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By Vince

Editor: Zhang Ju

On July 16, "Catching Dolls" (also known as "Successor Plan"), starring Shen Teng and Ma Li, was officially released in major theaters. According to Maoyan Professional Edition data, as of 8:50 a.m., its preview and pre-sale reached 518 million yuan. As can be seen from the figure below, the box office data of "Catching Dolls" is far ahead, far exceeding the still popular "The Silence" and "Despicable Me".

Behind the box office success, there is also a reflection of the carnival of a number of capital parties. Behind "Catching Dolls" are companies such as Wanda Film, Happy Twist Films, Alibaba Films, China Film, Maoyan Films, and Hengdian Films. These listed companies that are inextricably linked to it are all being promoted by institutions, and are expected to achieve a win-win situation in terms of box office and stock prices with the help of the summer season.

Summer box office has exceeded 4.2 billion yuan

"Catching Dolls" is expected to reach over 1 billion yuan

According to real-time data from Lighthouse Professional Edition, as of 22:00 on July 14, the total box office of the 2024 summer movie season exceeded 4.2 billion yuan. Usually the summer season refers to the three months from June to August. From a time perspective, this year's summer season is already halfway through. Looking back at the performance of the 2023 summer season, the total box office of movies was about 20.619 billion yuan. "All or Nothing", "Gone with the Wind" and "The First Part of the Gods" ranked the top three with box office revenues of 3.526 billion yuan, 3.523 billion yuan and 2.481 billion yuan respectively.

According to data released by Top Research Institute on July 15, there was a lack of films with box office revenue of over 1 billion yuan in the first half of the year, with only four films, "Hot and Spicy", "Speeding Life 2", "Article 20" and "Boonie Bears: Reverse Time" having box office revenue of over 1 billion yuan. So far, there has been no film with box office revenue of over 1 billion yuan in this summer season. If the box office performance of last summer season is to be surpassed, on the one hand, it is hoped that the box office of existing films will continue to soar, and on the other hand, great hopes are placed on newcomers, and the most important one is "Catch the Dolls", which was released with great difficulty after many twists and turns.

It is expected to stand out in the summer season, strive for more than 1 billion yuan, and boost the box office of the 2024 summer season.

From the plot point of view, "Catching Dolls" is a comedy film with the theme of "chicken babies" which is common nowadays. It is very suitable for the release time of summer season. At 8:50 am on July 16, the film scored 7.5 on Douban, and the preview and pre-sale reached 518 million yuan. As shown in Figure 1, "Catching Dolls" ranked first in box office share, screening times, screening share and attendance rate, showing super box office appeal.

In addition, through the Meituan Movie column, we can see that the "Catching Dolls" poster has always been placed in a prominent position. Figure 3 is the promotion of the performances on Meituan Movie on July 15 and July 16.

In addition to "Catching Dolls", "Silent Killing", which is about the current social concern about school bullying, is also expected to hit over 1 billion yuan.

Judging from the screening schedule for this month, there will be many new films worth looking forward to, such as "The Decoded", "Your Name", "Under the Aliens", "White Snake: Floating Life", "Deadpool vs. Wolverine" and Xu Zheng's "Counterattack Life".

A number of listed companies are enjoying a capital carnival

Maoyan Entertainment, Wanda Films, and China Films are receiving attention

In addition to the main creators such as the director, screenwriter and actors, the investment of the capital behind a film cannot be ignored. The essence of capital is to pursue profits, especially the investment in commercial films; the big sales of the film not only bring considerable box office revenue, but also for the listed companies behind it, it is expected to drive funds in the secondary market to push up the stock price, achieving a win-win situation for both box office and stock price.

So what kind of capital is behind the currently popular movie "Catching Dolls"?

The film is produced by Xihong City Film, Wanda Film, Kaixin Mahua Film, Ruyi Film, Alibaba Film, China Film and other companies, and co-produced by New Classics Media, Maoyan Film, Hengdian Film, Penguin Film, Youku and other companies. The lineup is luxurious. Specifically, it includes A-share listed companies Wanda Film, China Film, Hengdian Film and Hong Kong-listed Maoyan Entertainment and Alibaba Pictures. 。

Although the investment proportions of these investors are unknown, subsequent investors may be able to find clues in the relevant financial statements of listed companies. Top's film market research report for the first half of 2024 also pointed out that among listed production companies, China Film Group Corporation has the highest cumulative box office, followed by Hengdian Film and Television, and Alibaba Pictures, China Confucianism, and Maoyan Entertainment are closely behind. Among listed theaters, China Film Group Corporation and Wanda Films rank first in box office, followed by Shanghai Film Group Corporation.

Driven by the expected speculation in the capital market, the stock prices of these listed companies have shown signs of abnormal movement as the film is released; and relevant institutions have already entered the market, such as In the first quarter, relevant investment institutions increased their holdings or made new investments in Wanda Film, China Film and Hengdian Film. Maoyan Films also recently received an "overweight rating" from Morgan Stanley.

Judging from their performance, Wanda Film was the first to "preview": on July 10, Wanda Film released its first-half performance forecast. Its net profit after deducting non-recurring gains and losses in the first half of the year was RMB 71 million to RMB 101 million, down 75.67% to 82.90% from the same period last year (see Figure 4).

In the performance forecast announcement, Wanda Film explained the reasons for the change in performance in the first half of the year: in the first half of 2024, due to the insufficient supply of top films in the second quarter and the sluggish box office performance of the market, the overall recovery of the Chinese film market fell short of expectations. From April to June 2024, the national box office was 7.42 billion yuan, a year-on-year decrease of 28.7%, and only 58.5% of the same period in 2019; the number of moviegoers was 180 million, a year-on-year decrease of 31.2%, and only 55.8% of the same period in 2019. Except for some popular periods, the box office was relatively cold during non-holidays.

During the reporting period, the company's domestic cinemas achieved box office revenue of 3.13 billion yuan (excluding service fees), a year-on-year decrease of 14.5%, and the number of moviegoers was 75 million, a year-on-year decrease of 14.3%. At the same time, affected by the overall decline in the overseas film market, the box office revenue of the company's Australian cinema chain was lower than expected, and the high fixed costs such as cinema operating rent and depreciation resulted in the company's cinema chain segment losing money in the second quarter.

Although the film market was relatively flat in the second quarter, with the arrival of the summer season, Wanda Films is still confident that the market will continue to recover in the second half of the year. The company said that as of now, important films such as "Catch the Doll", "Reverse Life", "Under the Alien", "Decryption", "Legend", "White Snake: Floating Life", "Despicable Me 4", and "Deadpool and Wolverine" have been scheduled, with rich genres and diverse themes. High-quality head films are expected to promote the continued release of viewing demand, drive the steady growth of the overall box office and the number of viewers, and are expected to have a positive impact on the film market and the company's theater operations.

In the second half of 2024, the company's film reserves are also relatively rich. The films it produced and distributed, "Catching Dolls" and "White Snake: Floating Life", have been scheduled for July 16 and August 10. The film it participated in, "The Silent Killer", is currently in theaters, "Under the Alien" and "The Decryption" will be released on July 26 and August 3, and "The Accidental Detective 3", "A Cloud Like You", "Lie Lie Lie Lie" and other films are also expected to be released within the year. The company's content performance is also expected to be further improved.

After sorting out Wanda Film's institutional holdings in the first quarter, it was found that among the top ten floating shareholders, QFII, Southern Fund, China Merchants Securities and Xingquan Fund all increased their holdings (see Figure 5).

In addition, with the popularity of "Catching Dolls", Maoyan Films, listed on the Hong Kong stock market, brought about the expected market improvement. According to the latest report of Morgan Stanley on July 15, Maoyan Entertainment's stock price is expected to outperform the industry in the next 15 days, with a probability of 60% to 70%, a target price of HK$11.6, and an "overweight" rating. The reason is that with the blockbuster "Catching Dolls" causing heated discussions last weekend, the market is expected to improve. Morgan Stanley raised the box office forecast of "Catching Dolls" from the previous 2 billion yuan to more than 3 billion yuan, and believes that there is a possibility of upward box office forecasts for the summer season. The bank believes that Maoyan Entertainment will benefit from blockbusters and a better-than-expected movie market.

The summer season may be a boost for the film market

Expect more hits to come, and content quality is the core

The summer movie season is hot, especially blockbuster movies like "Catch the Dolls", which may inject a powerful shot in the arm to the domestic film market which is still on the rise overall.

According to Top Data, the total box office of mainland movies in the first half of 2024 was 23.773 billion yuan, a year-on-year decrease of 9.50%, recovering to 76% of 2019. The lack of blockbuster movies and the lack of driving force of the head movies on the market are the main reasons for the decline in the market box office. In terms of theater operations, the box office volume of theaters has declined significantly, and the number of high-yield theaters with box office of 2.5 million yuan and above is only 60% of that in 2019. However, the number of theaters in operation and newly built in the first half of the year has returned to positive growth. Among them, there are 12,700 theaters in operation, an increase of 4.6% year-on-year. There are 508 newly built theaters, an increase of 29.9% year-on-year, and the increase in number is mainly concentrated in February.

At present, consumers' enthusiasm for watching movies is still recovering. In the first half of the year, the overall enthusiasm in the sprint stage one week before the release was weak. Among the top films, the box office growth was more driven by word-of-mouth (see Figure 6).

At present, producers are still the big winners in the film industry, especially in blockbuster movies. There is still no shortage of blockbuster content in the new films that will be released in the future (Figure 7). It is recommended to pay attention to key film producers, cinema chains and ticketing companies, including Wanda Film, Bona Film Group, Maoyan Entertainment, Alibaba Pictures, Happy Blue Ocean, Hengdian Film and Television, Shanghai Film, China Literature Group, China Film, etc.

In addition, as mentioned above, more and more movies are released through word of mouth, which requires high-quality content to touch the audience. Content is the core competitiveness of a movie. The development of technology can make the shooting images more and more impactful, but what really touches the heart, makes people remember and is widely spread is still the content itself.

Looking back over the past few decades, all the inherited film and television works praised as classics at home and abroad are without exception. This is the premise for a movie to become a hit. Listed companies such as China Literature Group successfully adapt excellent online works into film and television works, thus promoting the linkage of the IP industry chain. , which generates huge commercial value!

(The individual stocks mentioned in this article are for example analysis only and are not investment advice.)