Wanda Film Holding, China’s leading cinema chain operator, held its 2021 online performance meeting on Wednesday, introducing details on its operations last year and on future plans amid the continuing pandemic.
At the performance meeting, Zeng Maojun, Chairman and President of Wanda Film, said that the company plans to build between 30 and 50 new cinemas in 2022. However, the company is now encountering delays that may force it to adjust plans in response to the COVID-19 situation, he added.
Zeng also mentioned that Wanda Film’s strategy of integrating offline cinema, content, and online platforms is very suitable for creating digital products related to the metaverse and NFTs, and the company has already been carrying out corresponding research.
Huang Shuo, Vice President and CFO of Wanda Film, replied to public concerns about the firm’s cash flow, saying, “Under normal circumstances, the company can generate about 2 billion yuan of operating cash flow every year. As of March 31, 2022, the company’s monetary fund balance was 4.46 billion yuan ($664 million), which could guarantee the company’s normal business activities and support the long-term strategic direction.”
Wanda Film’s 2021 annual report shows that its revenue last year was 12.49 billion yuan, a year-on-year increase of 98.4%, while the net profit attributable to shareholders was 106 million yuan, compared with the 6.668 billion yuan loss in 2020. The box office market share of Wanda Film was 15.3% and 16% in 2021 and the first quarter this year.
In this regard, Wang Huiwu, Director and Vice President of Wanda Film, said that the company’s box office market share and core competitiveness have been significantly improved. However, the impact of the COVID-19 pandemic on the operations of the industry continues. Since 2021, the company has reduced its number of cinemas to pay more attention to the development of high-quality facilities, as well as adapting the model of light asset development to expand the company’s competitiveness.
Regarding how to deal with the impact of strict pandemic control measures in China while maintaining profitability, Zeng Maojun noted two factors: cost reductions and shoring up efficiency.
In terms of cost reductions, Wanda Films has taken measures including closing some inefficient studios and strengthening film cost control, covering many links from project establishment and script review to production and distribution.
In terms of efficiency improvement, the proportion of non-box office revenue of the company increased from 13.5% before the initial outbreak of the pandemic to 15.5% afterwards. The company also carried out innovative projects such as live entertainment, role-playing murder mystery activity (剧本杀), cross talk, Shakespeare plays, and more. Besides, the company launched its own tea brand and cooperated with Costa Coffee to provide additional non-box office income.
Chen Hongtao, Director and CEO of Wanda Film, also mentioned at the performance meeting that in the future, the company will cooperate with dating websites to further serve moviegoers.