Investment Rating - The report maintains a "Buy" rating for the company with a target price of HK10.68 [1][2][11]. Core Insights - The company is expected to lead the industry due to its expanding market share and increased investment in top films, despite a slight downward adjustment in the 2024 box office growth forecast [4][5]. - The report highlights a strong performance in 2H23, with revenue soaring 127% year-on-year to RMB 2.56 billion and adjusted net profit reaching RMB 573 million, indicating a profit margin of 22.4% [4][8]. - The company plans to increase its investment in major films to capture box office revenue potential, with expectations of a 10% revenue growth in 2024 [5][11]. Financial Summary - Revenue for 2024 is projected at RMB 5.23 billion, reflecting a 9.9% year-on-year increase, with entertainment content services expected to grow by 11% [9][10]. - The adjusted net profit for 2024 is estimated at RMB 1.09 billion, with a net profit margin of 20.7% [10][12]. - The company’s earnings per share (EPS) for 2024 is forecasted to be RMB 0.94, with a price-to-earnings (P/E) ratio of 11x based on the 2024 earnings [3][12]. Market Performance - The company’s market capitalization stands at approximately US5 million [2]. - The stock has shown a 52-week high of HK6.32, indicating significant volatility [2]. Industry Outlook - The report expresses a cautious outlook on the Chinese film industry, anticipating a modest 4% growth in box office revenue for 2024 due to a decrease in contributions from major films and slow macroeconomic recovery [5][11]. - Despite the overall industry challenges, the company is positioned to outperform its peers, leveraging its strong content library and marketing capabilities [5][11].
2H23业绩强劲；增加头部影片投资以抓住票房收益潜力