SFC(601595) 国泰君安·2024-09-01 12:50Investment Rating - The report maintains a "Buy" rating for Shanghai Film (601595) with a target price of RMB 27.90, down from the previous target of RMB 35.28 [2] - The current stock price is RMB 18.17 [2] Core Views - The company's IP development business performed exceptionally well in H1 2024, with net profit exceeding the full-year 2023 results [3] - Major IP animation projects such as "Little Monster's Summer: Once Upon a Time in Langlang Mountain" and "Chinese Tales" Season 2 are expected to be released in 2025 [3] - The company's IP business is progressing faster than peers, with a projected 62.5% CAGR in net profit from 2024 to 2026 [9] Financial Performance - H1 2024 revenue reached RMB 380 million, up 2.4% YoY, with net profit attributable to shareholders of RMB 65.84 million, a 4.9% YoY increase [9] - Q2 2024 revenue declined 12.1% YoY to RMB 170 million, with net profit down 23.1% to RMB 22.97 million due to weak overall film market performance [9] - The company's subsidiary, Shangying Yuan, achieved RMB 64.05 million in revenue and RMB 21.16 million in net profit in H1 2024, representing 80.3% and 101% of 2023 full-year results respectively [9] Business Development - The company is actively transforming its cinema business by integrating "film + IP + space" resources to promote non-ticket innovative business growth [9] - Shanghai Film City SHO has hosted nearly 100 events, including film parties, premieres, and IP derivative activities [9] - The company is collaborating with Kaiying Network to launch an authorized game based on the "Black Cat Detective" IP, with other IP collaborations progressing steadily [9] Market Data - The stock's 52-week price range is RMB 16.43-34.43 [5] - Total market capitalization is RMB 8.144 billion [5] - The company has 448 million shares outstanding, all of which are A-shares [5] Financial Ratios - The current P/E ratio is 64.14x based on 2023 earnings, expected to decline to 29.17x by 2025 [10] - ROE is projected to increase from 7.7% in 2023 to 16.6% in 2026 [10] - Net profit margin is forecast to improve from 18.2% in 2023 to 32.4% in 2026 [11] Industry Comparison - The company's 2025E P/E ratio of 29.17x is higher than the peer average of 22.18x, reflecting its premium valuation due to faster IP business development [12] - Comparable companies include Hengdian Films (25.33x 2024E P/E), Enlight Media (21.58x), and Alpha Animation (41.86x) [12]