WANDA FILM(SZ:002739) Guoxin Securities·2025-03-31 04:00Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [2][6] Core Views - The recovery of the supply side is driving the industry upward, with content channels expected to jointly drive growth [2][3] - The company has a comprehensive layout in the film and television industry chain, and the new management team is expected to empower a new starting point for growth [3][5] - The film industry is anticipated to enter a prosperous period starting in 2025, driven by an increase in domestic film quality and the commercialization of IP [3][5] Company Overview - Wanda Film was established in 2005 and has formed a global layout in cinema and film investment. The company experienced a downturn from 2020 to 2022 due to the COVID-19 pandemic and mergers and acquisitions, but revenue and profit rebounded in 2023 [3][11] - The company’s revenue from 2011 to 2019 grew rapidly, but fluctuated significantly from 2020 to 2022. In 2023, revenue reached 14.62 billion yuan, a year-on-year increase of 50.8% [19][31] Industry Analysis - The film box office in 2024 is expected to decline by 22% year-on-year due to a lack of new films. However, the number of film registrations has been increasing since 2023, and 2025 is expected to be a big year for domestic films [3][39] - The high operating leverage of cinema companies means that their performance is significantly affected by box office fluctuations [42][47] Business Introduction - The cinema business is the main source of income for the company, maintaining a market share of 17.5% in 2024, the highest in the country. The revenue from cinema operations has ranged between 5 to 9 billion yuan in recent years [4][31] - The content production business has a revenue scale of 400 to 800 million yuan, with significant fluctuations in revenue and gross margin [4][31] Growth Analysis - The new controlling shareholder, China Ruyi, is expected to help the company re-enter an expansion phase after shedding the negative impacts of Wanda Group's real estate business [5][12] - The release of high-quality domestic films is expected to continue driving industry recovery, with AI technology potentially enhancing content production efficiency [5][6] Profit Forecast and Investment Suggestions - The company is expected to maintain steady growth in the cinema sector and profit potential in the content sector, with a target price of 15.2 to 15.9 yuan, implying a growth potential of 30% to 40% [6][19] - The forecasted net profits for 2024-2026 are -890 million, 1.58 billion, and 1.76 billion yuan, respectively, with corresponding P/E ratios of -28, 16, and 14 times [6][19]