FAST NEWS: Alibaba Pictures’ First-Half Loss Narrows Sharply

The latest: Filmed entertainment maker Alibaba Pictures Group Ltd. (1060.HK) last Friday estimated its net loss for the first half of its fiscal year through September narrowed at least 43.6% to up to 30 million yuan ($4.2 million), compared with a loss of 53.23 million yuan in the same period last year.

Looking up: The company said the improved performance was primarily attributable to improvements in the quality and quantity of its films and drama series, and lower equity investment losses.

Take Note: While Alibaba Pictures recorded a loss of 53.23 million yuan loss in the first half of its previous fiscal year, it recorded a profit of 169 million yuan for the entire fiscal year through March this year, implying a sharp improvement in the second half of its last fiscal year. But the company did not give any forecast for the second half of the fiscal year in its latest announcement.

Digging Deeper: Formerly known as ChinaVision Media Group Ltd., Alibaba Pictures was founded in 2009 and listed through a reverse takeover the same year, before being acquired by Alibaba Group (BABA.US; 9988.HK) in 2014. The company lost money for many years after its inception, but has recently benefited from strong demand for cultural entertainment during the Covid-19 pandemic. It participated in the production and distribution of 44 films in its last fiscal year, focusing on films featuring mainstream themes and “positive values” in line with national policies. Resulting films such as the nationalistic “Battle at Lake Changjin” and “My Country, My Parents” generated over 26 billion yuan in ticket sales during the period, accounting for 71% of the box office for domestic films, helping the company to record its first-ever profit for the year.

Market Reaction: Alibaba Pictures shares sank on Monday, closing 3.1% lower to HK$0.31 at the midday break. The stock currently trades near the low end of its 52-week range.

Translation by Jony Ho

To subscribe to Bamboo Works free weekly newsletter, click here