Core Viewpoint - The company experienced a decline in revenue and net profit in the first half of 2025, but is focusing on project expansion and content innovation to drive future growth [1][2]. Financial Performance - In the first half of 2025, the company achieved operating revenue of 1.08 billion, a year-on-year decrease of 8.3%, and a net profit of 384 million, down 29.8% [1]. - In Q2 2025, the company reported operating revenue of 519 million, a year-on-year decline of 16.06%, and a net profit of 145 million, down 51.49% [1]. - The overall gross margin decreased by 3.47 percentage points to 65.72% due to a decline in income from light asset output business [3]. - The net profit margin fell by 9.53 percentage points to 38.09% as a result of increased marketing expenses and a decrease in interest income [3]. Project Development - The company signed two light asset output projects, "Silk Road Eternal Love" in Qingdao and "East China Sea Eternal Love" in Taizhou, expected to generate a total service income of 520 million [2]. - The company is innovating content with a new large-scale live performance and upgrading existing projects to enhance visitor experience [2]. Marketing and Cost Management - The company increased marketing investments, leading to a rise in sales expense ratio by 2.79 percentage points [3]. - The management fee for existing light asset output projects was adjusted to 8% of annual operating income, which may reduce short-term income but is expected to foster long-term partnerships [2]. Profit Forecast - The company is projected to achieve net profits of 1.187 billion, 1.340 billion, and 1.452 billion for the years 2025, 2026, and 2027, respectively, with corresponding PE ratios of 20, 18, and 16 [3].

Investment Rating - The report maintains a "Buy" rating for the company [8] Core Views - In the first half of 2025, the company achieved operating revenue of 1.08 billion yuan, a year-on-year decline of 8.3%, and a net profit attributable to the parent company of 384 million yuan, down 29.8% year-on-year. In the second quarter of 2025, the company reported operating revenue of 519 million yuan, a year-on-year decline of 16.06%, and a net profit attributable to the parent company of 145 million yuan, down 51.49% year-on-year [2][6] - The company is focusing on its core performing arts business, streamlining operations. Upgrades to existing projects are enhancing reception capacity and economic efficiency, while new projects are gradually maturing and generating new contracts, establishing a foundation for stable long-term growth [2][6] - The company expects net profits attributable to the parent company for 2025-2027 to be 1.187 billion, 1.340 billion, and 1.452 billion yuan, respectively, corresponding to price-to-earnings ratios of 20, 18, and 16 times [2][6] Summary by Sections Financial Performance - In the first half of 2025, the company reported operating revenue of 1.08 billion yuan, down 8.3% year-on-year, and a net profit of 384 million yuan, down 29.8% year-on-year. For Q2 2025, revenue was 519 million yuan, a decline of 16.06%, with net profit at 145 million yuan, down 51.49% year-on-year [2][6] Project Development - The company is advancing both project expansion and content innovation. In the first half of 2025, it signed two light-asset output projects in Qingdao and Taizhou, expected to generate a total service revenue of 520 million yuan upon opening in 2026 and 2028 [2][6] - Existing projects are undergoing upgrades, such as the transformation of the Guangdong "Ancient Love" scenic area into a more adaptable theater, enhancing visitor experience [2][6] Marketing and Profitability - The company has increased marketing investments, leading to a short-term pressure on net profit margins. The overall gross margin decreased by 3.47 percentage points to 65.72% due to reduced income from light-asset output projects [2][6] - The company’s expense ratios increased, with sales expenses rising due to heightened advertising efforts, while overall net profit margin fell by 9.53 percentage points to 38.09% [2][6]

Core Viewpoint - Songcheng Performance (300144) has signed a strategic cooperation agreement with the Taizhou Bay New District Management Committee in Zhejiang Province for the construction of a large-scale performance project "East China Eternal Love" [1] Group 1 - The company and its wholly-owned subsidiary, Sanya Songcheng Wubian Technology Development Co., Ltd., have entered into a cooperation agreement with Taizhou Development Investment Group Co., Ltd. for the "East China Eternal Love" large-scale performance project [1]