China’s Largest Film Company Rakes in 60% More Revenues in First Quarter

BEIJING, April 12 (TMTPOST) – China Film Group Corporation (CFGC) (SH600977) released a total of nine films in the first quarter of this year, according to the company’s recent announcement.

The nine films have grossed a cumulative box office revenue of 11.9 billion yuan, accounting for an impressive 85.40% of the total box office earnings of Chinese films during the same period. This signifies a significant year-on-year increase of about 61% in the cumulative box office of Chinese films during the first quarter, leaving a positive impact on CFGC’s stock price. Although the share price dipped on Monday, it rebounded the next day, rising by 0.77% and closing at 14.99 yuan. It reached a one-year high of 15.11 yuan per share at one point, reflecting the positive sentiment in the market towards the company’s performance.

CFGC boasts the highest involvement in films in the 2023 Spring Festival season among all A-share listed companies. The company recently stated on its investor Q&A platform that all seven major films released during the period were either produced or distributed by it. Among them, the Chinese science fiction blockbuster Wandering Earth 2 has made waves by breaking 32 records on its first day of release, accumulating a whopping box office revenue of 4.03 billion yuan as of April 7. The company has also participated in the production and co-distribution of other notable films during the period, such as Full River Red, Hidden Blade, and Boonie Bears: Guardian Code.

The importance of the Spring Festival season for film and television companies is self-evident. According to an anonymous film source, in previous years, the box office earnings during the Spring Festival holiday typically accounted for 15% to 20% of the total annual box office revenue. Prior to the COVID-19 pandemic, the Spring Festival box office in 2019 reached a substantial 5.9 billion yuan, driven by the unexpected success of the film Wandering Earth. Remarkably, this year’s Spring Festival box office surpassed even the high of 2019, reaching an impressive 6.77 billion yuan, signifying a remarkable breakthrough.

Over the past three years, the film and television industry has faced significant challenges due to the epidemic, resulting in considerable pressure on stock performance. CFGC recently disclosed its performance forecast for 2022, revealing a net loss attributable to shareholders ranging from -200 million yuan to -240 million yuan, a stark contrast to the profit recorded during the same period in 2021. The company explained that this unfavorable outcome is due to the impact of the pandemic, as well as provisions made for bad debts on receivables.

Following the boom of the Spring Festival season, movie companies are expected to see an improvement in their performance. CFGC’s recent positive development is not the only one in the industry. Beijing Enlight Media, for instance, announced earlier this year that the film Full River Red, which its wholly-owned subsidiary participated in, had generated a cumulative box office revenue (including service fees) of approximately 2.93 billion yuan as of 24:00 on January 28. This impressive figure exceeds 50% of the company’s operating revenue in 2022 as per the audited consolidated financial statements. These positive developments highlight the potential for improved performance in the film industry.

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