The industry picked up performance "overturned", Bona Film turned a loss of 400 million yuan and encountered a "crisis in the prime of life"

Bona Film, which has launched films such as "Operation Red Sea", "Captain China" and "Changjin Lake", "overturned" in the face of a strong recovery in the industry. On August 31, Bona Film handed over its first semi-annual report after listing. During the reporting period, the company achieved an operating income of 850 million yuan, a year-on-year decrease of 42.31%; The net profit turned from positive to negative, with a loss of 441 million yuan.

The Southern Metropolis Daily reporter noted that since the end of 2014, many excellent films in the three series of "Mountains, Rivers and Seas", "China Pride" and "China Victory" have greatly increased the performance of Bona Film. But with the release of "Nameless", the three major works of the series are basically over. Up to now, the company has not launched a series of film projects of the same volume to take over.

At the same time, Bona Film actively tests the waters of comedy, science fiction, youth inspirational and other genre films. Unfortunately, the box office reputation of "Don't Call Me "God of Gamblers" launched this year has collapsed, and the release time of "Boyhood" has bounced tickets, and related films have not yet provoked revenue.

In addition, as of the first half of 2023, Bona Film, which replenished 1.382 billion yuan in IPOs last year, had a total major debt of 4.272 billion yuan, an increase of 518 million yuan from the beginning of the year, while the book currency funds decreased by 661 million yuan to 2.205 billion yuan, and the capital chain once again showed a tight trend.

At the Shanghai International Film Festival in June, Yu Dong, chairman of Bona Film, announced 20 films and 5 dramas in one breath, and said that 4 billion yuan would be prepared for this purpose. I said with 3 billion dollars, in fact I have to reserve 4 billion. For Yu Dong, chairman and general manager of Bona Film Group, and his Bona Film, a new "big gamble" kicked off.

The industry is hot, Bona "lost its voice"

Three years after the pandemic, the film industry has ushered in a long-lost carnival.

Maoyan data shows that in the first half of this year, the total box office of domestic films reached 26.271 billion yuan, a year-on-year increase of 52.91%, and 243 new films were released in theaters nationwide, a year-on-year increase of 50.9%. Among them, this summer, the total domestic box office reached 20.619 billion yuan, and the number of moviegoers reached 505 million, both breaking historical records.

Thanks to the overall recovery of the industry, a number of film and television listed companies achieved good results in the first half of the year. Among them, Chinese films (600977. SH) half-year revenue of 2.857 billion yuan, a year-on-year increase of 87.95%; Non-net profit changed to $323 million from -49 million yuan in the same period last year. Wanda Films (002739. SZ) revenue reached 6.869 billion yuan, a year-on-year increase of 39.1%, and the non-net profit turned around to a profit of 415 million yuan. Hengdian Film and Television (603103. SH) revenue increased by 40.69% to 1.171 billion yuan, and non-net profit was 74 million yuan, successfully turning around losses. In addition, the blue ocean of happiness (300528. SZ), Jinyi Film and Television (002905. SZ) and other companies are still not profitable, but their losses have narrowed significantly.

However, Bona Film, as a veteran film and television company in China, achieved operating income of 849 million yuan in the first half of 2023, a year-on-year decrease of 42.31%; Non-net profit turned from a profit of $152 million to a loss of $441 million, and net cash flow from operating activities also changed from an inflow of $1,254 million to an outflow of $120 million.

Analyze according to specific business. During the reporting period, Bona Film released a total of 4 films, including "Nameless", "Don't Call Me "God of Gamblers", which were the main controller, and "When the Wind Rises Again" and "The King of the Long Sky".

According to Yu Dong's self-report and comprehensive analysis of Bona Film's "Prospectus", 2022 annual report and other data, the cost of "Nameless" is about 250 million yuan to 300 million yuan, and the final box office of the film is 931 million yuan, which seems to be good. But do not consider sequels such as "Operation Red Sea 2", as the finale of "China Victory Trilogy", one of Bona Film's three major fist projects, the box office is not only far lower than "Shuimen Bridge of Changjin Lake" in the same period last year, but also not excellent in the three major series. In addition to "Decisive Moment", it is only slightly higher than the box office of 883 million yuan of "Outsmart Tiger Mountain" released in 2014.

Released on June 21, "Don't Call Me "God of Gamblers", which has more influence on the third quarterly report, with the blessing of multiple halos such as the "God of Gamblers" IP, the protagonist of Zhou Yunfa, and the similar title of "I am not the God of Medicine", the final box office was fixed at 40.782 million yuan, and the Douban score was only 4.9 points, encountering Waterloo.

As for "When the Wind Rises Again" and "The King of the Long Sky", the former starring Kwok Fucheng, Tony Leung and Du Juan, the final box office is 49.043 million yuan, there is a possibility of loss; the latter has a box office of 850 million yuan, which is decent.

Overall, Bona Film's operating costs increased by 7.28% year-on-year in the first half of the year when its revenue was almost halved, resulting in a sharp drop in gross profit margin of 39.81%. Among them, the revenue of the film business reached 313 million yuan, down 76.48% year-on-year, which became the main reason for dragging down the company's revenue. In addition, the operating income of the company's cinema business increased by 74.64% year-on-year to 600 million yuan, successfully sharing the industry dividend, but failed to change the overall decline in revenue.

Abandoning the focus on the "main theme", diversification has not yielded results

The predecessor of Bona Film can be traced back to Beijing Bona Cultural Exchange Co., Ltd., established in 1999, which is also the first private film distribution company in mainland China. In 2003, the company obtained the "film production license" and officially entered the field of film production.

Bona Film's fame in the film and television industry is due to its exploration and breakthrough on the road of commercialization of the main theme film.

In 2009, the company participated in two main theme films with different styles in the form of joint production, "The Great Cause of Founding the People's Republic" and "October Siege", and initially tested the waters. In 2014, Bona Film launched the main theme film "Outsmart the Tiger Mountain" adapted from the "Red Model Play", which not only won 883 million yuan at the box office, entering the top ten domestic films at that time, but also set off a wave of heated discussions that "the main theme movie can also be applauded and applauded". To this day, the score of "Outsmart Tiger Mountain" on Douban still reaches 7.7 points.

From today's perspective, as the pioneering work of the "Mountains, Rivers and Seas Trilogy" series, "Outsmart the Tiger Mountain" is only the starting point of Bona Film's career. The last two works in the series, "Operation Mekong" and "Operation Red Sea", grossed 1.186 billion yuan and 3.652 billion yuan respectively. In 2019, the company successively launched "Decisive Moment", "Captain China" and "Heroes of Fire" to form the "China Pride Trilogy" series, with the final box office of 124 million yuan, 2.913 billion yuan and 1.706 billion yuan respectively.

The "China Victory Trilogy", which was then taken over, established the status of Bona Film as a commercial giant of melody films. Among them, the box office of "Chinese Doctor" was 1.328 billion yuan, while the box office of the first part of "Changjin Lake" reached 5.775 billion yuan, surpassing the previous phenomenal film "Wolf Warrior 2" and successfully topped the domestic film box office list. The sequel "Shuimen Bridge of Changjin Lake" also has a high box office of 4.067 billion yuan, ranking ninth in the box office list.

The success of the three series of "Mountains, Rivers and Seas", "China Pride" and "China Victory" has boosted the performance of Bona Film. From 2018 to 2021, the company's operating income was 2.784 billion yuan, 3.136 billion yuan, 1.61 billion yuan and 3.124 billion yuan respectively; The net profit was 156 million yuan, 176 million yuan, 126 million yuan and 300 million yuan respectively.

Under the background of good performance, Bona Film, which was privatized from NASDAQ in 2016 and prepared to return to A-shares, finally officially listed on the main board of the Shenzhen Stock Exchange in August 2022. However, for the whole year of 2022, Bona Film achieved revenue of 2.012 billion yuan, and non-net profit was -193 million yuan, the loss was mainly due to the long closure time of its theaters, and various rigid expenses still need to be continuously invested.

After becoming a public company, investors will value future profitability more than the glory of the past. Previously, the relevant research report of Huaxin Securities analyzed the reasons why Bona Film's owner's melody film can continue to achieve high box office from three aspects, including "forming a commercial operation methodology for the main theme film", "sustainable iteration of serial IP", "binding important directors and actors, long-term in-depth cooperation to ensure the box office" and other factors.

However, the Nandu reporter noticed that Bona Film does not seem to continue to put most of its energy into the main theme track that it is good at, but has begun to increase its attempts to diversify film types.

After "Nameless", Bona Film did not clearly propose a new series of successor works, and only announced two independent sequels to "Operation Red Sea 2: Operation Killer Whale" and "Outsmart Tiger Mountain Prequel". At the same time, during the Shanghai Film Festival in June, Bona Film announced a list of 20 films and 5 dramas, including the youth-themed film "Boyhood", the police and bandit action film "Burst Point", the classic romance film "Dream of Red Mansions: Golden Jade Good Fortune", the fantasy action film "Legend", the fantasy comedy "Intern Eros", the inspirational comedy "Don't Call Me "God of Gamblers", etc., which can be described as different styles.

In the half-year report, Bona Film also stressed that in the case of lower box office films during the reporting period, which was lower than the same period last year, resulting in a decrease in film box office revenue, "the company will continue to actively try the innovative expression of films, and actively explore multiple types of films." ”

It is worth mentioning that at the press conference during the Shanghai Film Festival, "Don't Call Me "God of Gamblers"" starring Chow Yun-fat, Yuen Yongyi, Fang Zhongxin and producer Huang Bin, screenwriter Zhuang Wenqiang, director Pan Yaoming and others all appeared on stage, reflecting the company's importance to the film.

However, "Don't Call Me "God of Gamblers" did not become a hit after its release, considering that the cost of the film has reached at least 24.5634 million yuan at the end of 2021, and the loss is a high probability event. Coupled with the withdrawal of "Boyhood", Bona Film's road to film type diversification has yet to be broken.

In the absence of high-quality new works, the company's stock price has also fluctuated from a high of 15.23 yuan / share shortly after listing to about 8 yuan / share at present.

In addition, "diversification" is not only reflected in the film level, Bona Film semi-annual report also pointed out, "continue to deepen the film and cinema business, while actively expanding in drama and brand licensing and derivative development and other businesses to achieve diversified and stable operation." ”

It is worth mentioning that in the casting of film actors, Bona Film seems to be trying to "diversify". "Mountains, Rivers and Seas Series" is mostly starring Zhang Hanyu, Zhang Yi, Wu Jing and other old drama bones, or Peng Yuyan, Ou Hao, Huang Jingyu and other tough guy attributes, and "Changjin Lake", "Nameless" and "Boyhood" starring Yi Yangqianxi, Wang Yibo, Chen Feiyu and others have appeared one after another. In addition, Maoyan Professional Edition shows that Chen Feiyu will also star in "Operation Red Sea 2".

Yu Donghao gambled "4 billion", and the capital chain continued to come under pressure

When the Shanghai Film Festival announced the new film list this year, Yu Dong also said that "4 billion yuan must be prepared to ensure the completion of filming". However, funding is another challenge for Bona Film.

As of the end of the first half of 2023, Bona Film had monetary funds of only RMB2.205 billion, but had RMB1.226 billion in short-term borrowings and RMB1.803 billion in non-current liabilities due within one year. In addition, the company has long-term borrowings of 1.243 billion yuan.

In fact, thanks to the successful listing, Bona Film raised 1.382 billion yuan through an IPO last year. However, compared with the end of last year, in just half a year, its monetary funds decreased by 662 million yuan, and its main debt increased by 517 million yuan.

High borrowing means high financial costs. In the first half of this year, Bona Film's financial expenses increased by 14.49% year-on-year to 158 million yuan. This also has a greater erosion of the company's profits.

It is worth mentioning that with the continuous reduction of monetary funds, Bona Film's debt investment has shown an expansion trend. As of the end of 2019, 2022 and the first half of 2023, it was RMB1,811 million, RMB2.41 billion and RMB2,622 million respectively. According to the financial report, this asset is mainly "a time deposit certificate and interest deposited in the bank for internal and external loans with a term of more than one year".

In general, the interest rate on borrowing is higher than the interest rate on deposits. According to the financial report, in the first half of 2023, Bona Film's interest income was 45.2076 million yuan, far lower than the interest expense of 156 million yuan. Why do you have to borrow heavily and make large deposits at the same time, resulting in a situation of "double high deposits and loans"? On related issues, the Nandu reporter asked Bona Film. As of press time, no response has been received.

In addition, at the end of the reporting period, Bona Film also had about 900 million yuan of monetary funds, mainly "internal and external loans deposited in banks shorter than one year (inclusive) security deposit, pledge and letter of guarantee deposit". This means that the company has a total of about 3 billion yuan of funds for "internal guarantee and external loans".

According to the prospectus, Bona Film has a total of 15 overseas subsidiaries and also has certain overseas business, and the 2022 annual report shows that 97.71% of Bona Film's operating income is contributed by China.

On the one hand, the release of the three major series of fist products has been completed, and the new explosive models have not yet appeared; On the other hand, rising borrowing and the financial costs that come with it; Coupled with huge funds to provide guarantees for overseas companies, if it wishes to land on A-shares for one year, can Bona Film, which has just started a new journey, maintain its former glory?

Written by: Nandu reporter Miao Lingyun from Shanghai