Summary of the Conference Call for Damai Entertainment Industry and Company Overview - **Company**: Damai Entertainment - **Core Businesses**: - Damai Live Ticketing Platform - Aliyu IP Licensing and Film-related Business - **Market Position**: Leading provider of live entertainment ticketing services in China, actively expanding into overseas markets [2][4] Key Points and Arguments Damai Live Ticketing Platform - **Revenue Growth**: Expected revenue of 21 billion in 2024 with a gross margin of 64% [2] - **User Growth**: Monthly Active Users (MAU) increased from a few million pre-pandemic to 20 million in 2024, peaking at 50 million [2][7] - **Market Expansion**: Significant growth in the large concert market, from 3-4 billion annually (2016-2019) to approximately 30 billion in 2024 [2][9] - **Service Fee**: The platform's service fee rate is around 7-8% [6] Aliyu IP Licensing and Derivative Products - **Revenue Increase**: Revenue grew from 200 million in 2019 to 1.4 billion in 2024, with a total agency amount of approximately 4 billion USD [2][10] - **Partnerships**: Collaborations with well-known IPs like Sanrio and Pokémon, which have significantly contributed to revenue [11][12] - **SKU Development**: Over 30,000 SKUs launched through partnerships with more than 200 brands [13] Market Trends and Future Outlook - **Concert Market Growth**: The concert market is projected to reach 300 billion in 2024, indicating a rapid recovery and growth post-pandemic [9] - **IP Licensing Market**: China's licensed market is expected to become the fourth largest globally by 2025, with continued rapid growth anticipated [14] Content Production and Film Ticketing - **Ticketing Market Share**: Taopiaopiao holds a stable market share of 30-40% in the film ticketing sector [15] - **Content Strategy**: Ali Pictures has adopted a "dual dragon" strategy, focusing on both ticketing and high-quality content production, with a projected revenue of 500 million from series in 2024 [15][16] Additional Important Insights - **Seasonal Demand**: MAU shows seasonal fluctuations, particularly during peak concert seasons [7] - **Diverse Event Hosting**: Damai actively hosts various events, including music festivals and theater productions, to enhance its influence in the entertainment sector [8] - **Profitability Challenges**: Despite revenue growth, the content production segment faces low gross margins due to customized production costs [16]

Core Points - The "Wheelchair-Friendly Hall" project by Taopiaopiao has achieved significant progress, expanding its coverage to over 300 theaters in nearly 80 cities across China [1][3] - This initiative aims to enhance the viewing experience for wheelchair users by providing accessible seating options and clear information on theater layouts [2][3] - The project has received positive feedback from users, highlighting its role in improving accessibility and promoting social awareness regarding the needs of disabled individuals [7][8] Summary by Sections Project Overview - The "Wheelchair-Friendly Hall" initiative was launched by Taopiaopiao in collaboration with Alibaba Public Welfare to address the challenges faced by wheelchair users in accessing theaters [2] - The project includes a labeling function on the Taopiaopiao app, allowing users to identify theaters that meet accessibility standards [2][3] Implementation and Expansion - Following a pilot program in Beijing, Shanghai, and Hangzhou in 2024, the project has now expanded to over 300 theaters nationwide [1][3] - Users can easily find wheelchair-friendly theaters by searching for "Wheelchair-Friendly Hall" on the Taopiaopiao app [3] User Experience and Feedback - Users have expressed appreciation for the initiative, noting that it enhances their willingness to visit cinemas and enjoy films [7] - The project has been recognized for its contribution to the development of a more inclusive environment for disabled individuals [2][8] Future Plans - The project aims to continue expanding its reach and improve the quality of accessible viewing experiences in collaboration with industry partners [8] - Other initiatives under Alibaba Public Welfare, such as the Youku Accessible Theater and Taopiaopiao's "Starry Point" project, are also working to enhance cultural accessibility for various groups [8]

Investment Rating - The report assigns a rating of "Accumulate" for the company [5]. Core Insights - The company is a leader in the IP licensing and commercialization platform in China, with a strong presence in the concert ticketing service sector, continuously expanding the "Damai" brand influence [2][9]. - The IP derivative business is expected to be the primary growth driver, with significant revenue growth projected in the coming years [9]. - The company aims to accelerate its global strategic layout while leveraging its diverse IP matrix across various genres [9]. Financial Summary - Total revenue is projected to grow from 50.4 billion RMB in 2024 to 109.84 billion RMB by 2028, with a CAGR of 19.2% [3][12]. - Net profit is expected to increase from 285 million RMB in 2024 to 1.59 billion RMB in 2028, reflecting a substantial growth trajectory [3][12]. - The company anticipates an EPS of 0.03, 0.04, and 0.05 RMB for the fiscal years 2026, 2027, and 2028 respectively [9][12]. Revenue Breakdown - The IP derivative business is projected to generate 14.33 billion RMB in revenue for the fiscal year 2025, marking a 73% year-on-year increase [9][12]. - The concert ticketing segment, after the full acquisition of Damai, is expected to achieve revenues of 20.57 billion RMB in 2025, a 236% increase [9][12]. - The film segment is projected to see a decline in revenue, with a forecast of 2.71 billion RMB in 2025, down 9.6% year-on-year [12]. Valuation and Price Target - The target price for the company is set at 1.94 HKD based on an average of PE and PS valuation methods for the fiscal year 2026 [9][13]. - The report references comparable companies with an average PE of 50 times for 2025, indicating a favorable valuation outlook for the company [13][14].

Group 1: Online Ticketing Market Overview - The online ticketing market in China has evolved significantly, with the online ticketing rate increasing from 18.4% in 2012 to 86.3% in 2024 [2] - The entry of new players into the online ticketing market is anticipated to disrupt the current duopoly held by Maoyan and Taopiaopiao, which together control over 90% of the market [6][11] - The market has seen rapid growth and consolidation, with major platforms like Maoyan and Taopiaopiao leveraging their parent companies' resources for expansion [5][13] Group 2: Historical Development - The first online ticketing platform, Gewara, was established in March 2008, marking the beginning of the online ticketing era in China [2] - By 2014, online ticketing accounted for over 40% of the market, indicating a significant shift in consumer behavior and industry dynamics [3] - The rapid expansion of online ticketing platforms began in 2015, with multiple players entering the market and competing for market share [4] Group 3: Market Dynamics and Competition - The competition intensified with platforms like Baidu Nuomi and Weiying entering the market, but many faced challenges and eventually exited [9][10] - As of 2024, estimates suggest that Maoyan holds a market share of approximately 55-60%, while Taopiaopiao has around 30-35% [8] - The online ticketing market is characterized by high service fees, which have increased from 6.18% of box office revenue in 2017 to 9.48% in 2024, indicating a need for innovation [14] Group 4: Future Opportunities - The rise of the live event ticketing market presents new opportunities for growth, as it has surpassed the movie ticketing market in size [11] - New players could potentially disrupt the established order by addressing pain points such as high service fees and poor user experience in the online ticketing space [15][16] - The need for a third player in the movie ticketing market is emphasized, as it could inject vitality into the stagnant cinema market and provide a new rating system that is independent of existing production and distribution chains [16]

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [4]. Core Views - The company is positioned as a leading all-industry chain reality entertainment platform in China, engaging in content production, promotion, distribution, IP derivative licensing, and ticket management for entertainment activities [6][11]. - The IP industry is identified as a rapidly growing market with significant potential, with the Chinese IP market projected to grow from 91 billion yuan in 2020 to 126.2 billion yuan by 2024, reflecting a CAGR of 8.5% [30][35]. - The company is expected to achieve substantial revenue growth, with projected revenues of 78.91 billion yuan, 95.34 billion yuan, and 116.83 billion yuan for FY26, FY27, and FY28 respectively, representing year-on-year growth rates of 18%, 21%, and 23% [6][19]. Summary by Sections Company Overview - The company operates through three main segments: content production, ticketing and technology platforms, and IP derivatives, leveraging resources from the Alibaba ecosystem [11][12]. - It has participated in the production and promotion of over 300 films, with significant contributions to the Chinese box office [11][12]. Financial Performance - The company reported revenues of 3.5 billion yuan, 5.04 billion yuan, and 6.7 billion yuan for FY23, FY24, and FY25, with year-on-year growth rates of 44% and 33% for FY24 and FY25 respectively [21]. - Adjusted EBITA for the same periods is projected at 310 million yuan, 500 million yuan, and 810 million yuan, with a consistent growth rate of 61% for FY24 and FY25 [21]. IP Market Insights - The IP industry is characterized by a dual-sided extension model, with significant growth opportunities in both upstream and downstream operations [27][30]. - The report highlights that the average unit licensing fee can leverage over 25 times the gross merchandise value (GMV) of licensed products, indicating a lucrative market potential [33]. Competitive Advantages - The company benefits from a robust integration of Alibaba's resources, enhancing its market position in ticketing and live entertainment [6][11]. - The report emphasizes the company's strong market share in ticketing, with nearly 100% coverage of major concert projects [6][11].

Group 1 - Alibaba Pictures has seen a significant stock increase of over 17%, with a cumulative rise of nearly 1.4 times since May 20, reaching HKD 1.12 per share and a trading volume of HKD 613 million [1] - CICC's research report suggests that Alibaba Pictures should consider rebranding to Damai Entertainment, focusing on four strategic directions: content leadership, user growth, enhanced commercial derivative capabilities, and active overseas expansion [1] - The report highlights the entertainment sector's peak season from May to October, with a projected 5.1% year-on-year growth in ticket sales for large-scale performances during the 2025 May Day holiday [1] Group 2 - Huachuang Securities indicates a strong recovery for the company in 2025, with a stable market share for Taopiaopiao and several major films like "Catching Spies" and "East Extreme Island" expected to contribute to growth [2] - The live performance sector is anticipated to continue its growth trajectory, with Damai leading in the primary ticketing market and benefiting from this growth [2] - Alibaba's IP derivatives, including partnerships with brands like Sanrio and Pokémon, are expected to enhance revenue through e-commerce channel development and brand incubation [2]

Summary of Alibaba Pictures Conference Call Company and Industry Overview - **Company**: Alibaba Pictures, recently rebranded as "Damai Entertainment" to emphasize its focus on high-quality content and live entertainment [2][6] - **Industry**: Live entertainment and IP licensing, with a strong emphasis on the growth of the IP industry and trendy toys [7][25] Key Points and Arguments Strategic Shift and Business Focus - The rebranding to "Damai Entertainment" reflects a strategic shift towards live entertainment and IP licensing, aligning with the company's efforts to inject quality assets and optimize its business structure [2][6] - The company has diversified its revenue structure into three main segments: films (40%), Damai (30%), and IP derivatives and innovative businesses (20%) [4] Financial Performance and Growth - In 2023, ticket revenue from live performances increased by 29% year-over-year, and by 150% compared to 2019, indicating a robust recovery in the post-pandemic market [2][5] - Alibaba Pictures is expected to maintain double-digit growth over the next three years, driven by strong demand for live events, particularly concerts and music festivals [10][11] - The company has returned to a growth trajectory, with net profit gradually turning positive and adjusted EBITDA steadily increasing, indicating improved operational conditions [9] IP Licensing and Market Position - Alibaba Fish, the leading IP licensing company in China and sixth globally, has seen a remarkable growth rate of 90%, benefiting from a shift towards ToC (business-to-consumer) operations [2][4][20] - The IP industry and trendy toy market are experiencing rapid growth, driven by young consumer demand, presenting favorable investment opportunities [7][8] Future Projections and Product Releases - The company is entering a new product release cycle in 2025, with several films set to launch, including sequels and new titles [3][15][16] - Revenue projections for fiscal years 2026 to 2028 are estimated at 8 billion, 9.08 billion, and 10.56 billion yuan, respectively, with net profits expected to rise correspondingly [24] Competitive Advantages and Market Strategy - Damai holds a leading position in the ticketing market, with a market share potentially reaching 57% to 70%, benefiting from its comprehensive service capabilities and strong relationships with artists and venues [12][13] - The company is actively expanding its upstream content planning and investment to enhance competitiveness, similar to successful models like Live Nation [14] Emerging Trends and Consumer Behavior - The demand for live performances is being driven by a significant increase in concert attendance, particularly among the post-2000 generation, which now represents over 40% of the audience [10] - The IP and trendy toy sectors are identified as key areas for growth, with companies like Alibaba Fish leveraging their IP resources to capture market share [22][25] Additional Important Insights - The company is focusing on both B2B and B2C strategies, with Alibaba Fish exploring online channels and product offerings to enhance revenue streams [22] - The competitive landscape in the trendy toy market is evolving, with new entrants and established companies alike capitalizing on the growing consumer interest in IP-related products [25][26]

Group 1 - The core viewpoint is that major film companies are shifting focus away from traditional movie production towards more interactive and immersive entertainment experiences, as exemplified by Alibaba Pictures rebranding to Damai Entertainment [3][4][5] - Damai has become increasingly important to Alibaba Pictures, with a revenue of 2.057 billion yuan in FY2025, representing a 38.8% year-on-year growth, and a segment performance of 1.230 billion yuan, up 338.5% year-on-year [5] - In contrast, Alibaba Pictures' film business is declining, with revenue of 2.712 billion yuan in FY2025, down 10% year-on-year, and a segment performance of 73 million yuan, down 91% year-on-year [6][7] Group 2 - Damai holds a leading position in the ticketing industry, achieving nearly 100% coverage of major star concerts and a market share of at least 57% in the live performance ticketing market [8][11] - The live performance market is experiencing significant growth, with concert ticket sales projected to exceed 26 billion yuan in 2024, a 78.1% increase year-on-year, while the film market is expected to see a total box office of 42.502 billion yuan, down 23% year-on-year [11][12] - The film industry is facing challenges due to the rise of short videos, leading to a polarization in profitability, where only top-tier projects can achieve significant returns while mid-tier projects struggle [13][15]

Core Viewpoint - The construction of an inclusive digital society in China is progressing, but significant challenges remain in bridging the "digital divide" for elderly and disabled individuals, necessitating collaborative efforts across various sectors to enhance accessibility and inclusivity in digital services [1][2][3]. Group 1: Action Initiatives - A joint initiative titled "Promoting High-Quality Development of Internet Accessibility for the Elderly and Disabled" was launched to address the urgent needs of 310 million elderly individuals and 85 million disabled persons in China [1][2]. - The initiative aims to integrate resources from internet companies and relevant organizations to implement the "Barrier-Free Environment Construction Law" effectively [1][2]. - The action plan includes specific goals, such as achieving a 100% upgrade rate for internet websites and service platforms funded by local governments by the end of 2026, with a minimum compliance rate of 90% [6]. Group 2: Challenges and Solutions - Despite notable achievements in information accessibility, challenges persist, including inadequate implementation of regulations, slow upgrades of government service platforms, and insufficient motivation among enterprises to enhance accessibility [3][4]. - The need for improved digital protection for the elderly is highlighted due to the rise in online scams and disputes, emphasizing the urgency of bridging the digital divide [3][4]. - The Chinese Blind Association stresses the importance of involving disabled individuals in the construction process and enhancing the evaluation and supervision systems for accessibility [4]. Group 3: Technological Innovations - The conference emphasized the role of technology in improving services for the elderly and disabled, with calls for increased investment in research and development for assistive technologies [6][10]. - Initiatives like the "Digital Partner Program" in Shanghai aim to create a multi-faceted approach to digital transformation, focusing on accessibility and inclusivity [9]. - Companies like Alibaba are leveraging technology to enhance accessibility, such as the "Wheelchair-Friendly Hall" feature on their ticketing platform and navigation tools for wheelchair users [10]. Group 4: Collaborative Efforts - The initiative encourages collaboration among government, industry, and social organizations to create a supportive environment for the elderly and disabled [2][11]. - Various organizations, including the China Aging Industry Association and the China Disabled Persons' Federation, are actively participating in this collaborative effort to ensure that digital advancements benefit all societal members [7][11]. - The conference highlighted the importance of international cooperation and shared experiences in building an inclusive digital society [2].

Summary of Alibaba Pictures Conference Call Company and Industry Overview - **Company**: Alibaba Pictures - **Industry**: Entertainment and Ticketing, specifically focusing on live performances and film production Key Points and Arguments 1. **Overall Market Performance**: The performance of the live performance market was robust, with total box office revenue reaching 58 billion yuan, a year-on-year increase of 15%. Large concerts contributed over 26 billion yuan, growing by 78% [2][3] 2. **Damai Entertainment Growth**: Damai Entertainment reported revenues of 2.057 billion yuan and operating profits of 1.23 billion yuan, both showing significant growth [2][3] 3. **IP Development**: Alibaba Fish saw revenue growth exceeding 90%, with a core IP matrix that includes brands like Sanrio and Pokémon [2][3] 4. **Technological Advancements**: Damai Entertainment demonstrated significant technological advantages, with over 100,000 concurrent ticket buyers for thousands of events, a 60% increase year-on-year [2][5] 5. **Focus on Live Events and IP**: Alibaba Pictures is concentrating on live performances and IP development while maintaining a stable film business [2][6] 6. **Cautious Film Investment Strategy**: Due to market volatility, Alibaba Pictures is adopting a conservative approach to film investments, optimizing its portfolio and focusing on AI technology to reduce production costs [2][7][9] 7. **Future Market Outlook**: The offline performance market is expected to remain strong in 2025, although concert growth may slow down. The overall industry is projected to stabilize with new categories like tourism and sports events being explored [2][10] 8. **Diverse Revenue Streams**: Damai is expanding into new areas such as tourism and sports events, and its overseas business is thriving, with a focus on Southeast Asia [2][12] 9. **Ticketing Market Dynamics**: The ticketing market is complex, with Damai holding a significant share of large concert projects, having managed over 710 large concerts in 2024 [2][13][14] 10. **Sustainable Growth Focus**: Damai is prioritizing actual revenue and profit over mere market share, ensuring sustainable growth despite competitive pressures [2][15][16] 11. **Content Production Investments**: The company is investing in content production beyond ticket sales, including theater and musical projects, which have shown promising growth [2][11][28] 12. **Risk Management in Live Events**: The risk associated with live event investments is lower compared to film, with a stable revenue model based on ticket sales [2][29] Additional Important Insights - **Integration of Services**: The merger of Damai and Taopiaopiao into a super app aims to enhance user engagement and experience [2][19][20] - **Market Competition**: The company does not view overseas firms as direct competitors but rather as potential collaborators in content production [2][24] - **Regulatory Environment**: The Chinese government has mandated that a minimum of 85% of tickets must be sold in the primary market, impacting ticket distribution strategies [2][25][26] - **Future Project Pipeline**: Damai has over 120 projects in production or preparation, indicating a strong project pipeline for future growth [2][28]