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<Research>G Sachs: LNY CN Consumption Shows Offline Biz Format Divergence; Box Office Slips 40%
Recommend 23 Positive 34 Negative 27 |
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Offline entertainment during the Lunar New Year (LNY) showed a trend of divergence, with high-quality live content supply being the core driver of entertainment consumption, Goldman Sachs issued a research report saying. During this year's LNY, tourism consumption grew by 19% YoY, while the box office performed ordinarily, reaching only RMB5.7 billion, down 40% YoY, returning to pre-COVID-19 levels. This phenomenon is attributed to the lack of quality works this year, compared to the RMB4.8 billion box office of Nezha 2 during the 2025 Spring Festival period. On the individual stock level, as recent share prices have corrected due to disruptive AI impacts and competition concerns, the broker observed that some companies' current stock prices are approaching the low end of their five-year PE ratio range, such as TENCENT (00700.HK) at 15x, NTES-S (09999.HK) at 13x, and KUAISHOU-W (01024.HK) at 10x. However, EPS are expected to achieve high single-digit to low double-digit YoY growth in 2026. In terms of the competitive landscape of the entertainment industry, KUAISHOU-W/ BILIBILI-W (09626.HK) had a solid business foundation and AI potential, while music/ live streaming businesses faced more intense competition. Goldman Sachs also lowered its expectations for DAMAI ENT (01060.HK) to reflect potential movie losses and pressure on ticketing business cut rates, but expected IP-related merchandise to maintain double-digit growth, with overall profit margins steadily improving and an over 30% EPS growth for FY2027. Therefore, the broker kept rating at Buy, and dropped its target price from $1.17 to $1.07. AASTOCKS Financial News Website: www.aastocks.com |
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