Institution: AI technology drives the shift of film content supply.

According to the data from the Lighthouse Professional Edition, as of March 1, the box office of the 2026 film exceeded 10 billion yuan. Guosen Securities believes that the demand for entertainment is still strong, and AI technology is driving the transformation of film content supply. 1) Looking back at the box office performance in 2025, quality content such as "Nezha" and "Zootopia 2" both performed well; 2) In the short term, from the perspective of film scheduling, there is a lack of top IP films and blockbuster films in the 2026 film lineup, putting pressure on the supply side in the short term. Companies in the film and television cinema sector have a high operating leverage, and a decline in revenue will have a significant impact on profit margins; 3) In the medium to long term, breakthroughs in AI video technology at home and abroad, AI video models have become industrial tools, solving problems such as physical logical violations, audio-visual asynchrony, and lack of directorial control in film and television production. It has greatly reduced the cost of video production and shortened the production cycle, which is expected to drive the improvement of supply in AI animated shorts, short videos, TV dramas, and movies. Zhongtai Securities believes that 1) the film market will recover and grow, single screen revenue will hit bottom and rebound, and the market structure will expand in dimensions such as users, scenarios, and value chains. Single screen revenue has been fluctuating and declining since 2012, hitting bottom during the pandemic and starting to recover. In addition, the average age of moviegoers continues to rise, with audiences over 30 years old exceeding 50% for the first time in 2024, enhancing the overall consumer spending power; box office revenue in third-tier cities and below has exceeded 40%, expanding revenue opportunities; non-ticket economy of theaters has been unprecedentedly valued, with the development of IP downstream extending horizontally, and the commercial realization path of films continuously expanding. 2) The film market has entered a new stage of "quality over quantity", clearing out low-quality content, and high-quality supply becoming the core driver of box office revenue.