Wanda Movies (002739): Acquisition of Wanda Films makes significant progress through the full-entertainment content industry chain layout

Wanda Movies (002739): Acquisition of Wanda Films makes significant progress through the full-entertainment content industry chain layout

Investment highlights: 2018 revenue growth in ten years6.

6%, net profit attributable to mothers is reduced by 14.
.

7%, basically in line with expectations.

The company disclosed the results report for 2018 and initially realized revenue of 141.

0 million yuan, an increase of 6 in ten years.

6%; net profit attributable to mother 12.

9.3 billion, a decrease 西安耍耍网 of 14 a year.

72%.

The company’s 2018 performance is basically in line with market expectations. The reason for the decrease in net profit is that (1) the number of new cinemas in the cinema industry exceeds the box office growth rate, and the newly opened cinemas have less than mature theaters, resulting in a decrease in single screen area and affecting the projection businessGross profit margin; (2) The sales growth rate of high-margin business such as sales and advertising shifted. We judge that the growth rate of non-ticket business revenue shifted below 20%, which was 35% to 45% in 2017.

The review of the acquisition of Wanda’s film and television assets was passed conditionally, and the entire entertainment content industry chain was advanced.

On February 27, after being reviewed by the M & A and Reorganization Review Committee of the China Securities Regulatory Commission, the company issued shares to purchase Wanda’s movie assets and obtained conditional approval.

The main business of Wanda Film and Television includes investment, production, distribution of film and TV series, and distribution and operation of online games.

Wanda Television 96.

83% equity transaction was priced at 106.

5 trillion, all of which are traded by issuing shares, and the net profit attributable to the mother for the performance of 2018-2021 is 7, respectively.

6.3 billion / 8.

8.8 billion / 10.

6.9 billion / 12.

7.4 billion.

After the completion of the transaction, the company’s main business will cover the entire industry chain of entertainment content such as film and television investment, production, distribution, screening, integrated marketing, video game linkage, derivatives, and real-world entertainment to enhance profitability.

Wanda Film’s follow-up projects have abundant reserves and serve as a catalyst for subsequent continuous performance.

In 2018, Wanda Film and TV produced 15 films, and the cumulative box office accounted for the total distribution of the country’s total box office in that year. There were about 47 films reserved in 2019-2021. Among them, the key works in 2019 include the well-known IP adaptation of the “Star Book of Ghost Blowing Lamps”, and subsequent key worksIncluding “Chinatown Detective 3”, award-winning novel adaptation “Folding City”, the popularity of the IP series “Long Xun Jue 2” and so on.

In the field of TV dramas, the subsidiary new media Eslite will launch “The Parade Soldiers” and “Surge” and other real-life themes that meet market demand.

The performance of the projection business was solid.

The company achieved a total of 95 box office in 2018.

US $ 600 million, of which China’s domestic box office is approximately US $ 7.9 billion to US $ 8 billion, which is basically the same as the overall domestic box office growth, and its market share has remained basically stable.

In the future, the company plans to add about 700 new screens every year.

We believe that the company ‘s movie theaters have a good movie viewing experience, benefiting from the increase in the number of units and the increase in unit cost caused by the increase in scale, which will help reduce the adverse impact of the single screen change on the industry.

Maintain profit forecast and “overweight” rating.

As the acquisition of the company has not been completed, we do not adjust the profit forecast for the time being, and maintain the company’s net profit attributable to the mother for 2018-202013.

100 million / 13.

100 million / 13.

9 trillion predictions, the corresponding EPS is 0.

74/0.

74/0.

79 yuan / share, corresponding to the current maximum PE is 32/32/30 times.

Significant progress has 夜来香体验网 been made in the layout of the company’s film and television entertainment content. Recently, senior executives such as the company’s president, executive president, and secretary of the board increased their shares with their own funds to achieve confidence in subsequent development.
Maintain the “overweight” rating.

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