Haitong International released a research report stating that Maoye Entertainment (01896) maintains its “superior to market” rating. Overall net profit for 2023-2025 is estimated to be 770 million yuan, 1.06 billion yuan, and 1.28 billion yuan, with a target price of HK$1,828 million. Main revenue assumptions: 1) Online entertainment ticketing service: As of August 29, 2023, the net box office of movies nationwide was 38.655 billion yuan. The bank assumes that the net box office of national films will be 52 billion yuan in 2023, and that in 2024-2025, the net box office of national films will increase by 18% and 10%, respectively. Corresponding to 2023-2025, the online entertainment ticketing service revenue will be 2,273 billion yuan, 2,856 billion yuan, and 3.31 billion yuan.

Event: The 2023 interim report was outstanding, and the entertainment content service business performed brilliantly. In the 2023 interim report, the company's revenue was 2.197 billion yuan, up 84.4% year on year; gross profit margin was 50.1%, which was basically the same as the previous year; net profit of 405 million yuan, up 166.8% year on year.

Haitong International's main views are as follows:

The entertainment content service business is the largest main business, and the company has the ability to grasp high-quality content.

In the 2023 interim report, the company's entertainment content service business revenue was 1.1 billion yuan, up 85.7% year on year, accounting for 50.1% of revenue, up 5.3 pct from the previous year. The increase in revenue was mainly due to the number of domestic films that 2023H1 participated in the distribution/production of 24 domestic films (including 13 main films). The number increased significantly compared to the same period in the past, and many of these film projects performed excellently at the box office, such as “Manjianghong”, the director and production of the 51st title film “Man Jiang Hong”, the winner of the 51st edition “Life Is Unfamiliar” The file participated in the distribution/production of the video” “The Girl Who Disappeared”, “In an Octagonal Cage”, “30,000 Mile in Chang'an”, “Fengshen Part 1”, etc.

The company will continue to improve its publicity and film selection capabilities, and continue to strengthen the breadth and depth of participation in high-quality films. In the second half of 2023, the company distributed/produced the films “School Dad,” “I've Been Through the Storm,” “My Thoughts Are Forgotten,” “My Love History,” “It Doesn't Seem to Be That Hot,” “One and Four,” “Saving the Suspect,” and “The Annual Meeting Can't Stop”. “Golden Fingers” has been archived, and the films “Dangerous Line”, “One Shining Star,” and participated in the distribution/production of the films “Crisis Line,” “One Shining Star,” “The Fire Thief,” “Tibetan White Paper,” “Shook Beta's Pentagon Flying Saucer,” and “developed by the company Films such as “Genius Game,” “Children of Time,” “Umbrella Girl,” and “Rebirth” are all progressing steadily.

Continue to develop online entertainment ticketing service categories and service regions to enhance market participation and competitiveness.

According to the 2023 interim report, the company's online entertainment ticketing service revenue was 1,016 million yuan, an increase of 90.4% over the previous year, accounting for 46.2% of revenue. 2023H1, the company's 23 annual report quoted data from the National Film Administration. The total box office of the national film market was 26.27 billion yuan, +52.9% year-on-year. The company's online movie ticketing business continues to maintain its competitive advantage; the overall offline performance market is heating up rapidly. The total GMV and number of orders for the company's performances have exceeded pre-epidemic levels. At the same time, it continues to deepen business cooperation with large stadiums and various small and medium-sized performance venues in many places to develop ticketing services in various categories; continue to develop ticketing services for the Hong Kong City Ticketing Network.