Net profit keeps growing in the first quarter. Is Huace’s ecological strategy right?

The arrival of the financial reporting season not only allows listed companies to successively announce the performance of the past year, but also shows the operation of the first quarter of this year to the outside world. Among the film and television listed companies, Huace film and television is one of the first to disclose the first quarter forecast, and announced in the evening of April 7 that the net profit attributable to shareholders of the listed company continued to maintain a year-on-year growth during the reporting period. In recent years, Huace film and television is promoting its own ecological strategy, laying out more fields such as film and television content, artist brokerage, music and so on. This also makes the industry think, is Huace film and television’s ecological strategy right?

According to the performance forecast for the first quarter of 2021 released by Huace film and television, during the reporting period, the company’s net profit attributable to listed companies is expected to be 115-137 million yuan, an increase of 4.64% – 24.66% over the same period of last year. In addition, the impact of non recurring profit and loss on net profit of Huace film and television in the first quarter of 2021 was about 8.9206 million yuan, compared with 22.931 million yuan in the same period of last year. The company’s non recurring profit and loss was mainly composed of government subsidies included in the current profit and loss.

Specifically, at the business level, the announcement shows that during the reporting period, Huace film and television has launched a total of 3 new TV series projects, including 7 new ones, 2 new ones, and 6 new ones; 4 movie projects (including online movies) have been released; and the main revenue recognition projects include TV series “long song line”, “you are my fortress”, “Jin Xin Yu”, “Hello, Anyi” and “the age of awakening” , the film “assassinating the novelist”, as well as derivative ecological businesses such as artist brokerage, music, advertising, game licensing, etc.

It points out that the company’s profit forecast for the year 2020 is not only attributable to the company’s net profit of – 75 million yuan in the past quarter.

As we all know, the film and television market is now in an adjustment period. At the same time, it has experienced a special period of impact. Many listed film and television companies have suffered from performance decline or loss in the past year. Only a few companies have achieved profits and performance growth. This background also makes Huace film and television industry pay attention to it. From the business description of Huace film and television, at the present stage, the company is carrying out ecological strategy. While continuing to produce content ecology, it also lays out other fields of business to realize diversified realization.

According to public information, Huace film and television has set up subsidiaries with relevant partners, such as Huace Xinying is responsible for the video RBT business and music incubation business, newzer culture is responsible for the development and expansion of short video business, cehong culture is responsible for the co construction and cooperation of consumer goods brands, and Huace Jiashang is responsible for the cooperation of artist training courses. Moreover, Huace film and television revealed in its 2020 performance forecast that in 2021, the company will enrich its content product matrix, develop its film business, and deepen its animation and music business; innovate its content form, and develop into a large-scale supplier of Internet all media high-quality content and content ecological commercialization.

“The realization of multiple income channels is one of the ways for listed companies to stabilize their performance, and the film and television industry is no exception. It is also the layout direction of some film and television listed companies to expand the market space by carrying out an extensible layout around the core main business.” In the view of Zeng Rong, an analyst in the film and television media industry, planning derivative business can indeed enrich the business model, but for the listed film and television companies, all derivative and ecological construction are inseparable from ensuring the output and quality of the core content. Only by expanding in more fields on the basis of ensuring the content can we plan for a larger imagination space, otherwise it will bring more opportunities to ourselves The risks and challenges of the project.

Beijing Business News (reporter Zheng Rui)

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