Investment Rating - The report maintains a "Buy" rating for Alibaba Pictures (1060.HK) with a target price of HKD 0.54, compared to the current price of HKD 0.41 [2]. Core Insights - Alibaba Pictures reported FY25H1 revenue of RMB 3.05 billion, a year-on-year increase of 17%, with a gross profit of RMB 1.32 billion, reflecting an 18% growth. The adjusted EBITDA was RMB 640 million, up 39% year-on-year, while the net profit attributable to shareholders decreased by 27% to RMB 337 million due to investment impairments [2][5]. - The growth in revenue is primarily driven by the performance of the live entertainment market and the consolidation of the Damai platform. The company aims to increase the share of live entertainment revenue to 20%-30% of total revenue [2][5]. Summary by Sections Revenue Performance - The revenue breakdown shows that content business revenue was RMB 1.22 billion, down 17.3% year-on-year, attributed to a sluggish film market. The company has around 70 films in its pipeline, with 35 awaiting release, including key titles like "Feng Shen Part II" and "The Murder Case 3" [2]. - Ticketing and technology platform revenue reached RMB 1.23 billion, a significant increase of 138.6% year-on-year, driven by the rapid growth of Damai's ticketing business [2]. - The IP derivatives business generated RMB 600 million, a decline of 3.4% year-on-year, mainly due to last year's inclusion of Damai's agency revenue [2]. AI Investments and Innovations - The company is enhancing its AI capabilities across various business forms, including virtual filming and digital avatars. Two virtual filming studios are operational, and three more are under construction, aimed at reducing production costs and improving user experience [2]. - The introduction of digital personas has led to successful commercial collaborations, and AI is expected to participate in 70% of material production in the future [2]. Profit Forecast and Valuation - The profit forecast for FY25-FY27 has been revised down to RMB 531 million, RMB 849 million, and RMB 1.026 billion, respectively, reflecting a decrease of 35%, 10%, and 1% from previous estimates [2]. - The valuation has been adjusted to an 18x PE ratio based on FY26 earnings, maintaining the target price of HKD 0.54 [2].
阿里影业：FY25H1业绩点评：电影市场承压，大麦&阿里鱼表现亮眼