technology-driven, platform-oriented, and ecological entertainment company [90]. - The company plans to further consolidate its market position and expand its operational scale, focusing on enhancing the content segment and improving overall performance [90]. Financial Performance - The company's operating revenue for 2021 was ¥12,490,346,327.79, representing a 98.40% increase compared to ¥6,295,481,617.12 in 2020 [15]. - The net profit attributable to shareholders for 2021 was ¥106,333,250.94, a significant recovery from a loss of ¥6,668,695,499.15 in 2020 [15]. - The net cash flow from operating activities reached ¥2,981,031,422.41, marking a 518.31% increase from ¥482,122,394.75 in the previous year [15]. - The total assets of the company increased by 24.21% to ¥29,159,583,437.21 in 2021 from ¥23,476,060,766.72 in 2020 [16]. - The total revenue for the company in 2021 was 12.49 billion yuan, a year-on-year increase of 98.4%, with a net profit of 106 million yuan attributed to improved operational strategies [33]. - The company's gross profit margin for the film industry was 27.15%, with a significant increase in gross profit from ¥9,098,805,833.48 in 2021 compared to ¥6,963,110,580.85 in 2020 [59]. - The company achieved a net profit of 4.21 billion yuan in 2021, falling short of the performance commitment of 10.69 billion yuan for that year [172]. - The cumulative net profit from 2018 to 2021 was 1,521,616,106.41 yuan, which is only 55.94% of the promised cumulative net profit of 2,720 million yuan [180]. Market and Industry Insights - The total box office revenue for the Chinese film market in 2021 was ¥47.26 billion, recovering to 70% of the 2019 levels [23]. - In 2021, domestic films accounted for 84.5% of the total box office in China, with 529 out of 572 new releases being domestic films [25]. - The box office contribution from holiday periods increased from 22.5% in 2019 to 36.3% in 2021, indicating a growing reliance on key release periods [27]. - The company's box office revenue reached 6.22 billion yuan in 2021, a decline of 20.6% compared to 2019, while the total box office in China was 47.26 billion yuan, down 26.5% from 2019 [35]. - The film industry faced significant challenges due to the pandemic, with national box office and audience numbers recovering to only 70% of pre-pandemic levels [176]. Operational Developments - The company opened 61 new self-operated cinemas and closed 9 underperforming ones, resulting in a total of 790 cinemas and 6,750 screens by the end of 2021 [38]. - The number of cinemas in lower-tier cities has increased significantly, with over 50% of new cinemas opening in fourth-tier and below cities, indicating a market expansion strategy [30]. - The company is focusing on enhancing non-box office revenue streams, including advertising and merchandise sales, to improve overall profitability [32]. - The company launched the new Wanda Movie APP in April 2022, transforming it into a comprehensive platform integrating content, entertainment, and social features [39]. - The company plans to open 60-70 new cinemas in 2021 while continuing to evaluate and close underperforming cinemas to enhance overall asset quality and operational efficiency [144]. Risk Management and Compliance - The company has implemented risk management strategies to address various operational challenges and market uncertainties [3]. - The company emphasizes the importance of maintaining accurate financial reporting and compliance with regulatory standards [2]. - The company acknowledges the risk of performance volatility in the film industry and will ensure key projects are released as planned to improve operational performance [100]. - The company emphasizes the importance of regulatory compliance in the film industry, highlighting the strict licensing requirements for production, import, and distribution, which if not adhered to, could lead to significant investment losses [104]. - The company has implemented comprehensive safety management systems, including emergency response plans and sanitation protocols, to mitigate public safety risks associated with high audience volumes in cinemas [105]. Corporate Governance - The company’s governance structure is robust, with a complete and clear internal governance framework, ensuring compliance with relevant laws and regulations [108]. - The company has established a sound internal control system, integrating checks into daily operations to ensure compliance and operational efficiency [115]. - The company maintains complete independence from its controlling shareholders in terms of business, personnel, assets, institutions, and finance, ensuring autonomous operational capabilities [117]. - The company has established an independent financial department with a dedicated accounting system, ensuring no shared bank accounts with controlling shareholders [122]. - The company has a complete and independent governance structure, with clear responsibilities and rights between the company and its controlling shareholders [120]. Employee and Social Responsibility - The company received the "China Annual Preferred Employer" award, highlighting its commitment to employee welfare and career development [168]. - The company actively participated in social responsibility initiatives, including free movie screenings for healthcare workers, benefiting over 34,000 medical staff [164]. - The company organized multiple public welfare film screening events, engaging with various charitable organizations [163]. - The company implemented a training program that included 34 training sessions aimed at developing management talent in various operational roles [151]. - The company has established a three-tier training management system to enhance employee skills and management efficiency [150]. Future Outlook - Future outlook indicates a projected revenue growth of 15% for the next fiscal year, driven by new product launches and market expansion [138]. - The company is focusing on the development of new technologies, with an investment of CNY 500 million allocated for R&D in 2022 [138]. - Market expansion efforts include entering three new international markets by the end of 2023, aiming for a 10% increase in global market share [138]. - The management team emphasizes a commitment to sustainable practices, aiming for a 20% reduction in operational costs through efficiency improvements by 2024 [138].