"Jiang Ziya" earned 1.5 billion yuan, but the producer, Guangguang Media, lost 11.6 billion yuan in one month

On October 27, Enlight Media released its third quarter report for 2020. The report showed that Enlight Media's revenue in the first three quarters was about 481 million yuan, a year-on-year decline of 80.46%; net profit was 63.7202 million yuan, a year-on-year decline of 94.26%. Among them, the revenue in the third quarter was about 222 million yuan, a year-on-year decline of 82.82%; net profit was 43.1482 million yuan, a year-on-year decline of 95.7%.

Regarding the decline in both revenue and net profit, Enlight Media explained in its financial report that it was mainly due to the impact of the epidemic, which caused a significant reduction in the company's film revenue. It is reported that due to the epidemic, the film "Jiang Ziya", which was mainly invested and controlled by Enlight Media's subsidiary, was postponed from the original Spring Festival to the National Day.

Earlier, Enlight Media announced that as of October 11, 2020, the cumulative box office revenue (including service fees) of "Jiang Ziya" was approximately RMB 1.456 billion, and the company's revenue from the film was approximately RMB 360 million to RMB 400 million, close to the total revenue of the first three quarters. This will also improve Enlight Media's full-year performance.

It is worth mentioning that as an animated film strongly promoted by Enlight Media this year, Jiang Ziya started off strong but ended badly. After its release, its reputation was not as good as expected, and the subsequent box office growth was weak. As of October 28, Jiang Ziya had accumulated a box office of 1.569 billion yuan. In half a month, the box office growth was only 100 million yuan. It is impossible to continue the glory of the previous work Nezha: The Devil Child Comes into the World with a box office of 5 billion yuan. The performance trend of Enlight Media throughout the year needs further observation.

Market value evaporated by 11.6 billion yuan in one month

Last year's "Nezha: The Devil Child Comes into the World" was a phenomenal animated film, with a box office of over 5 billion yuan, the highest in 2019, and accumulated excellent audience reputation for Enlight Media's animated films. Therefore, the release of "Jiang Ziya" was highly anticipated and even considered a lifeline for Enlight Media to support its high valuation.

With the halo of "Nezha: The Devil Child Comes into the World", "Jiang Ziya" grossed over 300 million yuan on its first day of release, breaking the box office record of "Nezha: The Devil Child Comes into the World" and becoming the highest-grossing movie during the entire National Day holiday. However, this box office champion lasted only three days, and the reputation of "Jiang Ziya" began to decline. Perhaps the expectations for its effect were too high, and after its release, it was found that it did not live up to expectations.

Douban Movies shows that the Douban score of "Jiang Ziya" has dropped to 6.9 points, while films released at the same time such as "My Hometown and Me", "Win the Championship", and "Home at One Point" all have Douban scores above 7 points.

After the reputation of "Jiang Ziya" declined, the share price of Enlight Media also suffered a "big dive". On September 30, the day before the film was released, Enlight Media opened at 15.81 yuan and closed at 16.66 yuan that day, with a total market value of 489 yuan. As of noon on October 28, the share price of Enlight Media was 12.7 yuan, with a total market value of 37.3 billion yuan. In less than a month, the market value evaporated by 11.6 billion yuan.

There are many factors that affect the company's stock price, and the poor reputation of "Jiang Ziya" may be just one of them. In fact, in recent years, the performance of Enlight Media has begun to decline. In 2018, Enlight Media achieved a net profit of 1.373 billion yuan. After deducting the investment income of 2.2 billion yuan from the sale of New Classics Media, the actual loss should be 285 million yuan. In 2019, excluding investment income, Enlight Media's net profit was 948 million yuan, a year-on-year decline of 31%, and this was still under the blessing of the bumper harvest of "Nezha".

For a listed company, doing a good job in its core business is the most important factor in supporting business development. However, "Nezha" and "Jiang Ziya" alone cannot save Light Media. It needs a continuous output of more popular content.

Light needs more explosive content

The decline in performance did not stop Enlight Media from running wild on the road of animation. The financial report shows that in the first three quarters of this year, Enlight Media's research and development expenses increased by 61.16% compared with the same period last year, and most of these funds were used in the company's animation production business.

At the end of the movie "Jiang Ziya", Enlight Media released an Easter egg, planning to release "Deep Sea" next, which is also called the third work of Enlight Media's Fengshen Universe by netizens. In addition, related productions of animated films such as "Big Fish and Begonia 2" and "Journey to the West: The Monkey King" are also in progress.

Huatai Securities pointed out in a research report that Light Media's leading position in the domestic animation field is becoming increasingly solid. Animation films themselves are entering a period of rapid growth, and they have advantages such as relatively low costs and large space for derivative product development, opening up growth space for the company.

However, compared with live-action movies, the production process of animated films is longer, and there is a risk of performance fluctuations due to production progress and quality not meeting expectations. The performance of "Jiang Ziya" is a good example.

It is worth mentioning that the release of many animated films may cause aesthetic fatigue among moviegoers, especially with the success of Nezha, and subsequent films are under great pressure. It remains to be seen whether the subsequent animated films of Guangguang can be a hit.