Hengdian Entertainment (603103) Guohai Securities·2024-10-30 09:05Investment Rating - The investment rating for the company is "Buy" (maintained) [1][6][9] Core Views - The company's performance is under pressure due to a sluggish box office market, with Q3 2024 revenue at 450 million yuan, down 42.39% year-on-year, and a net loss of 71 million yuan, down 157.75% year-on-year [2][3] - The company is expanding its cinema operations, increasing its market share, with a Q3 2024 box office of 367 million yuan, down 42.48% year-on-year, but up 51.65% quarter-on-quarter [4][5] - The company has a strong asset synergy within the group, with significant film reserves expected to perform well during the upcoming Spring Festival [5][6] Summary by Sections Financial Performance - Q3 2024 revenue was 450 million yuan (YOY -42.39%, QOQ +39.33%), with a net loss of 71 million yuan (YOY -157.75%, QOQ +45.46%) [2][3] - For the first three quarters of 2024, revenue totaled 1.616 billion yuan (YOY -17.27%), with a net profit of 17 million yuan (YOY -92.63%) [3][4] Market Position - The company has a market share of 3.73% as of Q3 2024, with 449 operating cinemas and 2869 screens, showing an increase from the previous half-year [4][5] - The overall box office for Q3 2024 was 9.839 billion yuan, down 44.17% year-on-year, but up 46.94% quarter-on-quarter [3][4] Future Outlook - The company has a strong pipeline of films set for release, including major titles expected to perform well during the 2025 Spring Festival [5][6] - Revenue projections for 2024-2026 are 2.035 billion yuan, 2.562 billion yuan, and 2.841 billion yuan respectively, with net profits expected to recover significantly by 2026 [6][7]