FAST NEWS: Maoyan profit doubles on strong movie box office

The latest: Maoyan Entertainment (1896.HK), China’s main online movie ticketing platform, issued a positive profit alert Thursday, forecasting its net profit for the first half of the year would range between 380 million yuan ($53 million) and 430 million yuan, up 150.2% to 183.1% from 152 million yuan in the same period last year.

Looking up: The entertainment industry of China fully recovered amidst the revival of domestic consumption and strong support from official policies. Benefiting from the increase in movie box office in the first half of the year, the company’s revenue increased by 80.5% to 88.9% to reach between 2.15 billion yuan and 2.25 billion yuan

Take Note: As a result of the repeated outbreaks of the Covid epidemic in many cities of China between March and May last year, with major cities such as Shanghai facing prolonged lockdown, the revenue base of Maoyan was relatively low, creating a significant increase in revenue in the first half of this year.

Digging Deeper: The film industry was affected by the closure of entertainment venues in many Chinese cities since the outbreak of the Covid-19 virus in 2020, in order to diversify its business and diversify its risk profile, Maoyan has gradually shifted its focus in recent years to promoting its entertainment content business, such as participating in the production, distribution and promotion of movies, in order to diversify its business and risk. Last year, its revenue from entertainment content services amounted to 1.11 billion yuan, accounting for 48% of its overall revenue, which was higher than the 46% of its online entertainment ticketing services, reflecting that the strategy has begun to bear fruit.

Market Reaction: Maoyan shares jumped on Friday, closing up 17.3% to HK$10.18 at the midday break. It now trades at the upper end of its 52-week range.

Translation by A. Au

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