21st Century Business Herald reporter Zhang Sainan and Xi Li Wan report from Shanghai
A few days ago, the Central Economic Work Conference was held in Beijing, and the meeting proposed that efforts should be made to expand domestic demand. Promote consumption from post-epidemic recovery to continuous expansion, cultivate and expand new consumption, vigorously develop digital consumption, green consumption, and healthy consumption, and actively cultivate new consumption growth points such as smart homes, cultural and entertainment tourism, sports events, and domestic "trendy products".
Recreational tourism, as the name suggests, is cultural entertainment and tourism consumption. On a larger scale, the sports events and domestic "trendy products" mentioned in the above-mentioned meetings are also related to this. Market participants generally believe that the above concepts were put forward at the Central Economic Work Conference, which sets the economic trend next year, and will promote the entertainment industry to become a new economic growth point in 2024.
In fact, since 2023, sub-sectors including media, film and television, games, and tourism have shown a warming trend. One of the most intuitive indicators is that taking the 38 companies in the entertainment sector (excluding the 2 companies with missing data) in Shenzhen as an example, the total revenue data has recovered and exceeded the level of 2019.
This article is the "Deep Exploration of A-share Growth" entertainment and tourism chapter, which will focus on 40 entertainment companies and 12 tourism companies in Shenzhen to get a glimpse of the industry's resilience and growth space.
The entertainment sector has recovered significantly
According to Wind data, there are 40 companies in the A-share Shenzhen cultural and entertainment sector, of which 21 are game companies, with Century Huatong (002602.SZ) and Kunlun Wanwei (300418. SZ), Sanqi Mutual Entertainment (002555. SZ) and 14 film and television companies, including Wanda Film (002739.SZ) and Guangguang Media (300251. SZ), 2 animation companies, namely Alpha Entertainment (002292. SZ), *ST Meisheng (002699.SZ), and 3 other cultural and entertainment companies, involving performances, sports, etc.
Overall, in terms of quantity, it is not difficult to find that game companies occupy half of the entertainment sector, and in terms of market capitalization, game companies are also in the forefront, Sanqi Mutual Entertainment, Kunlun Wanwei, Century Huatong three game companies ranked in the top three (based on the closing price on December 22), the first two companies have a market value of more than 40 billion yuan, and the third has a market value of nearly 40 billion yuan. In fourth place is the film and television company Wanda Film, with a market value of nearly 30 billion yuan.
This was followed by Giant Network (002558. SZ), Keying Network (002517. SZ), Perfect World (002624. SZ ), Guangguang Media (300251. SZ), with a market capitalization of more than 20 billion, followed by Tom Cat (300459. SZ), Shenzhou Taiyue (300002. SZ) has a market capitalization of more than 10 billion. Among them, only one Guangguang Media belongs to the film and television industry, and the rest are game companies.
From the perspective of the nature of enterprises, the companies in the entertainment sector are mainly private enterprises, with a total of 29, and 2 state-owned enterprises, namely Happy Blue Ocean (300528. SZ), Ciwen Media (002343. SZ), all of which are film and television companies.
In terms of regions, the Yangtze River Delta, as the most economically active region in China, has gathered a number of active entertainment companies, with a total of 12 companies from the Yangtze River Delta, including 8 from Zhejiang, Beijing deserves to be the national cultural center, with 9 companies from Beijing, and 9 companies from Guangdong.
Returning to the changes in the company's performance, a clear trend is that the recovery of the entertainment sector is very obvious. In the first three quarters of this year, the total revenue of 38 entertainment companies (excluding the 2 companies with missing data) was 77.86 billion yuan, compared with 69.2 billion yuan in the previous year and 76.3 billion yuan in the same period in 2019. In the context of the industry decline in previous years, the total revenue of the sector in the first three quarters of this year returned to the pre-epidemic level.
Fuchun shares related to the 21st Century Business Herald reporter said, "At present, the state supports consumption, we just obtained the domestic version this month, these are more positive measures, we also enjoy the policy advantages." ”
In reality, consumers and investors can feel the popularity of the entertainment market, and performances, movies and short dramas are all eye-catching. On the one hand, there is the popularity of offline performances, and on the other hand, there are also many phenomenal works in the film and television drama industry, and the supply side of the industry is abundant. At the same time, the concept of short drama games has opened the "Hurricane" mode, and under the popularity of the live-action film and television interactive game "I'm Surrounded by Beautiful Women", short dramas have stood on the outlet, and the capital market has set off a "short drama fever".
Tourism consumption is under pressure
Compared with the strong recovery of the entertainment market, although the tourism market is also accelerating its recovery, from the performance of listed companies, the performance needs to be further recovered.
In the first three quarters of this year, domestic tourism reached 3.67 billion person-times, and tourism revenue reached 3.7 trillion yuan, an increase of 75% and 114% year-on-year respectively. Residents' demand for tourism has been released in a concentrated manner, and residents' travel has increased substantially. While driving the expansion of related consumption, it has also promoted economic recovery. The relevant person in charge of the Ministry of Culture and Tourism previously introduced at the press conference.
Since the beginning of this year, with the major and decisive victory in epidemic prevention and control and the continuous effect of economic stabilization policies, the mainland tourism industry has started a rapid recovery and steady improvement development process.
In the first three quarters of this year, 12 tourism companies in Shenzhen achieved a total revenue of 10.5 billion yuan and a net profit of 1.18 billion yuan, compared with 3.8 billion yuan and a loss of 940 million yuan in the same period last year.
Among them, Lingnan Holdings (000524. SZ) is currently the largest tourism company in Shenzhen in terms of revenue, with operating income of 2.485 billion yuan, a year-on-year increase of 190.93%, a net profit attributable to the parent company of 57 million yuan, a year-on-year increase of 159.88%, and a profit of 52 million yuan, a year-on-year increase of 137.48%. Zhongxin Tourism(002707. SZ) revenue scale also exceeded 2 billion yuan, the first three quarters of the operating income of 2.053 billion yuan, a year-on-year increase of 647.46%, the net profit attributable to shareholders of listed companies of 14.1327 million yuan, a year-on-year increase of 110.72%, the performance growth rate is also very impressive.
In an interview, Zhongxin Tourism said that "the company's overall business has recovered well this year, especially after the outbound travel market is slowly liberalized, outbound travel and domestic travel business are steadily picking up, and the overall recovery is better than expected." ”
"On the whole, everyone's enthusiasm for travel this year is relatively high, the May Day holiday, the 11th Golden Week, and next year's Spring Festival, the tourism market is the overall benefit, and we can look forward to the recovery of the entire tourism market next year. Zhongxin tourism related people to the 21st Century Business Herald reporter said.
Not only that, among the other 10 companies in Shenzhen, only one saw a decline in net profit in the first three quarters, while the rest all grew positively, and 8 companies grew at a double-digit rate.
However, if compared with 2019, the total revenue of the sector in the first three quarters of that year was 27.83 billion yuan and the net profit was 2.46 billion yuan, and the performance of listed companies in the tourism sector has not yet fully recovered.
Admittedly, recovery remains the dominant tone for these companies. In an interview with the media, the management of Lingnan Holdings pointed out: "At present, grasping the opportunity of recovery and growth, accurately corresponding to the segmentation of consumer group needs, rational investment layout and scale, calmly returning to the rationality and logic of the company's pursuit of profitability, and persistently forging the core competitiveness of the enterprise are the top priorities for the sustainable development of cultural tourism." ”
In addition, in terms of market capitalization, Songcheng Performing Arts (300144. SZ) market value of 25.5 billion yuan, the first three quarters of the performance also achieved high growth, in addition, Zhongxin Tourism, *ST Caesar (000796.SZ), Lingnan Holdings, Yunnan Tourism (002059. SZ) has a market capitalization of more than 5 billion.
From a regional point of view, the distribution of tourism companies is still related to the endowment of natural scenery resources, unlike entertainment companies mainly concentrated in the Yangtze River Delta and other places, the distribution of tourism companies is more scattered, involving Guangxi, Sichuan, Yunnan, Shaanxi, Xinjiang, Hubei and other places.
AI breathes new life
As an interesting and novel cultural tourism market, its combination with technology has always been at the forefront. Since the beginning of this year, AI has brought intelligence to emerge, which has also profoundly affected the industry and is expected to bring new driving forces.
For the entertainment industry, AI technology has two impacts, one is productivity, for the entertainment industry, the cost of content development has always occupied the most important position, and the introduction of AI technology can greatly improve the speed and efficiency of content production, greatly improving productivity. The second level is creativity, and with the help of AI tools, imagination can be better used.
Century Huatong said on the interactive platform that the company will transform from the original IDC business to AI+IDC, and the transformation of computing power business is currently progressing smoothly. Sanqi Mutual Entertainment has been deploying AI applications since 2018, and has built a complete set of digital and intelligent product matrix embedded with AI and big data technology step by step, taking the lead in realizing the full-chain empowerment of AI in game research and operation. Kunlun Wanwei means "All in" AGI and AIGC.
The film and television industry is also actively embracing AI. Guangguang Media said that the company hopes to be a pioneer in the trend of AI, and has now implanted AI into some processes of animation production. AI may have a good application prospect in the content collection and sorting and image design of animated films in the early stage, and in some aspects of mid-term production, as well as in sound, lighting, story, background and some less important characters, but the core characters and stories of animated films still need to be completed manually, and the use of AI will effectively reduce costs and increase efficiency.
Wanda Film said that it is expected that AI-related technologies will gradually be applied to multiple scenarios of content production, including the company's film and television business, advertising business and game business, which is expected to have a positive impact on expanding creative ideas, improving production efficiency, reducing costs and increasing efficiency. "We will continue to explore the development and integration of AI technology and the film field, and actively promote the high-quality development of innovative businesses. ”
In terms of tourism, taking Songcheng Performing Arts as an example, the company has built performing arts parks and eternal scene areas in Hangzhou, Shanghai, Xi'an and other places, and hundreds of eternal love and performing arts shows. The company said that AI technologies such as face recognition, chatbots, and digital marketing have been maturely applied to various scenarios of the company.
Lingnan also revealed that the company pays close attention to the development of AI and other artificial intelligence technologies, and has established a long-term strategic cooperative relationship with Tencent to promote the application and implementation of AI and other artificial intelligence in the cultural and tourism industry.
Analysts believe that entertainment, as the main position of AI applications, has prominent sector dividends and cost performance. In the context of the improvement of open source technology of AI models, the reduction of technical thresholds and computing costs, it is expected to bring efficiency improvement, cost reduction, and rich and diverse experience to users.
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