Nan Fang Du Shi Bao·2025-05-09 04:54Core Viewpoint - The capital market is showing a lack of confidence in the film industry, as evidenced by the planned share reduction by a major shareholder of Wanda Film, indicating ongoing challenges in the sector [1][3]. Company Summary - Wanda Film's major shareholder, Hangzhou Zhenxi Investment Management Co., plans to reduce its stake by up to 1.3927%, which amounts to over 3 billion yuan based on current stock prices [1][3]. - Hangzhou Zhenxi holds 135 million shares, representing 6.3927% of Wanda Film's total shares [3]. - The share price of Wanda Film has significantly declined from approximately 51.96 yuan per share in 2018 to 10.82 yuan per share currently, reflecting a nearly fivefold decrease over seven years [4]. Financial Performance - Wanda Film's revenue for 2024 is reported at 12.362 billion yuan, a year-on-year decline of 15.44% [4]. - The company has experienced three years of negative net profit over the past five years, with a staggering 203.05% decline in net profit for 2024, resulting in a loss of 940 million yuan [4]. - The return on assets (ROA) has been highly unstable, with a low of -27.39% in 2020 and a high of 3.6% in 2023, dropping to -3.96% in 2024, a decline of 210.2% [4]. Industry Context - The overall film industry is facing significant challenges, with the Chinese film market experiencing a notable downturn, as evidenced by a 22.6% drop in total box office revenue to 42.502 billion yuan in 2024 [5]. - The number of moviegoers also decreased by 22.3% to 1.01 billion, indicating a lack of blockbuster films contributing to the market's decline [5]. - Despite these challenges, there are signs of slight recovery in early 2025, with Wanda Film reporting a 23.23% increase in revenue to 4.709 billion yuan in Q1, the highest in four years [6]. Strategic Adjustments - Alibaba's decision to reduce its stake in Wanda Film may be influenced by its broader strategic shift towards more promising sectors like cloud computing and artificial intelligence, while divesting from non-core assets [7].