China Film (600977) 2019 Third Quarterly Report Review: 3Q19 deduction of non-attributed net profit growth of 24% in line with expectations

China Film (600977) 2019 Third Quarterly Report Review: 3Q19 deduction of non-attributed net profit growth of 24% in line with expectations

In 3Q19, the net profit of non-returned mothers increased by 24%, in line with expectations.

The first three quarters of Chinese film revenue 67.

300 million yuan, a decrease of 2 each year.

8%; Net profit 8.

700 million, a decrease of 32 every year.

7%, mostly due to the increase in holdings in the same period last year, China Film included 4.
.

50,000 yuan investment income (belonging to non-recurring gains and losses); 3Q19 single quarter deduction of non-attribution net profit1.

US $ 9.7 billion, an annual growth of 24%, in line with expectations.

  The proportion of box office films released in the third quarter of 19 decreased compared with the first half of the year.

3Q19 led or participated in the distribution of 123 domestic films and 21 box office.

2%, accounting for 18% of the box office area of domestic films.

1%; issued 42 imported films and accumulated a box office of 15.

5 trillion, accounting for 54 of the box office area of imported films nationwide.

6%, compared with the first half of the year.

  The 3Q projection business is affected by the market breakthrough, and 4Q is expected to usher in growth.

According to Cat’s Eye, China Film Investment, a film investment company owned by 3Q19, achieved box office 3.

600 million US dollars, an average of 11% in ten years, 北京夜生活网 9M19 achieved 10 box office.

$ 800 million, an average of 13% over a ten-year period.

We expect that due to the low base of the box office in the fourth quarter of last year (11.8 billion), driven by the National Day files and “Youth of Youth” this year, the box office is likely to achieve higher growth in the fourth quarter, and the box office growth is expected to reach a middleDigits.

As of October 29, the box office in October was close to 8 billion yuan.

We believe that the Chinese movie screening business will also see positive growth in the fourth quarter.

  Production pipeline is rich.

9M19 has a total of 15 films leading or participating in production and put on the market, gradually achieving a box office of 60.

400 million U.S. dollars, accounting for 22 of the domestic box office area of domestic films.
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2%, of which the main contributor is “Wandering Earth” in the first half.

The company’s upcoming films include “Chinese Women’s Volleyball Team” and “Detective Chinatown 3”, etc. It is recommended to pay attention.

  Investment suggestion: Considering the reduction of the company’s investment income, we lower the company’s net profit for 2019-2021 to 1.2 billion, 14 billion, and 1.6 billion, corresponding to a growth rate of -20%, 17%, and 16%.

Considering that the box office is expected to improve in the fourth quarter and the company’s production pipeline is rich, we maintain a “Buy” rating on the company.

  Risk Tips: Industrial Policy Risks, Variations in Upstream Film Production, Box Office Restructuring