HBMC(SZ:300027)2021-05-16 16:00Financial Performance - The total operating revenue for the reporting period was CNY 1,499.9988 million, a decrease of 33.14% compared to the same period last year[4]. - The net profit attributable to shareholders was CNY -1,048.06 million, an increase of 73.65% year-on-year[4]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY -1,018.4111 million, an increase of 74.03% year-on-year[4]. - The company's operating revenue for 2020 was ¥1,499,998,801.86, a decrease of 33.14% compared to ¥2,243,545,641.88 in 2019[16]. - The net profit attributable to shareholders was -¥1,048,059,957.34, an improvement of 73.65% from -¥3,977,691,690.71 in the previous year[16]. - The net cash flow from operating activities increased by 172.69% to ¥246,393,539.52, compared to ¥90,355,855.97 in 2019[16]. - The total assets at the end of 2020 were ¥9,602,346,304.29, down 11.34% from ¥10,830,053,589.99 at the end of 2019[17]. - The net assets attributable to shareholders decreased by 29.45% to ¥3,072,275,676.02 from ¥4,354,567,087.05 in 2019[17]. - The company reported a basic and diluted earnings per share of -¥0.38, improving by 73.24% from -¥1.42 in 2019[16]. - The weighted average return on equity improved by 24.82 percentage points to -27.37% from -52.19% in the previous year[16]. Impact of COVID-19 - The film industry was severely impacted by the COVID-19 pandemic, with nationwide cinema closures from January 24 to July 19, 2020[4]. - The company faced significant revenue decline due to the impact of COVID-19, with major film releases like "The Eight Hundred" grossing over 3.1 billion CNY and "The Battle at Lake Changjin" exceeding 1.1 billion CNY during the recovery phase[28]. - The cinema industry began to recover after the national cinema reopening notice issued on July 20, 2020[58]. - User engagement on the company's streaming platform increased by 15%, with a total of 5 million active users by the end of 2020[48]. - The number of moviegoers in 2020 was 3.229 million, a decrease of 69.5% year-on-year due to the pandemic[67]. Business Strategy and Development - The company continued to promote the "film + real scene" new business model and optimized its asset structure during the reporting period[5]. - The company focused on improving profitability by gradually resuming operations and launching new film projects, with several films entering post-production[6]. - The company is gradually exiting low-integration investment projects to enhance its core competitiveness in the domestic market[6]. - The company plans to focus on a "film + real scene" new business model to accelerate its return to healthy development[26]. - The company aims to deepen its film business and enhance the monetization channels of quality IP[26]. - The company is actively optimizing its asset structure and consolidating resources to strengthen its core competitiveness in the main business[26]. - The company has established a dual-core business model driven by film and real-life entertainment, enhancing its competitive edge through a comprehensive industry chain layout[30]. - The company is actively expanding its content production capabilities, with multiple projects in post-production and preparation stages, including films directed by renowned directors such as Stephen Chow and Chen Zhengdao[29]. Partnerships and Collaborations - The company has formed strategic partnerships with major players like Alibaba and Tencent, enhancing its content production capabilities and market reach[36]. - The company has established a global film content engine in collaboration with Hollywood directors, focusing on the investment and production of global super IP series[37]. - The company has integrated 20 years of international cooperation resources to build a platform for overseas distribution of Chinese films[37]. - The company has established multiple subsidiaries focused on various aspects of media and entertainment, including film production, advertising, and cultural events[127]. - The company has initiated a partnership with international studios to co-produce films, enhancing its global reach[132]. Future Outlook and Goals - The company anticipates a positive outlook for the upcoming year, driven by new product launches and an expanding audience base[46]. - Huayi Brothers plans to release 10 new films in 2021, aiming to recover from the losses incurred in 2020[48]. - The company has set a revenue target of RMB 1.5 billion for 2021, representing a 25% increase from 2020[48]. - The company expects a revenue guidance of RMB 2 billion for 2021, reflecting a growth target of 33%[50]. - Huayi Brothers aims to achieve a revenue growth rate of 10% in 2021, driven by new product launches and market expansion efforts[132]. - The company has set a performance guidance for 2021, projecting a revenue increase of 10% to RMB 3.85 billion[142]. Challenges and Risks - The company faces risks related to talent management, as the current talent pool may not meet the demands of its growth strategy[171]. - The revenue from commercial blockbusters is subject to fluctuations based on market performance and investment returns, which could impact overall income stability[172]. - The company has a high proportion of inventory, with in-process products accounting for approximately 32% of total inventory, reflecting the nature of film and television production[184]. - The company has established three development strategies: "Strong Core" strategy focusing on high-quality original content, "Big Entertainment Ecosystem" strategy for IP integration and operation, and a globalization strategy to enhance the global influence of Chinese culture[189][190]. Technological Investments - The company is investing RMB 500 million in new technology for film production and distribution to enhance operational efficiency[48]. - The company is investing RMB 200 million in new technology for enhanced viewing experiences, including IMAX and 4D cinema formats[50]. - Investment in new technology for digital content creation increased by 30% in 2020, totaling RMB 150 million[135]. - The company has invested RMB 200 million in new technology for film production, enhancing visual effects capabilities[142]. Market Expansion - Market expansion efforts include opening 20 new cinema locations across China in 2021, targeting tier-2 and tier-3 cities[48]. - Huayi Brothers is expanding its market presence in North America, targeting a revenue contribution of 20% from international markets by 2025[132]. - The company is expanding its market presence in Southeast Asia, targeting a 15% market share by 2023[136]. - The company aims to enhance its digital streaming services, targeting a 15% market share in the online film distribution sector by 2022[50].