The Zhitong Finance App learned that Dongwu Securities released a research report saying that it is optimistic that the supply of high-quality content will increase, demand for movie viewing will continue, and the industry is expected to continue the strong recovery trend. At the same time, it is concerned about iterative breakthroughs in multi-modal models such as Sora in 2024, which is expected to bring about changes in the film and television industry. Demand was released after the industry's content supply recovered in 2023. The number of movies screened throughout the year reached 618, down from 677 in 2021, corresponding to the annual box office of 54.952 billion yuan, which has recovered to 86% of the 2019 box office. In 2024, the content side continued the trend of high-quality supply. The box office of New Year's Day and Spring Festival movies all exceeded market expectations, breaking film history records, and looking forward to the future. We are still optimistic about the strong release of market demand after the restoration of high-quality content supply, which will drive the industry to recover further.

The views of Soochow Securities are as follows:

The longest Spring Festival box office ended at 8.51 billion yuan, setting a new record in film history.

The 2024 Spring Festival program is from the first to the eighth day of the first year (February 10 to February 17), with a total of 8 days. It is 1 day longer than the previous New Year's Eve to the first six of the first year, making it the longest Spring Festival schedule in film history. According to Cat's Eye Pro, the total box office of the 2024 Spring Festival program ended at 8.51 billion yuan, surpassing the 2021 Spring Festival program of 7.842 billion yuan, setting a new Spring Festival box office record in Chinese film history. If you compare the 7-day schedule, the total box office for the 2024 “Spring Festival Program” (that is, the first to seventh day of the first year, February 10 to February 16) was 7.337 billion yuan, only lower than in 2021, and changes of +24%, -6%, +21%, and 8% from 2019 and 2021-2023, and the box office performance is still impressive.

Average ticket prices have declined, the number of moviegoers has increased significantly, and the trend of a recovery in demand for movie viewing has been further established.

The 2024 Spring Festival program showed strong performance. We believe the main reason is the strong release of demand for movie viewing, driven by declining ticket prices, an increase in the number of shows, and the supply of high-quality content. Let's compare the 7-day schedule described above. According to the Cat's Eye Pro Edition, the 2024 “Spring Festival Program”: 1) The average ticket price was 49.3 yuan, changing +11%, +1%, -6%, and -6% from 2019 and 2021-2023, and the average ticket price declined for 2 consecutive years; 2) The number of screenings reached 3.471 million, with changes of +19%, +21%, +10%, and +31%. The increase from 2023 is mainly due to the decline in the average running time of a single film in 2024 (2023 top video “” “Wandering Earth 2” is 173 minutes, “Man Jiang Hong” (159 minutes), the number of screenings in a single day increased; 3) The number of movie viewers reached 148 million, changing +12%, -8%, +30%, and +16% from 2019 and 2021-2023. If you look at the 8-day schedule from the first to the first eight, the number of movie viewers reached 163 million, surpassing 160 million in 2021. It also set a new record for the Spring Festival in Chinese film history, and demand for watching movies continued to recover strongly.

There was a high concentration of box office leaders, and the “two super, two top” pattern was obvious, and 4 films were withdrawn.

According to Cat's Eye Pro Edition, the top 4 grossing films of the 2024 Spring Festival program (first to eighth, 8 days) were “Hot and Hot” at 2,724 billion yuan, “Speeding Life 2” at 2.04 billion yuan, “When Bears Go: Reversing Time and Space” at 1,392 billion yuan, and “Article 20” accounts for 98% of the box office. The top 4 movies account for 98% of the box office, highlighting the “Top 2” pattern. Against the backdrop of obvious head effects and intense competition for schedules, the four films “Let's Shake the Sun”, “Mr. Red Carpet”, “Huang Wei: God of Fortune Falling from Heaven”, and “The Eight Precepts of Heaven” were officially announced to be removed/changed in order to gain better box office through a shift of gears and a second round of publicity.

Investment advice:

It is recommended to focus on leading theaters and ticketing companies: Wanda Film (002739.SZ), Hengdian Film and Television (603103.SH), Happy Blue Ocean (300528.SZ), Alibaba Pictures (01060), etc.;

Content producers and distributors recommend Light Media (300251.SZ) (Spring Festival “Article 20”, with “Nacha no Demon Boy in the Sea”, etc.), Bona Pictures (001330.SZ) (Spring Festival “Speeding Life 2”). It is recommended to follow Reading Group (00772) (Spring Festival “Hot and Hot”), Shanghai Film (601595.SH), Chinese Film (600977.SH), etc.

Risk warning: Competition in the industry intensifies, box office falls short of expectations, and macroeconomic downside risks.