Maoyan Entertainment Announces 2019 Annual Results
BEIJING,March 24,2020 -- Maoyan Entertainment ("Maoyan" or the "Company"),a leading platform providing innovative Internet empowered entertainment services in China,today announced its audited consolidated results for the year ended December 31,2019.
Full Year 2019 Financial Highlights
Revenue increased by 13.6% to RMB4,267.5 million from RMB3,755.0 million in 2018.
Gross profit increased by 12.8% to RMB2,657.1 million from RMB2,356.2 million in 2018.
Selling and marketing expenses as a percentage of total revenues decreased to 36.3% from 51.7% in 2018.
Profit for the year increased to RMB458.9 million,compared to a loss for the year of RMB138.4 million in 2018.
Adjusted EBITDA[1] increased by 312.9% to RMB946.4 million from RMB229.2 million in 2018.
Adjusted net profit[2]increased by 142.4% to RMB703.2 million from RMB290.1 million in 2018.
Full Year 2019 Operating Highlights
Gross Merchandise Value ("GMV")for the Company's online movie ticketing service increased by 6.7%.
GMV for the Company's online event ticketing service increased by 15.1%.
The number of movie tickets sold on the Company's platform increased by 0.9%.
The total gross box office of movies that the Company acted as the lead distributor for was RMB7.4 billion.
[1]The Company defined EBITDA as operating profit/(loss) for the year adjusted for depreciation and amortization expenses. The Company adds back share-based compensation and listing expenses to EBITDA to derive adjusted EBITDA.
[2]The Company defined adjusted net profit as net profit/(loss) for the year adjusted by adding back share-based compensation,fair value loss on convertible bonds classified as financial liabilities at fair value through profit or loss,listing expenses,the amortization of intangible assets resulting from business combinations and the impairment provision of goodwill resulting from business combinations.
BUSINESS REVIEW AND OUTLOOK
In this announcement,"we","us" and "our" refer to the Company.
1. Company Business Highlights
Online Entertainment Ticketing Services
In 2019,the total gross box office for China's movie industry was RMB64.266 billion,representing a year-on-year increase of 5.4%,of which total gross box office for domestic movies was RMB41.175 billion,representing a year-on-year increase of 8.65% and accounting for 64.07% of China's total gross box office. In addition,total movie theater attendance was 1.727 billion in 2019,representing a year-on-year increase of 0.5%. Given the Chinese movie market's continuous growth and stable online penetration,the number of transacting users for our online entertainment ticketing services continued to increase,representing a year-on-year increase of 6.7% in online movie ticketing GMV and a year-on-year increase of 0.9% in number of movie tickets sold,both of which exceeded the growth of China's movie market in 2019. Our market share of the total GMV of the ticketing business throughout 2019 exceeded 60%. As the largest online movie ticketing service provider in China,we strived to further develop our own capabilities and advantages in 2019. Leveraging our cutting-edge big data capabilities,we further explored the market's growth potential. We also increased movie theater attendance by improving user experience,which was due to our focus on user behavior and user preferences as well as our ongoing efforts to further diversify event types on our platform. As a result,we improved the operating efficiency of our movie ticketing business in the period.
In terms of total market share,online entertainment event ticketing services in China during 2019 remained flat in comparison to 2018. Maoyan's total live event ticketing GMV increased by 15.1% on a year-on-year basis in 2019. We further strengthened our online entertainment event ticketing service capabilities to provide audiences with the complete suite of ticketing services,such as ticket sales,ticket issuing,and smart admissions. As the scale of our online entertainment event ticketing services business grew in 2019,we were also engaged as the general agent for ticketing services in various ticketing projects,with the number of ticketing projects in which we acted as the general agent increasing by more than eight times on a year-on-year basis. Meanwhile,the number of tickets sold through our platform increased by more than 9 times on a year-on-year basis. Notably,we provided general agent services for major events including Lim JunJie Wayne's concert tour,Jay Chou's concert tour,The Untamed Concert,ninepercent Concert,R.1.S.E concert tour,and more.
Besides our active business expansion into the upstream segment of the online entertainment event industry,we also provided online and offline integrated marketing services for artists and organizers by fully utilizing Maoyan's formidable media matrix and media platform as well as by cooperating with high-quality platforms such as TikTok,Weibo,and Tencent Music. As a result,we became the exclusive platform for Chou Chuan-huing's concert tour and the cooperating platform of Lim JunJie Wayne's concert tour for promotion and distribution services. Furthermore,we also provided innovative promotion,marketing,and sponsorship services to artists and organizers in such famous stage plays as Duan Jin,starring Zhang Guoli,Wang Gang,and Zhang Tielin,Balcony,starring Chen Peisi,Sleep No More,and the famous teamLab series of exhibitions.
We continued to facilitate the upgrade of smart stadiums across the country by implementing smart features into large-sized stadiums and theaters as well as by providing smart solutions,including facial recognition admission solutions,paperless admission solutions,ticketing system solutions,membership subscription and marketing solutions,official WeChat mini program solutions,and other full-link solutions throughout the entertainment industry value chain.
Entertainment Content Services
We achieved major breakthroughs in our content production,distribution,and promotion capabilities. In 2019,we had acted as the lead distributor in 14 movies and achieved a total gross box office of RMB7.4 billion. In terms of ticket office,there were a total of 18 domestic movies among the top 30 movies in China during 2019,among which,owing to our extensive engagement in and assistance with the development of the movie industry in China,we were the lead distributor,a co-producer,and/or a co-distributor for 12 of the total movies. The movies that we were involved in were outstanding performers in various movie distribution schedules. Such movies included Kill Mobile,which ranked first during the New Year's Day; P Storm,which ranked first during the Qingming Festival; My Best Summer,which ranked first during Dragon Boat Festival; and My People,My Country,which ranked first during Chinese National Day.
We expanded further up the value chain to capture other sources of value creation. By investing in Huanxi Media Group Limited (a renowned film company) and Erdong Pictures Group Limited (a renowned film company),as well as by strengthening our cooperation with the FIRST International Film Festival (a platform for young filmmakers),we enhanced our connection with entertainment content producers to better empower the production of more high-quality content.
Furthermore,we undertook the production of various high-quality TV and web series. For example,we co-produced The Longest Day in Chang'an,which became one of the most popular web series in 2019,and other various TV products,including The Legendary Tavern,Father's Grassland and Mother's River,Homeland,The Galloped Era,and The Fiery Years of Gao DaXia,all of which were selected by the National Radio and Television Administration for the "100-day Exhibition of Outstanding TV Series" in celebration of the 70th Anniversary of the founding of the People's Republic of China. Our Traditional Chinese Medicine,Voyage,The Legendary Tavern,and many other products were also included by the National Radio and Television Administration to the list of "Themed Repertoire of 100 Key TV Series for 2018 to 2022."
We are dedicated to providing valuable industry insights and services to industry partners along the entertainment industry value chain. We continued to expand our service platform capabilities and improve our technological infrastructure to empower the industry with our diversified services.
Maoyan Pro has been able to expand into the comprehensive entertainment industry by providing professional industry data and information to various players along the entertainment industry value chain,including such areas as movies,TV series,web content,and short-form videos. In 2019,the market paid an increasing amount of attention to Maoyan.
Maoyan Research Institute has become a leading analysis platform in the entertainment industry,helping to grow our service business for movie and television projects by 120% in 2019. Maoyan Research Institute provides in-depth,data-based analytics on market conditions,script analysis,casting,test screening,as well as promotion and distribution to facilitate the decision-making processes of industry professionals. In addition to entering into strategic partnerships with IMAX,Sony,Tencent Pictures,and other companies,we also expanded our industry research to forge partnerships with such companies as China Literature,IMAX,and Dolby. In the meantime,we promoted the commercialization of data services,greatly improving our service efficiency. By periodically releasing market research reports,such as the publication of "The Birth of a Movie: a Guide to Entering the Movie Industry",we built a knowledge-based community and promoted industry standardization. We also introduced the first season of masterclasses for the promotion and distribution of movies and television series under our "Maoyan Research Institute Study" program to allow professional practitioners to make progress via learning together.
Our big data and AI technology platform,Maoyantong,provides industry partners with comprehensive intelligent project management tools that cover the project initiation phase,production phase,promotion and distribution phase,and screening phase,thus enabling industry partners to manage their projects with a one-stop solution. As of December 31,2019,the platform had provided professional services to nearly 200 movies and TV series.
In addition,in 2019,we also launched a full entertainment data analysis platform,Maoyan Zhiduoxing. Maoyan Zhiduoxing provides users with data to cover the full breadth of entertainment categories,including movies,dramas,variety shows,novels,artist events,and online entertainment events. The platform's multi-dimensional data analysis capabilities encompass thousands of dimensions of data indicators,collecting data in real time from social media channels,long-form video platforms,and short-form video platforms. There is an abundance of potential use cases for such data analysis capabilities,including industry market analysis,market policy analysis,AI script evaluation,consumer behavior research,and more.
Advertising Services and Others
During 2019,our revenue from advertising and other businesses experienced a significant year-on-year increase of 39.7%,primarily driven by continuous investments into our marketing and financing platforms:
We deepened the integration of our extensive online and offline marketing resources to better reach our target audience. These online resources include our online access portals,such as Weixin,QQ,Meituan,Dianping,Maoyan,and Gewara.
We took the helm in the domestic entertainment ticketing business by establishing a mini-program platform catering to more than 350 million users. In the meantime,we constructed a grassroots media matrix comprised of hundreds of accounts,including Maoyan Movie and Ms. Xiaoxiao Sha,which has attracted over 300 million fans and subsequently grown into a leading entertainment media platform.
We established a controllable and stable data system for traffic. This system is driven by two synchronous factors,namely,"self-owned traffic data" and "platform traffic data." Our Maoyan app has already reported more than 10 million monthly active users for its "self-owned traffic data" and has also ranked first within the entertainment ticketing category among domestic mobile internet apps on a consecutive basis.
Maoyan Video MCN won the Award of "Annual Most Commercially Valued MCN Institutions" by virtue of its footprint on various platforms,including TikTok,and Kuaishou.
Furthermore,owing to self-incubation and strategic collaboration with separate institutions,we built an entertainment ecosystem by introducing high-quality short-form videos,encompassing content,brands,and user demands,to empower the entertainment industry.
We provided Mars Group with one-stop integrated marketing services,comprised of online and offline advertising resources,such as grassroots media videos,celebrities,artists,and movie tickets. On the other hand,we also provided premier advertising placements to over one hundred brand customers,including nearly one hundred customized marketing solutions for JD,TikTok,Buick,Tiffany,Chanel,and KFC.
Recently,we launched a comprehensive entertainment financing platform to provide industry participants along the value chain with customized funding solutions to secure financial support. This helped industry players to resolve such problems as financing challenges,slowing cash flow,and other industrial weaknesses. Our service targets include cinemas,movie distributors and investors,TV series producers,and performance sponsors.
2. Company Outlook
Looking into the future,we will continue to develop the comprehensive entertainment industry. In accordance with our "Cat Claw Strategic Model," we will further develop the capabilities of our five platforms,our comprehensive entertainment ticketing platform,product platform,data platform,marketing platform,and financing platform,so as to shore up our business synergies and accumulation of value,which in return will generate more value for the entertainment industry. In the meantime,we will also continue to expand and increase our business scenarios and capabilities,based on the core requirements of our industry,development of the company,challenges,and commercial possibilities.
So far as our ticketing business platform is concerned,we will continue to strengthen the depth and width of collaborations with players in upstream and downstream segments of the value chain,while constantly exploring and advancing additional project investments and collaborations in various areas,including pre-distribution advertising,ticketing systems,and upstream sources. Advances in these areas will help to increase our industry market share and commercial value. As for product platforms,we will continue to strengthen our in-house research and development,optimize our business synergies,and increase our accumulation of value to enrich our product mix and further enhance our internet-based strengths. In addition,we will continue to expand our online business products and develop our product matrix,which includes Maoyantong and Changguantong. In terms of data platforms,we plan to further improve our data analysis capabilities and analytical tools to facilitate the development of industrial digitization. For our marketing platforms,we will continue to build a marketing and promotion platform that is driven by convergence,integrating online and offline capabilities to consolidate industrial resources,enriching entertainment marketing scenes,expanding cinema and entertainment event advertisements,as well as developing other new business formats. This will further improve and diversify our integrated entertainment marketing services. In regards to funding platforms,we will provide more optimal and suitable arrangements,joining hands with our industrial partners to move forward and achieve mutual benefits.
Ever since Maoyan became a publicly-listed company,we have been committed to strengthening our strategic collaborations with shareholders. For instance,we have been working with Tencent,an important strategic shareholder,to develop the "Tencent and Maoyan Alliance" by entering into a series of cooperative framework agreements to further strengthen the depth of our online and offline collaborations. In December 2019,FountainVest became our new shareholder. By leveraging FountainVest's investment experience and existing business presence in the entertainment sector,we will drive the further expansion of this business segment to achieve long-term development and introduce more premier entertainment content and experiences to the industry.
In early 2020,the COVID-19 outbreak is causing significant impacts toworld economy,putting the entire entertainment industry to the stern test. As an important player in this industry,we always place the highest priority on the interests of users while also caring and paying attention to our employees and industry partners. Besides working shoulder-to-shoulder with upstream and downstream partners in the industry to overcome these challenges,we will provide assistance and support in the form of business collaboration and funding. We helped cinemas to reduce their inventories of Spring Festival articles for sale by working with Meituan and utilizing their platform's take-out services. We placed a high value on the safety of our employees and thus adopted various measures in a prompt manner to ensure their health and safety,including flexible work-from-home practices and the procurement of supplies for epidemic prevention and control.
We are confident that the epidemic will eventually come to an end with the entertainment industry and China's economy embracing a better development landscape. As a result,both Maoyan and its industrial partners will be in a stronger position and create greater opportunities to drive industry sustainability for the foreseeable future. At last,we salute the warriors on the firing line for fighting against this epidemic. We also express our heartfelt appreciation to all of our colleagues,shareholders,and partners for their tremendous support.
About Maoyan Entertainment
Maoyan Entertainment is a leading platform providing innovative Internet empowered entertainment services in China. Since its inception,Maoyan has grown from an online movie ticketing service provider to an innovative one-stop platform for entertainment services. Maoyan has a comprehensive strategy to become a leading platform servicing the entire entertainment industry in China. The upgraded strategy is supported by five key platform pillars: online ticketing platform,products and services platform,and funding platform.
Non-GAAP Financial Measures
To supplement the consolidated results of the Group prepared in accordance with IFRS,certain additional non-GAAP financial measures (in terms of,operating profit,operating margin,profit for the period,net margin,profit attributable to equity holders of the Company,basic EPS and diluted EPS),have been presented in this press release. These unaudited non-GAAP financial measures should be considered in addition to,not as a substitute for,measures of the Group's financial performance prepared in accordance with IFRS. In addition,these non-GAAP financial measures may be defined differently from similar terms used by other companies.
The Company's management believes that the non-GAAP financial measures provide investors with useful
supplementary information to assess the performance of the Group's core operations by excluding certain noncash items and certain impact of M&A transactions. In addition,non-GAAP adjustments include relevant non-GAAP adjustments for the Group's material associates based on available published financials of the relevant material associates,or estimates made by the Company's management based on available information,certain expectations,assumptions and premises.
Forward-Looking Statements
This press release contains forward-looking statements relating to the business outlook,forecast business plans and growth strategies of the Company. These forward-looking statements are based on information currently available to the Company and are stated herein on the basis of the outlook at the time of this press release. They are based on certain expectations,assumptions and premises,some of which are subjective or beyond our control. These forward-looking statements may prove to be incorrect and may not be realised in future. Underlying the forward-looking statements is a large number of risks and uncertainties. Further information regarding these risks and uncertainties is included in our other public disclosure documents on our corporate website.
Investor Relations Contact
Maoyan Entertainment
Email: ir@maoyan.com
ICR Inc.
Xinran Rao
Email: Maoyan@icrinc.com
Tel: +1 (212) 517-4035
