Since 2023, domestic films have shown vigorous vitality.

According to data from the National Film Administration, the total box office of national films reached 54.915 billion yuan in 2023, an increase of 82.64% over the previous year; the box office of Chinese films was 46.05 billion yuan, accounting for 83.77%. Entering 2024, the New Year's Day and Spring Festival box office hits new highs in film history, and domestic films are in full bloom.

In this context, local film and television companies with quality films have also ushered in impressive performance releases and reshaped the logic of long-term development. Huaxi Media (01003.HK) is a good observation sample.

Revenue and profits soared, and the two films received nearly 10% of the country's total box office

Let's look at performance first. In 2023, Huanxi Media achieved revenue of HK$1,333 million, a sharp increase of 97 times; profit before tax was HK$212 million, compared to a net loss of HK$222 million in the previous year, which significantly reversed losses. Its actual profitability is even stronger. Due to a decrease in movie and TV series revenue and expected revenue in the first quarter of 2024, it reduced HK$106 million in the 2023 reporting period, offsetting part of the profit.

Behind this, Huanxi Media received over 5 billion dollars in box office with only two films, “Man Jianghong” and “School Dad,” accounting for nearly 10% of the total box office of national films in 2023.

Among them, the film “Man Jianghong”, produced by Huaxi Media and directed by shareholder director Zhang Yimou, won the annual box office title, with a total gross of over 4.5 billion yuan, bringing strong performance flexibility. “School Dad” is a work planned to help Huang Bo's new director of “HB+U”, and eventually grossed 614 million dollars at the box office.

In addition to the data itself, this performance and box office performance also reflect Huaxi Media's outstanding market competitiveness.

Looking at the overall market, there are many reasons behind the booming development of domestic films in 2023, including increased cultural confidence, improved production technology, diverse themes, and continuous innovation. It can be said that it was a very “exciting” year. It was not easy for the two films produced by Huaxi Media to achieve outstanding performance, and the quality content ability was tested by the market once again.

Still using “Man Jiang Hong” as an example, the film shows a higher degree of compatibility with the Spring Festival program. Through comedy and suspense, it perfectly captures the unique feelings of the Chinese people for their homeland, enhances the viewability of the film, and captures the movie-watching needs of young people.

At the same time, in the booming development of domestic films, Huanxi Media's unique “director partnership system” advantage will have a better chance of turning into a market advantage.

Currently, Huanxi Media has 7 shareholder directors, including Ning Hao, Wang Jiawei, Xu Zheng, Chen Kexin, and Zhang Yimou, and many contracted directors, which provide a strong guarantee for the stable output of quality content, superimpose a famous director effect, and the production of films is very attractive.

Blockbuster movies such as “Sauce Garden Alley” are about to be released, further showing the flexibility of performance

In 2023, Huanxi Media will also continue to work with leading Chinese directors to develop and produce a number of movies, forming a premium content reserve and layout for the next 1-2 years. Its performance potential is expected to continue to be unleashed with the release of related films, increasing the certainty of growth.

Specific film themes include “Sauce Garden Alone” directed by Chen Kexin and starring Zhang Ziyi and Lei Jiayin; the film “The Stage” written and directed by Chen Pei; “On the Stage Alone” directed by Chen Kexin and starring Hu Ge, Vincent Cassel, and Hao Lei; “Hedgehog” directed by Gu Changwei and starring Ge You and Wang Junkai; “In the Name of Father” (formerly “Fearless”) directed by Chen Daming and starring Zhang Hanyu; and written by Zhang Guoli, and played by Zhou Guoli “Morning Clouds, Twilight Rain” starring Dong Yu; “Safe Evacuation from the 21st Century” directed by Li Yang and starring Zhang Ruoyun and Chung Chu-xi; Wu Xiaoliang , “Up the Mountain” starring Tu Men, etc., provided the audience with more choices.

Among them, the crime-themed film “Sauce Garden Alley” was adapted from one of the Four Strangest Cases in the Republic of China. It has attracted market attention since the project was established, and it went on sale in March of this year. Industry insiders have revealed that it is expected to make a big debut in the second half of this year, and it may be screened during the summer season.

“On the Field Alone” is based on the autobiography of tennis player Li Na and tells the story of Li Na's life from her teenage years and her time as an athlete to her retirement. It is reported that the film will soon be released.

Furthermore, following the huge success of the film “Man Jiang Hong”, Huanxi Media plans to collaborate again with director Zhang Yimou to produce another work with both artistic value and commercial value. Huanxi Media is also participating in investing in the fantasy love story “The Mermaid” directed by Cheng Er and starring Wang Yibo and Wang Chuanjun. The film is expected to be released in 2024.

From this perspective, Huanxi Media is expected to produce a number of quality films in 2024, concentrating on unleashing performance flexibility. “Sauce Garden Alley” also has the potential to become a phenomenal hit. Perhaps it is expected to “copy” “Man Jiang Hong”, bring it high box office and high reputation, empower brands and performance improvements, and further open up imagination in the capital market, and deserve continued attention.