Hengdian Film and Television (603103): Low-tier cities quickly penetrate non-ticket business traffic and realize-Lei Tao

The small-scale direct-operated theaters quickly penetrated low-tier cities, and the fare and operating efficiency doubled and buffered the single-screen layout: M & A, while the company focused on the second-tier cities, the company laid out prospective layouts in third-tier, fourth-tier, and fifth-tier cities.Directly-operated theaters and low fares are the entry points, which cater to the consumption needs of low-tier cities, thereby achieving the purpose of quickly penetrating the market and increasing the city’s share.

Among them, the number of moviegoers and box office growth in third, fourth, and fifth tier cities continued to exceed those in first and second tier cities. The company’s strategy of “enclosing cities in rural areas” is expected to continue to benefit from sinking channels.

At present, due to the simultaneous impact of the rapid expansion of screens across the country, the company’s single-seat penetration and single-screen alignment still show a certain downward trend, but the rise of industry fluctuations and the company’s high level of operating efficiency,Its higher speed is significantly narrowed.

We think that with the initial in-place construction of national screens, the projection business is embracing marginal improvement and is expected to usher in an inflection point around 2020.

Movie viewing traffic and the scale of advertising resources have both increased, and service and bargaining power have contributed to the unit price of theater advertisements: The number and unit price of advertising resources are the main factors that determine the overall advertising cooperation.

Expansion, the company is still expanding local theaters at the conventional high-level growth rate, and will simultaneously increase the combined viewing traffic and the scale of advertising resources; instead, advertisers ‘expectations for advertising in the theater scene are stronger than other traditional offline scenes.In the context of the overall prosperity of the medium industry, the cost of cinema advertising is still at a high level of growth, which means that the unit price of cinema advertising can always increase space.

At the same time, in the future, the operation rights of the patch advertising are expected to gradually return to the theater, and the market share of independent investment in the theater will be increasing.

We believe that through the company’s development of more new advertising positions and new channels to provide customers with more dimensions and more three-dimensional 重庆耍耍网 advertising solutions, its service capabilities to advertisers and bargaining power will be significantly enhanced, and advertising business will continue to improveCompany profitability.

Relying on the huge traffic of the theater, deeply digging consumer demand and increasing ARPU: Reorganization, under the adverse impact of the continuous increase in the proportion of online ticket purchases and the reduction of consumer lobby dwell time, the company continues to develop products and theaters that are suitable for theater sales and meet consumer demandService, actively promote the “4 + 1” strategy, increase customer stickiness and increase ARPU; reorganization, the company through the unified planning for the sale of goods, carry out national business cooperation, greatly reduce procurement costs.

We believe that relying on the huge volume of cinema sales business will continue to support the company’s performance.

Investment suggestion: For the first time, assign a “Neutral” rating.

Based on the company’s assumption that the theater is the traffic entrance, non-ticketing is the main profit channel, and it continues to grow, we expect the company’s 2019-2021 revenue to be 29.

60, 32.

37 and 35.

7.8 billion, with a net profit of 3.

62, 4.

13 and 4.

92 trillion, corresponding to EPS.

57, 0.

65 and 0.

78 yuan.

The current sustainable corresponding 2019-2021 market surplus has increased again by 28 times, 24 times and 20 times.

Considering that the comparable company’s estimated average value is 22 times, the company’s historical estimated median value is about 35 times, and the company’s senior management’s ROE level, we believe that the company’s reasonable interval range is 25-30 times the corresponding price-earnings ratio in 2019, and the target price range is 14.


10 yuan, currently expected to be in the target price range, the first coverage given a “neutral” rating.

Risk warning: box office performance is less than expected risk, market competition intensifies risks, and macroeconomic downside risks.