Analysis of Rising Market Concentration in China's Film Market and the Possibility of Mergers and Acquisitions by Enlight Media

Based on the latest data and market trends, I will conduct an in-depth analysis of the

and its impact on the valuation of traditional film companies, with a focus on exploring the possibility of mergers and acquisitions (M&A) by Enlight Media in 2026.

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In 2025, China’s mainland film market achieved a total box office of

and , both growing by over 20% year-on-year [1][2]. Behind these seemingly booming figures lies a profound structural imbalance.

Indicator	Figure	Year-on-Year Change
Total Box Office	RMB 51.832 billion	+21.95%
Admissions	1.238 billion	+22.57%
New Films with Box Office Over RMB 100 Million	48 films	Decreased by 24 films (-33%)
Box Office Share of Films Grossing Over RMB 1 Billion	62.3%	Record High
Days with Single-Day Box Office Below the “Freeze Threshold” of RMB 20 Million	41 days	Abnormally High

The market presents an unprecedented pattern of

:

• “Ne Zha: The Demon Child’s Sea Adventure”
  topped the global box office history’s TOP 5 with a box office of
  RMB 15.446 billion
  , and its single-film box office even exceeded the total box office of the entire 2025 summer season (RMB 11.966 billion) [1][2]
• “Ne Zha 2” + “Zootopia 2”
  jointly contributed nearly RMB 20 billion, accounting for
  38.6%
  of the annual box office [2]
• Mid-tier film supply collapsed entirely: only 32 films grossed between RMB 100 million and RMB 500 million, a year-on-year decrease of 24 films [2]
• The number of new films with box office over RMB 100 million plummeted from 72 in 2024 to 48, a decrease of
  one-third
  [2]

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The differentiation of market structure has directly led to a

of film companies:

Indicator	Figure	Trend
Current Market Value	Approximately RMB 5.9 billion	Plunged 92% from RMB 80 billion
Consecutive Losses	7 Years	Cumulative Losses Exceed RMB 8.2 billion
Total Liabilities	Over RMB 2.2 billion	Overdue Debt of RMB 52.5 million
Cash Reserve	Only RMB 19 million	Extremely Tight
Founders’ Shareholding	Fully Frozen	Subject to Consumption Restrictions

The root cause of Huayi Brothers’ decline lies in the failure of its

strategy. Since its listing in 2009, the company has dispersed its resources into live-action entertainment, games and other fields, gradually weakening its core content capabilities which were the foundation of its success [3]. Among the top 10 films at the 2025 box office, Huayi only co-invested in one film “Litchi from Chang’an”, and the once “first stock of film and television” is striding toward its end.

Bona Film Group has accumulated losses of over

since its A-share listing in 2022. The 2025 Spring Festival film “Operation Jiaolong” only grossed RMB 274 million (less than RMB 400 million after re-release). The failure of this sequel to “Operation Red Sea” marks the near end of the business logic of mainstream-themed blockbusters [1]. The company faces a fragile model where “a failed blockbuster is fatal”.

Despite its relatively balanced business layout, due to the failure of “The Legend of the Condor Heroes: The Great Hero”, its net profit in the first three quarters plummeted by

, and it fell into a loss after deducting non-recurring gains and losses [2]. This confirms the cruel reality of “one loss leads to all losses” in the current market environment.

Valuation Suppression Factors	Specific Performance
Blockbuster Dependency Syndrome	Performance is highly tied to the success rate of top-tier films; the failure of a single film leads to quarterly losses
Fragile Cash Flow	Huayi has only RMB 19 million in cash, Bona’s losses exceed RMB 2.6 billion, resulting in extremely low risk resistance
Insufficient IP Reserves	Lacks mature IPs for sustainable operation, making it difficult to generate stable revenue
Schedule Dependency	The Spring Festival and summer seasons contribute over 60% of box office; non-peak seasons are almost “frozen”
High Cost Rigidity	High production costs remain stubbornly high; a box office failure leads to huge losses

Company	Market Value (in RMB 100 million)	Net Profit (First Three Quarters)	Cash Reserve	Valuation Characteristics
Enlight Media	548	+RMB 2.336 billion (+406.8%)	RMB 4.2 billion	High Growth, High Valuation
Wanda Film	244.8	Improved Profitability	Approximately RMB 2.5 billion	Initial Success in Theater Transformation
China Film Co., Ltd.	Approximately 18	-69%	Approximately RMB 3 billion	Valuation Under Pressure
Shanghai Film Group	Approximately 10	+29.81%	Approximately RMB 1.5 billion	Driven by Animated IPs
Huayi Brothers	59	Sustained Losses	RMB 19 million	Valuation Collapse
Bona Film Group	Approximately 8	Losses Over RMB 2.6 billion	Tight	Sliding to the Edge

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Enlight Media is the only

in the current film industry:

Indicator	Data	Industry Status
Market Value (in RMB 100 million)	548	Ranked First in the Film Industry
Cash Reserve (Q3, in RMB 100 million)	42	Ranked First in the Film Industry
Net Profit (First Three Quarters, in RMB 100 million)	23.36 (+406.8%)	Leading by a Wide Margin
P/E	24.74x	Reasonable Valuation
ROE	21.31%	High-Quality Asset
Net Profit Margin	57.63%	Extremely High Profitability
Current Ratio	4.23	Extremely Abundant

The huge success of

has not only brought direct revenue but also verified the feasibility of Enlight Media’s strategy. Wang Changtian’s 30-50 year plan is accelerating [1].

Enlight Media is not a conservative

, but a :

• 2016
  : Acquired
  Maoyan Movies
  through a “cash + stock” combination, gaining access to online ticketing channels
• 2016-2025
  : Made sweeping investments in dozens of
  animated film production companies
  to build a content moat
• 2025
  : The full-industry-chain layout of animated IPs has entered the harvest period

These two historic M&A deals helped Enlight Media obtain the

and respectively [1].

Driving Factor	Analysis
Adequate Cash Reserves	With a cash reserve of RMB 4.2 billion and meager interest income, there is a need to improve capital efficiency
Strategic Demand	The “Chinese Mythology Universe” requires more IPs and production capacity support
Industry Downturn	The valuation collapse of traditional film companies provides opportunities to acquire high-quality assets at low prices
Competitive Pressure	Need to consolidate the moat in the animation field to prevent competitors from catching up

1. Animated IP Industry Chain Companies
   : Any move that helps with the full-industry-chain application of animated IPs is a possible direction, including:
   • Animation technology companies (rendering, motion capture, etc.)
   • Derivative product development companies
   • ACG (Anime, Comic, Game) platforms or communities

2. Mature IP Operation Platforms
   : Acquire proven IP assets to reduce content development risks

3. Overseas Animation Companies
   : Leverage the international influence of “Ne Zha 2” to expand into the global market

4. Traditional Film Industry Assets
   : Acquire theater chains or production capabilities during the valuation trough [1]

• Structural contradiction of redundant entry-level positions and insufficient supply of high-end talent in the animation industry [4]
• Shortage of industrial blockbusters in 2026; industry confidence still needs to be restored
• Need to guard against goodwill risks brought by high-premium acquisitions

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Key Question	Analysis
Will There Be Blockbusters Grossing Over RMB 10 Billion?	The success of “Ne Zha 2” is difficult to replicate; it will require 3 films grossing over RMB 5 billion or 1 film grossing over RMB 10 billion
Can Mid-Tier Films Recover?	The failure of blockbusters such as “The Legend of the Condor Heroes: The Great Hero” and “Operation Jiaolong” has hit confidence in industrial blockbusters
Contribution from Hollywood Blockbusters?	2026 is a big year for Hollywood; whether films like “Avatar 3” can exceed RMB 3 billion is a key variable
Schedule Balance?	Can there be more effective schedules beyond the Spring Festival and summer seasons?

1. The Era of IP Operation Has Arrived
   : In 2025, IP-based films accounted for 7 of the top 10 box office films, contributing RMB 27.54 billion [2]
2. “Guzi Economy” (Derivative Economy) Takes Shape
   : Derivative revenue has become an important growth driver; the first-day sales of merchandise for “Little Monsters of Langlang Mountain” exceeded RMB 7 million [1]
3. Theater Transformation Accelerates
   : Wanda Film’s IP derivative sales increased by 94% year-on-year; Hengdian opened a “Toy Dream Factory” collection store [2]
4. AI Animation Exploration
   : China Literature, iQiyi, Youku and others are deploying AI comic dramas, which may reshape content production efficiency [5]

• Top-tier companies
  with mature IPs and cash flow will receive valuation premiums
• Traditional film companies
  lacking core competitiveness will continue to face pressure, and may even face the risk of being acquired or delisted
• M&A and integration
  may become the main theme of the industry in 2026

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1. Top-Tier Concentration Has Reached a Critical Point
   : Films grossing over RMB 1 billion account for 62.3% of total box office, and the “90/10 effect” in the industry is significant
2. Traditional Film Companies Face Valuation Pressure
   : Companies such as Huayi and Bona face fundamental challenges to their business models, with significant market value shrinkage
3. High Probability of M&A by Enlight Media
   : With RMB 4.2 billion in cash, strategic demand, and an industry downturn, it is expected to launch strategic M&A in 2026
4. IP Operation Has Become the Core Competitiveness
   : The only way forward is to transform from a “content provider” to an “IP operator”

Risk Type	Specific Content
Single-Film Dependency Risk	Over-reliance on the Ne Zha IP; the failure of sequels will impact performance
Industry Cycle Risk	High box office volatility, lack of a stable foundation for cash flow forecasting
M&A Integration Risk	Goodwill impairment from historical M&A; high difficulty in integrating cultural assets
Policy and Regulatory Risk	Uncertainties from policy changes such as content censorship and ticket price regulation

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[1] Huxiu - “Ten Questions About 2026 Chinese Films” (https://m.huxiu.com/article/4826481.html)

[2] Sina Finance - “Annual Box Office Reaches RMB 51.8 Billion: Is Chinese Film a Bubble or Real Gold?” (https://finance.sina.com.cn/tech/roll/2026-01-05/doc-inhfffrs9594892.shtml)

[3] Wenxuecity - “In Debt of RMB 2.2 Billion, the Domestic Entertainment Giant Has No Solutions: Huayi Brothers is Moving Toward Its End” (https://www.wenxuecity.com/news/2026/01/04/126474127.html)

[4] 36Kr - “Enlight Media: Still Living Under the Halo of Ne Zha?” (https://eu.36kr.com/zh/p/3545183355334535)

[5] Sina Finance - “China Literature + iQiyi + Youku + Suoyi Culture + Xuanji Technology Discuss the Future of Comic Dramas and AI Animation” (https://finance.sina.com.cn/roll/2026-01-13/doc-inhheqfr4718923.shtml)

[6] 36Kr - “Review of 2025: The Two Extremes Behind the RMB 50 Billion Film Market” (https://m.36kr.com/p/3624933405263108)

[7] Yiyu Observation - “Ten Questions About 2026 Chinese Films: Can the RMB 50 Billion Box Office Be Achieved? Will There Be Films Grossing Over RMB 10 Billion?” (https://m.huxiu.com/article/4826481.html)