The Zhitong Finance App learned that Galaxy Securities released a research report saying that judging from the performance of the 2024 New Year's Day program, changes in audience groups and movie consumption habits have put forward new requirements for the movie market, and emotional marketing, ceremonial marketing, and fan effects have provided new opportunities for box office growth. The recovery trend of the film industry remains unchanged in 2024, and there is still room for continued recovery and growth in the film market. It is recommended to focus on optical media (300251.SZ), which has sufficient reserves and high-quality content to be screened; Wanda Film (002739.SZ), which benefits from a recovery in demand; the business covers the entire film production, distribution and broadcasting industry chain while benefiting from the restoration of imported film supply (600977.SH); online ticketing services benefit from market recovery, such as Cat Eye Entertainment (01896), which has outstanding film production and promotion capabilities.

Incidents:

The 2024 New Year's Day program (December 30, 2023 to January 1, 2024) ended. According to data from Lighthouse Professional Edition, the total box office of the 2024 New Year's Day program (including service fees) reached 1,533 billion yuan, setting a new New Year's Day box office record in Chinese film history.

▍ The main views of Galaxy Securities are as follows:

The box office for the New Year's Day program set a record, and the overall performance was outstanding.

According to statistics from Lighthouse Professional Edition, the total box office of the 2024 New Year's Day program was 1,533 billion yuan, up 176.22% year on year, surpassing the box office record of 1,303 billion yuan in the 2021 New Year's Day program; the total number of shows was 1,417,500, breaking the New Year's Day record in Chinese film history; the number of viewers was about 36.6 million, an increase of 189.74% over the previous year. The activity of the film market increased significantly. From a regional perspective, second-tier cities are still the main contributor to the box office, accounting for about 45% of the box office, and the third- and fourth-tier accounts for about 40%, continuing the downward trend in the market.

The quantity and quality of the film has soared, and multiple factors have created the strongest New Year's Day program.

The box office performance of the New Year's Day program was good. The main reasons were: 1) The 2024 New Year's Day holiday was 39 days apart, and the Spring Festival program had a weak crowding effect on the New Year's Day program; 2) A total of 13 films were screened from December 29-31. The film had diverse themes, covering love, comedy, drama, fantasy, crime, animation, song and dance, etc., which can meet the needs of various moviegoers;

3) The headline film promoted innovation, with remarkable results. “One Twinkle, One Twinkle, and Star” raised attention in the early stages through “Snow Resort” marketing, with remarkable results; 4) The overall reputation of the 2024 New Year's Day movies was better than in the same period in the past. According to the Cat's Eye Rating, the top 3 New Year's Day box office ratings were 9.2, 9.6, and 9.3, compared with the average ratings of 8.9, 8.5, and 8.5 for the top three New Year's Day movies in 2021-2023.

New Year's Eve was very popular, and ceremonial marketing broke the circle.

According to data from Lighthouse Pro, the box office for shows after 10 p.m. on December 31, 2023 was close to 150 million yuan. About 3 million viewers chose to celebrate New Year's Eve in cinemas. The New Year's Eve box office performance made an important contribution to the New Year's Day box office breakthrough. As the audience becomes younger, ceremonial marketing for movies is an important reason for the popularity of the New Year's Day box office this year. For example, “Twinkle Twinkle Twinkle Twinkle Twinkle Star” and commemorative films such as “Taylor Swift: Time Tour”, which themselves have a strong sense of ceremony or strong fan attributes, attracted a large number of viewers, and the marketing effect was remarkable.

The industry continues to recover, and attention is being paid to the Spring Festival film schedule.

According to Lighthouse Pro, the box office for the full year of 2023 was 54.937 billion yuan (including service fees), an increase of 83.44% over the previous year, returning to 85.64% of the box office for the full year of 2019 before the pandemic. Among the top films, 11 were over 1 billion, compared to 15 and 7 in 2019 and 2022, respectively. In terms of the 2024 Spring Festival program: Currently, films such as “The Bear Came: Reversing Time and Space” and “Mr. Red Carpet” have been scheduled for the Spring Festival. In the future, we will continue to pay attention to the schedule and pre-sale of other films such as “Life at Speed 2” and “The Legend”.

Risk warning

The risk of increased market competition, the risk of stricter policy regulations, the risk of film content quality and box office falling short of expectations, the risk that demand for watching movies falls short of expectations, etc.