The Zhitong Finance App learned that Cinda Securities released a research report saying that as of December 31, 2023, the total national movie box office (including service fees) was 54.922 billion yuan as of December 31, 2023, an increase of 83.4% over the previous year. The degree of recovery of box office in the 19/20/21/22 movie market was 85.6%/270.4%/116.8%/183.4%, respectively. Furthermore, the box office reached a record high on New Year's Day in '24, laying a good foundation for movie box office growth in the whole of '24. As of January 3, the corresponding valuation of the film and television sector in 24 years was 26.4x. The bank believes that AI+ film and television tools continue to iterate and innovate, and the new volume of short dramas is expected to open up room for growth for film and television companies.

Cinda Securities's views are as follows:

Demand for offline movie viewing is gradually recovering, and high-quality movie content will drive a year-on-year increase of 80% + in movie box office for the full year of 2023.

According to data from Cat's Eye Professional Edition, as of December 31, 2023, the total box office of national movies (including service fees) for the whole year was 54.922 billion yuan, an increase of 83.4% over the previous year. The recovery trend in the film market is quite obvious. The Spring Festival program performed steadily (“Man Jianghong”, “Wandering Earth 2”, etc.), and the summer program reached record highs (“The Girl Who Disappeared”, “Fongshen Part 1”, etc.). The box office for the New Year's Day season reached a record high in '24. The extent of box office recovery in '23 compared to 19/20/21/22 was 85.6%/270.4%/116.8%/183.4%, respectively.

The 23rd Lunar New Year program performed well. The box office for the New Year's Day program reached a record high, and the film market was growing well.

The box office for the 19/21/22 Lunar New Year program was $44.32/30.68/1,642 billion yuan respectively, accounting for a small share of the whole year. The box office during the 2023 Lunar New Year period reached 4.503 billion yuan, a new high in recent years. The supply of content is sufficient. More than 70 new films have been released, and the number has reached a record high in the past five years. As of January 1, 2024, the New Year's Day schedule achieved box office of 1,533 billion yuan. In recent years, the box office for the New Year's Day schedule fluctuated around 1 billion yuan except 2020. The box office for the New Year's Day movie market reached a record high in '24, laying a good foundation for the growth of movie box office in 24.

Judging from the Spring Festival schedule of the film market in previous years, maintaining the top two box office grosses above 2 billion yuan during the schedule can drive steady growth in the Spring Festival box office. The Spring Festival festival of 24-year movies is worth looking forward to.

Looking ahead to 2024, there are currently two movies scheduled for the Spring Festival in '24: “Mr. Red Carpet” starring Andy Lau, and the classic New Year's Eve animated big IP film “The Bear Incurs: Reversing Time and Space”. Other films that are expected to be screened during the Spring Festival in '24 include “Article 20” (Zhang Yimou, Lei Jiayin, Light Film), “Flying Fast Life 2” (Han Han, Shanghai Tingdong Pictures, etc.), “Hot and Hot Hot” (Jia Ling, Zhang Xiaofei, Xinli Media), and “Dunhuang Heroes” (Zhang Yu, Baina Qiancheng, etc.). Related producers are expected to benefit.

AI+ films are expected to follow the iterative innovation of technology, and AI will empower the entire film industry chain.

Musk sparked discussions on AI+ film and television topics, and Midjourney+Pika produced excellent video editing results. Industrial chain links such as script creation, image and video content generation, visual effects generation, post-editing production, and optimized market operation can all use AI to assist production, which is expected to greatly improve the production efficiency of creators in the film and television industry.

Investment proposal: As of January 3, the corresponding valuation of the film and television sector in 24 is 26.4x. AI+ film and television tools continue to iterate and innovate, and the new volume of short dramas is expected to open up room for growth for film and television companies.

Film suggestions: Light Media (300251.SZ), the leading producer of film and television content, Light Media (300251.SZ) (“Nacha's Demon Boy in the Sea” can be expected in '24) and other Spring Festival-related Baina Qiancheng (300291.SZ), Reading Group (00772) (Xinli Media), other leading movie content leader Wanda Film (002739.SZ) (New Year's Day “Three Teams”), Bona Pictures (001330.SZ), and the leading cinema Shanghai Film (601595.SH) (Group supports IP +) (TV series “Blossoming Flowers” hit) Hong Kong stocks: Maoyan Entertainment (01896) (leading online ticketing), IMAXCHINA (01970), Alibaba Pictures (01060), etc.

Risk factors: Spring Festival screening time delayed, Spring Festival box office falls short of expectations, macroeconomic risks