Zhongtai: DAMAI ENT(01060) IP revenue sees significant growth, rating recommended as "hold"

Zhongtai released a research report stating that based on the annual report, considering that DAMAI ENT (01060) overseas business and IP retail and self-operated businesses are still in the early investment period, the company is expected to achieve total revenue of 89.17/102.55/120.95 billion yuan for FY27-29 (compared to 92.34/117.28 billion yuan for the previous FY27-28), year-on-year growth of +11%/+15%/+18%; achieve net profit attributable to mothers of 8.76/10.23/12.09 billion yuan (compared to 15.14/19.65 billion yuan for the previous FY27-28), year-on-year growth of +24%/+17%/+18%. The company is a leader in the performance and IP transfer authorization field, and has been upgraded to a "hold" rating. Zhongtai's main points are as follows: Event: The company announced its FY26 performance. In the 26th fiscal year, the company achieved total revenue of 8.024 billion yuan, a year-on-year growth of +20%; net profit attributable to mothers was 705 million yuan, a year-on-year growth of +94%; adjusted operating profit was 738 million yuan, a year-on-year growth of +14%; adjusted EBITA was 746 million yuan, a year-on-year decrease of -8% (if excluding bad debt recovery of 160 million yuan in the same period last year, year-on-year growth of +15%). Revenue side: IP derivative business growth is impressive, while performance content and technology business remain stable (1) Performance content and technology: Revenue increased by 11% to 22.76 billion yuan. In 25 years, the scale of performance box office revenue increased by 6.39% to exceed 60 billion yuan, with a 6.58% increase in sessions to over 600 thousand, and a 4.22% increase in audience numbers to reach 194 million. DAMAI platform GMV has grown for three consecutive years, maintaining industry leadership, providing ticketing services with double-digit growth in sessions to 400 thousand, and a 50% increase in large-scale performance sessions to 5800. Hosted multiple large concerts and music festivals, and participated in content production and operations such as talk shows and immersive experiences. Formally launched the overseas top ticketing platform "Maiseat" (covering Singapore, Malaysia, Thailand, South Korea, etc.), promoting global tours by Chinese artists such as GAI and Zhao Lusi, gradually extending upstream to promote artist discovery, song production, artist management, and operations. (2) IP derivative: Revenue increased by 60% to 21.70 billion yuan. Licensing: Has signed top IPs such as Sanrio family, Gekko Kawaii, Pokemon, Universal Pictures, Crayon Shinchan, and cooperated with brand merchants such as Beast Party, L'Oreal Paris, CHOW TAI FOOK, MNSO, POP MART, Cardia, and Yadi. Retail: Successively held Gekko Kawaii flash events in six cities including Shanghai, Chengdu, Guangzhou, and Sanya; in September 25, the first offline official flagship store of Gekko Kawaii in mainland China was opened in Shanghai; in April 26, the second offline flagship store of Gekko Kawaii in China was opened in Hangzhou. (3) Film content and technology: Revenue decreased by 20% to 21.78 billion yuan. Taopiaopiao's market share is stable, and YINZHI maintains the first place in the number of tickets sold and admission tickets nationwide. The films "Shadow" and "Detective Chinatown 3" produced and promoted by the company respectively won the third place in the summer box office and the second place in the Spring Festival box office, with investment returns exceeding expectations. Performance side: Profit margin is under pressure due to the investment in new businesses The performance of the performance content and technology business segment decreased by 4% to 11.86 billion yuan, mainly due to the impact of investment in overseas business; the performance of the IP derivative business segment increased by 11% to 4 billion yuan, with a growth rate lower than the revenue growth rate, mainly due to the company's closure of some non-core sub-business lines, resulting in one-time losses, which dragged down the overall growth of the business segment. Looking ahead, driven by the dual wheels of going global and IP business (1) Performance business: domestically, accelerate the extension to the upstream content end of the industrial chain, create an innovative model of "variety + performance" linkage, incubate own project IPs, further expand offline entertainment commercialization scenes, and achieve diversified sources of income; overseas, start overseas business from Hong Kong and Macao, radiate to Asia and even globally, and layout overseas ticketing platforms, overseas high-quality content, and overseas top venues system; (2) IP business: continue to deepen the IP ecosystem, develop IP brand retail business, cooperate deeply with Tmall's trendy category, and actively explore the development of own IPs, as well as IP self-operated business. Risk warning: Risk of IP lifecycle continuity, global macroeconomic volatility risk, policy and compliance risk, deviation in calculations, and risk of outdated research report information.