Zhejiang Huace Film & TV (300133.SZ): Model Update; Lower TP to RMB8.70

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Zhejiang Huace Film & TV (300133.SZ): Model Update; Lower TP to RMB8.70

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02 Jul 2026 06:10:20 ET │ 13 pages

Zhejiang Huace Film & TV

(300133.SZ)

Model Update; Lower TP to RMB8.70

CITI'S TAKE

In this note, we update the model of Huace based on 1Q26 release and 2025 Buy

annual report. In 2025, while revenue came in better-than-expected, Price (02 Jul 26 15:00) Rmb7.330

Huace’s core profit declined by 88% yoy to RMB21.1mn, primarily due to

Target price Rmb8.700↓lower margin of dramas, and the loss making of movie productions due to

challenging movie market and softer than expected movie performance. On from Rmb9.000

the positive side, Huace disclosed the computing business reached Expected share price return 18.7%RMB126mn (+603% yoy) with 36% GpM, and it further grew rapidly in 1Q26,

which could become the new growth driver. In our view, drama production Expected dividend yield 0.2%

and movie production business remain uncertain due to challenging macros Expected total return 18.8%and weak industry sentiment, while it takes time for the computing

business to further ramp up to be major growth driver. We lower profit and Market Cap Rmb13,732M

TP to RMB8.70 (from RMB9.00), based on 25x (unchanged) roll-over 2027 US$2,029M

EPS. Maintain Buy.

2025 rev beat while profit missed — FY25 revenue +46% yoy to RMB2.83bn, while

attributable NP -21% yoy to RMB191.1mn, and ex-one-off attributable net profit fell

88% yoy to RMB21.1mn. The profit decline was driven by weaker core profitability Price Performance

despite strong revenue growth, dragged by higher production/film sales costs and (RIC: 300133.SZ, BB: 300133 CH)

asset/goodwill impairment pressure. In FY25, operating CF was RMB322.0mn,

turning positive from -RMB297.0mn in FY24, mainly due to stronger collections