Huayi Brothers (300027. SZ), who entered the moment of life and death, admitted in the first quarters performance forecast that as one of the representatives of the integration of film and television and culture and tourism, the companys main business has been greatly affected, and the overall revenue is expected to decline significantly compared with the same period last year.
On April 17, Huayi Brothers replied to the times weekly that despite the impact of the epidemic, the company will continue to concentrate all resources to strengthen its core business and accelerate its return to the fast track of healthy development. At present, the real projects in Haikou, Suzhou and other four places have resumed. Seven films such as Mermaid 2 which the company deeply participated in the investment and production also entered the post production.
There is a problem of overcapacity in the film and television industry. Shuffling is a matter of time, but this epidemic has brought the shuffling forward. On the same day, Liu Di, chairman assistant and deputy general manager of CGI digital cinema line under contemporary Oriental (000673. SZ), told time weekly that, however, more companies relying on film and television speculation will be washed out, and companies that are actually doing things seriously should survive.
A difficult journey
Listed companies are struggling, and a number of small and medium-sized film and television companies will go out of business in the epidemic. At present, many film and television companies with certain strength have gone out of business, or cut salaries. On April 19, Ni Shuang, chief analyst of Pacific Securities media, confessed to the times weekly.
On April 17, the closed video of Tianjin orange sky Jiahe Galaxy cinema attracted great attention on the Internet. However, the studio said that under the double pressure of operating cost and epidemic situation, it failed to wait until the day when it returned to work.
According to data from top think tank, the box office revenue of this orange sky Jiahe Galaxy movie city in 2019 reached 17.18 million yuan, ranking 566 out of 10000 movie cities in the country. A theater with such strength announced the curtain call, which also reflects the current industrys general dilemma.
Seeing the video of Tianjin Chengtian Jiahe Galaxy film city announcing the closure of its store, Zeng Jianguo (pseudonym), the head of Zhongying Xingna International Film City in Tongren City, Guizhou Province, mixed feelings. Just last week, he just dispatched a dozen full-time employees.
Theres no way. The company cant afford it. On April 19, Zeng Jianguo told the times weekly that he had received the news that his peers had changed their careers in the near future. He estimated that if they could not open in the past two months, more cinemas would not survive.
At this stage, he can only try his best to survive, selling masks and tea part-time, and developing new business subsidies for cinema wedding photography. But compared with the rent of 670000 yuan a month, these efforts are in vain.
On April 18, a CGv official confirmed to time weekly that there are indeed colleagues who have been laid off, but the specific proportion is not clear.
On April 16, a writer and producer of poly film, a subsidiary of Poly Culture (03636. HK), said, the impact of the epidemic on the industry is comprehensive, and no one can survive. At present, the company is basically in a state of suspension of pay and retention. .
Relying on the strong support of state-owned capital, he and his team successfully completed four or five films in the cold winter of last years film and television. But now, due to the epidemic and funding, the project originally planned to start shooting this year has not been launched, now I can only stay at home and write scripts..
Large area loss in advance in the first quarter
Affected by the epidemic, the performance of film and television stocks fell in the first quarter. In addition to a few listed companies with TV series and entertainment marketing as their main businesses, many film related companies have suffered losses to varying degrees, with Wanda film (002739. SZ) and Huayi Brothers suffering the most serious losses.
Among them, Wanda film lost RMB 550 million to RMB 650 million in advance, becoming the film and television company with the largest loss again after 2019. Jinyi film and television (002905. SZ) and happy blue ocean (300528. SZ), both of which are also theatre stocks, also suffered losses of more than 100 million yuan in advance.
It is worth mentioning that Huayi Brothers, Tang De film and television (300426. SZ), great wall film and television (002071. SZ), Jin Yi film and television and other companies have lost money for two consecutive years, and now they will face the risk of delisting if they encounter the epidemic black swan event again.
In the first quarter, Huayi Brothers lost 138 million to 140 million yuan in advance, and Tang De film and great wall film had a similar scale of losses, with a loss of 20 to 30 million yuan in advance.
Among the companies with film as their main business, only ray media (300251. SZ) made a profit in advance, but its net profit fell 56.33% - 78.17% year on year. Different from the struggling film companies and theater stocks, Huace film and television (300133. SZ), which accounts for a large proportion of the TV drama business, and Hualu banner (300291. SZ), which accounts for a large proportion of the marketing business, achieved a profit in advance and a year-on-year increase in net profit in the first quarter.
The performance of Listed Companies in the first quarter was dismal, and the share price of film and television stocks almost fell to the bottom.
According to wind data, in the first quarter of 2020, the film and television sector as a whole fell by more than 15%, and the total market value fell to 212.242 billion yuan compared with the highest level of 264.643 billion yuan in 2019.
Liu Di said that according to the understanding of the current situation within the industry, theaters may not officially return to work until September as soon as possible. As a result, the future performance of film and television companies may continue to be depressed.
Recently, AMC, which ranks first in the number of screens in the United States and is owned by Wanda holdings, reported bankruptcy application. Although the official rumor of Wanda film on April 14 said that the news was pure rumor, the current situation of AMC is not optimistic.
On March 26, AMC said in a statement that it will no longer pay the rent of its cinemas since April, and will lay off 600 employees, and temporarily suspend 25000 employees, including the CEO, to retain cash.
The international rating agency Standard & Poors rating (S & P) has given AMC yard waste rating (CCC -), which means that AMC is indeed facing the possibility of bankruptcy. AMCs share price has fallen more than 70% this year.
For AMCs current business situation and other issues, on April 16, the times weekly reporter sent an interview outline to Wanda film, which was not replied as of its publication.
Speed up shuffle
In Liu Dis view, most of the theaters have serious overcapacity, and the epidemic is just a domino to disrupt the status quo.
The data shows that while the number of cinemas and screens on the supply side has soared, the box office growth and the number of people watching movies on the demand side have slowed down. According to the statistics of the state film administration, from 2010 to 2016, the number of screens and cinemas increased by 30% or even 40% year on year, and only dropped to below 20% since 2017. In 2019, 8843 new screens will be added, with a total of 68922 screens and 12176 cinemas.
In 2019, the box office of the domestic film market reached 64.143 billion yuan, with a year-on-year growth rate of 3%; the annual growth rate of the number of movie viewers was 0.58%, far lower than the growth rate of 5.92% in 2018, a record low.
Ni Shuang also told the times weekly that in recent years, the gross profit margin of Chinese cinemas has continued to decline, which is related to the decentralization of the whole industry concentration. It is expected that in the future, some of the excess capacity will be eliminated or merged, and only less than 1 / 3 or even 1 / 4 of it will stay.
Some listed companies are seizing the opportunity of merger and acquisition to expand market share.
On March 8 and 9, Shanghai Film (601595. SH) announced that it, together with Shanghai Film Group and Jingwen Investment Co., Ltd., launched the first movie theater anti epidemic relief fund with a total scale of 1 billion yuan, and the first 200 million yuan has been in place. The fund will inject operation and development funds into the shadow investment and shadow management companies in the Yangtze River Delta region through capital increase, equity participation, M & A and other forms.
Shanghai films move is considered to be bottom copying by the outside world, and has triggered other listed companies to follow suit. On March 20, Jinyi film and television announced to set up a fund with a total scale of 800 million yuan with Tianjin Jinyi investment to invest around the upstream and downstream of the cinema.
Hengdian film and television (603103. SH) said in its 2019 annual report that it plans to open about 60 new theaters in 2020, which does not exclude the layout by merger and acquisition.
Liu Xin, an analyst at Minsheng Securities Research Institute, pointed out in the research report that the cash flow of many small and medium-sized cinemas in the industry was in a hurry. Shanghai Film Co., Ltd. established a joint venture capital management company, which launched the first shot of cinema merger and integration. It is expected that the process of merger and acquisition integration of the industry will be speeded up.
However, to what extent can the bottom copying M & a be implemented, some film and television executives hold a wait-and-see attitude.
On April 16, the head of the investment and Financing Department of a state-owned listed company told time weekly that the closure of the cinema is expected to last for quite a long time, which is a challenge for the whole industry. It is not so easy for listed companies to set up funds for follow-up financing.
Liu Di said, big capital is very careful now, and small capital and emerging capital do not have enough strength to do a lot of M & a. In response to the above questions, the times weekly reporter called Shanghai film and Hengdian film and television successively. The other side said that it was inconvenient to be interviewed. The phone number of the directors office of Jinyi film and television has been in an unanswered state. Whether there will be a wave of M & A remains a variable, but it is certain that Chinese films need to be upgraded from quantity to quality. Che Jingxing said frankly that in the creation level of Chinese films, there is a lack of plateau peak, there is a lack of quantity and quality.. Its a great project to move from a movie country to a movie country. Needless to say, the most potential film market is certainly China, but the premise is that the level of creation must be raised. Indication of vehicle path. Source: time weekly editor: Wang Xiaowu NF
Liu Di said, big capital is very careful now, and small capital and emerging capital do not have enough strength to do a lot of M & a.
In response to the above questions, the times weekly reporter called Shanghai film and Hengdian film and television successively. The other side said that it was inconvenient to be interviewed. The phone number of the directors office of Jinyi film and television has been in an unanswered state.
Che Jingxing said frankly that in the creation level of Chinese films, there is a lack of plateau peak, there is a lack of quantity and quality..
Its a great project to move from a movie country to a movie country. Needless to say, the most potential film market is certainly China, but the premise is that the level of creation must be raised. Indication of vehicle path.