Maoyan Entertainment Announces 2020 Annual Results
BEIJING,March 31,2021 -- Maoyan Entertainment ("Maoyan" or the "Company",1896.HK),a leading platform providing innovative Internet empowered entertainment services in China,today announced its audited consolidated results for the year ended December 31,2020.
Full Year 2020 Financial Highlights
Revenue was RMB1,365.7 million,compared with RMB4,267.5 million in 2019.
Gross profit was RMB537.3 million,compared with RMB2,657.1 million in 2019.
Selling and marketing expenses decreased by 68.6% to RMB485.8 million from RMB1,547.8 million in 2019.
Loss for the year of 2020 was RMB646.3 million,compared with a profit of RMB458.9 million in 2019.
Adjusted EBITDA[1]was negative RMB360.3 million,compared with positive RMB946.4 million in 2019.
Adjusted net loss[2] was RMB435.6 million,compared with an adjusted net profit of RMB703.2 million in 2019.
[1] In 2020 and 2019,the Company defined EBITDA as operating (loss)/profit for the year adjusted for depreciation and amortization expenses. The Company added back share-based compensation and listing expenses to EBITDA to derive adjusted EBITDA.
[2] In 2020 and 2019,the Company defined adjusted net (loss)/profit as net (loss)/profit 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 and amortization of intangible assets resulting from business combinations.
BUSINESS REVIEW AND OUTLOOK
In this announcement,"we","us" and "our" refer to the Company.
In 2020,due to COVID-19,all the cinemas in mainland China had been shut down for 183 days from January 23,2020,which posed unprecedented difficulties and challenges throughout the entire movie industry value chain. As the epidemic was kept under control in China and the strong consumer demand for offline movie watching was released continuously,the box office of the Chinese movie market has bounced back significantly,taking the lead in industry recovery among global movie markets.
During the outbreak of the epidemic,we took active measures to assist the recovery of the industry,enhanced our platform service capabilities,diversified our reserve of contents and strengthened the extent and depth of our participation in the industry. Meanwhile,leveraging on our asset-light business model and strict cost management,we had excellent risk-resistant ability and driving force of business development,which help us better mitigate the impact of the epidemic and promote the recovery and robust development of the Company's business.
Keep Firm Foothold to Reduce Cost and Increase Efficiency
Since 2020,the national box office market has showed strong momentum of recovery anddevelopment. In 2020,the total gross box office for China's movie industry was approximatelyRMB20.3 billion. Even as cinemas strictly implemented the 75% attendance limit imposed bythe government,the seven-day box office on National Day Holiday in 2020 was RMB3.7 billion,which was recovered to more than 80% level compared to that in 2019 holiday period. As ofDecember 31,the cumulative number of cinema screens in mainland China increased by8.3% year-over-year to 75,581. As of February 28,2021,China's year-to-date total box office grewby 7% to more than RMB15.5 billion.
For Maoyan,our movie ticketing business has recovered along with the recovery of the market.During the reporting period,our market share was stable and we continued to maintain our leadingposition in the industry. In the future,we will continue to promote the construction of ticketingsystem,strictly control our costs and expenses of ticketing business,stabilize the market share andrevenue performance,and further improve the profitability of ticketing business.
Build up Profound Strength by Cultivating Quality Contents
In 2020,we have participated in many movies and TV series,which have been successivelyreleased to the public with the re-opening of cinemas and the broadcasting of TV stations andvideo platforms. As an important participant in the pan entertainment industry,we continuedto enhance our extent and depth of participation in the industry,strengthened content reserves,continued to expand our footprints upstream into the industry,and further improved the penetrationand profitability of the blockbuster contents.
In terms of cinema movies,Maoyan has participated as a producer/distributor in three of the fourmovies that each achieved more than RMB1 billion box offices in 2020,respectively My People,My Homeland,Legend of Deificationand The Sacrifice. Inaddition,the movies,such as One Secondand Back To The Wharfproducedand mainly distributed by us have had positive reception in the industry,which further validate ourability in movie selection,promotion and distribution. For example,Back To The Wharf,as the first realised movie self-produced by Maoyan,was shortlisted for the 23rd session ofSIFF Golden Goblet Awards,and related unit of Cairo International Movie Festival and IFFAM.
We have built up an abundant reserve of contents which will be released in 2021 and beyond.We will also continue to enhance our participation in quality movies going forward,especiallyto deeply participate in the blockbusters for the important occasions. For example,we haveparticipated in five of the seven movies that were released on the first day of the Spring Festival in2021 as a producer/distributor. Among them,the movie Hi,Mom,which we actedas the main producer and guaranteed distributor,realized excellent performance and turned outto be the dark horse in the Spring Festival of 2021. As of March 30,the box office is overRMB5.3 billion,ranking the Second in the history of Chinese movies. There will be a series ofquality movies that we acting as producer/distributor at opportune time,including but not limitedto 1921,Raging Fire,Chinese Doctors,Across the Furious Sea,Warriors of Future and Knock,Knock.
In addition,we have also started the self-production of cinema movies since 2019. Leveragingour high professional standard and content development expertise,we have produced morequality contents to extend the depth of our proprietary content reserves and strengthen our ownIPs development. After Back to the Wharf,we are currently in active production ofmovies such as On Your Mark,Game Start,A Film Is Born,Flaming Cloud,Moses On The Plain,The Woman in the Storm and New Five Golden Flowerwhich will be released successively.
In addition to cinema movies,we were also constantly enriching content categories,and continuedto increase the production and participation of TV series and streaming movies. In 2020,weco-produced two TV dramas with Tencent such as Miss Crow and Mr. Lizard and Babel. The law-themed suspense TV series The Last Straw developed and produced by us is planned to be shot in the first half of 2021,which will beexclusively broadcasted on Youku. Genius Go Talent,Beauty in Truth,Love Me If You Dare and several other TV series self-produced by Maoyan areplanned to be shot this year. Besides,we have gradually established a solid roadmap for producingstreaming movie content in a variety of categories such as northeastern comedy,new martial arts,and military,etc. We plan to release those online movies gradually in 2021 and beyond.
Make Whole Network Integration to Continue to Strengthen Internet EntertainmentPromotion Platform Capabilities
As a leading domestic movie distributor and a comprehensive Internet entertainment marketingplatform,we gave full play to the nature and advantages of our "Internet and Entertainment"platform. We continued to build an online and offline integrated marketing ecosystem,integratedthe resources and advantages of Maoyan's own platform and the major platforms in the industry toassist the movie producers with increasingly targeted and effectively promotion solutions.
To address the different levels of marketing demands across the whole industry,we provideboth standardized and customized movie promotion solutions. Our standardized promotion anddistribution products,such as data consulting,precision marketing,material management andmonitoring listed in Maoyan Pro,provide assistance to movie producers to improveefficiency. In addition,we also provided customized products and services for industry partner toachieve optimal promotion and distribution performance. For example,for the movie Hi,which was main produced and guaranteed distributed by us,we made continuousinnovations by combining the environmental changes and the characteristics of the movie underthe epidemic situation,and successively launched several innovative promotion and distributionsolutions,such as "cloud road show","cloud block booking"and "red packet"etc.,helped to boost the movie's appeal,generate audience interest leading toits official release,and make it stand out above other competing titles. Our ability of continuousaccumulation and innovation has been widely recognized by the market and further proved thepromotion and distribution ability of Maoyan.
In order to support the realization and implementation of promotion and distribution products,wecontinued to build and enrich our promotion and distribution resources,and devoted ourselves tobuilding our omni-channel media ecosystem covering the whole scenes of users' online life. Upto now,the total user number of our Maoyan mini program ecosystem covering WeChat,Douyin,Baidu and other platforms has exceeded 450 million.
We were committed to creating industry standardization indicators,such as "real-time wish-listgathering"and "real-time pre-sale"index of Maoyan Pro,and improved the width,depth and accuracy of the coverage of such indicators,aiming to providea more accurate and effective reference indicators and codes of conduct. Take "real-time wishlistgathering" as an example,we continued to strengthen cooperation with major platforms suchas Douyin on film data and platform cooperation to get access to the entry of each viewer,andwe accessed with Douyin's "wish-list"index,enabling the movie producers to constantlymonitor the accuracy and effectiveness of the promotion and distribution performance of allplatforms.
Embrace Changes to Fortify Service Ability of Data Platform
Leveraging on Maoyan's advantages in the movie ticketing platform and continuous participationin the pan entertainment industry,we have accumulated a wealth of industry data. Besides,weconstantly expanded data sources,updated data dimensions and professional functions,strived toprovide comprehensive and professional data reference for the entire industry,and to provide thebest data analysis and data support solutions for industry partners.
In 2020,we further strengthened the cooperation with major online platforms,accessed to datasharing resources,and improved the industry reference indicators in film box office,originalmusic,movie traffic data,user search data and other aspects,including but not limited to:
Accessed to Tencent Video's streaming movie box office performance data,becoming the first platform to collect this key metric from all three of the major Chinese video platforms including Tencent Video,iQIYI and Youku;
Launched "Uni Chart" of Tencent Music Group which syndicated data on movie MV lists,movie soundtrack lists,TV series MV lists,TV series soundtrack lists and variety show soundtrack lists to help our industry partners easily monitor the effectiveness of their music marketing initiatives;
Launched "Weibo Movie Chart" and combined WeChat Movie Popularity Chart and Baidu Movie Popularity Chart to provide more complete social media popularity monitoring data for the industry;
Launched "Douyin Movie Chart","Douyin Drama Chart" and "Douyin Shows Chart". The complete user data link and ecosystem brought by such data complementarity means the comprehensive upgrade of the refinement of online promotion and distribution in the content industry;
Connected the cinema resources of Maoyan to Baidu ecosystem through mini programs to obtain accurate traffic of users' searches. At the same time,linked with Baidu App,Bai Jiahao and Baidu Map to realize traffic aggregation within Baidu ecosystem.
The comprehensive coverage and integration of the above data capabilities further lift Maoyan'splatform service capabilities and data service capabilities. In 2020,we provided data service formore than 40 movies,covering movies released on National Day,New Year's Day and SpringFestival and other major Chinese holiday seasons. In 2021,we will continue to enhance our dataanalysis capabilities and data support solutions for entertainment contents. For example,four ofthe seven movies released in the Spring Festival in 2021 used the data service of Maoyan ResearchInstitute,which reflects the coverage rate of our data service. In addition to cinema movies,wehave also expanded the data service and platform service for streaming contents. For example,we provided research and testing services for Run For Young,A MurderousAffair in Horizon Tower and other TV series,and provided data service for Legend ofRavaging Dynasties 2,Once Upon a Time in the Northeast I Am Haizhu and other streaming movies.
Meanwhile,Maoyan also continued to attach importance to the data service and support for thewhole industry,to keep the whole industry partners informed of industry information and trends.In 2020,Maoyan Research Institute released dozens of research reports on the impact of theepidemic,box office and schedule,the streaming movie market,etc.,to assist the rapid recovery ofthe industry with big data.
Achieve Sound Growth to Build a Better Life
Based on the above,the pan entertainment industry was severely impacted by the epidemic in2020. However,due to the effective management and control over the epidemic and with the jointefforts of all industry participants,the entertainment industry in China ushered in full recoveryafter general shutdown,and the New Year's Day and Spring Festival releases in 2021 also recordednotable box office. Moreover,certain movies that we participated in,such as Hi,Detective Chinatown 3 and A Writer's Odyssey,recordedexcellent performance as a result of recovery of the Chinese movie market,which is expected tofurther boost the Company's performance for the first quarter of 2021. We remain confident aboutour own growth prospect as well as the overall industry's long-term healthy development. Webelieve the audiences will always support quality contents. By embracing data and innovations,making quality contents reach to suitable audiences we can help to leverage the value of thecontent industry and build a better life.
As a leading platform to provide innovative Internet services for the whole entertainment industry,we will continue to enhance our core abilities,present more quality contents,further improve thebasic service capacity of the platform and facilitate the recovery and development of the industry.Finally,we would like to express our heartfelt thanks to all colleagues,shareholders and industrypartners for their trust and companionship. Let us work together and generate great values for ourindustry!
About Maoyan Entertainment
Maoyan Entertainment (1896.HK) is a leading internet platform providing innovative services in China's comprehensive entertainment industry. 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.
This strategy is supported by its five key platforms: its comprehensive entertainment ticketing platform,product platform,data platform,marketing platform,and financing 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
