FAST NEWS: Maoyan Makes Further $21 Million Impairment Provision for Uncollected Receivables

The latest: Chinese online movie ticket seller Maoyan Entertainment (1896.HK) announced Tuesday it is making a further impairment provision of 139.9 yuan million ($21 million) following a revaluation of receivables, with deposits and receivables for online entertainment ticketing, e-commerce and other services accounting for 89.3 million yuan of the total.

Looking up: Maoyan indicated that as of the date of the announcement, the operating rate of cinemas in China has recovered to over 80% and the film market continues to rebound. The group also has a number of films released or soon to be released.

Take Note: Due to the recurrence of the Covid-19 virus outbreak last year, which delayed the recovery of the entertainment industry in China, the company was unable to collect some of its receivables, as its business partners were adversely affected.

Digging Deeper: The film industry was affected by the closure of entertainment venues in many Chinese cities since the outbreak of the Covid-19 virus in 2020, but the epidemic stabilized somewhat last year, and many film-related companies saw their bottom line rebound. Maoyan, for example, saw its revenue jump 143% year-on-year to 3.32 billion yuan last year, and turned a loss into a profit of 369 million yuan. However, due to the slow growth of its core ticketing business, the company revealed that it will shift its focus to promoting its content-development business, such as participating in the production, distribution and promotion of movies.

Market Reaction: Maoyan’s share price was slightly shaken on Wednesday, closing down about 1% to HK$7.19 at the midday break. It now trades at the lower end of its 52-week range.

Translation by Jony Ho

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